Microsoft has entered the RPA market — what does that mean?

Microsoft officially entered the robotic process automation (RPA) marketplace this week with some major changes to its Power Platform. It’s not the first incumbent enterprise software vendors to feel the need to have a product in this category (SAP purchased French RPA vendor Contextor late last year), and it won’t be the last. We should expect to see a steady increase in RPA investment in from big enterprise vendors, with a mix of internally developed and acquired technologies. Watch this space for announcements over the next year from Salesforce, ServiceNow, and even perhaps Oracle, IBM, and others.

The fundamental challenge driving these investments is that RPA is the first step in a journey to reinvent how companies build the software they use to run their businesses (see my recent article on how UIPath is reinventing the RPA category). RPA lets companies record a series of computer-based processes done by a human so that the series can then be repeated automatically without human involvement. When companies change the way they use technology, incumbent enterprise software providers are often threatened. We’ve seen multiple waves of platform change over the past 25 years — web browsers, cloud computing, mobile. But this RPA wave may be even bigger than prior ones in that it changes the way we organize and manage work itself — introducing a hybrid workforce of people, rules-based automations, and increasingly smart algorithms (AI/machine learning).

Not yet fully baked

The old adage about Microsoft is that it always takes them until version three of a product to deliver something usable. It took Microsoft three tries to make Windows successful. And when the first real challenge to Windows appeared in the form of web browsers as a new model for application development, it again took Microsoft three tries to get Internet Explorer to a place where it really added value to the still emerging “dot com” market. Before that, Microsoft offered a rehash of technology licensed from Spyglass (remember Mosaic?).

The company’s announcement this week of Power Automate seems to come out of the same playbook — an early partial attempt to address a new market that will take time and investment to mature into a useful technology that really contributes something to the RPA category. Microsoft has taken its existing Flow product (similar to the popular and free web based service IFTTT) and added the open source tool Selenium (originally developed for automating web application testing) and a desktop macro recorder — and called the bundle RPA. As with early versions of Internet Explorer it can do some of what more mature products can do, but it lacks enterprise management and security features that have now become standard in products provided by UIPath, Automation Anywhere, Blue Prism, and others.

Enterprises implementing RPA now expect sophisticated identity management so that source system usernames and passwords can be securely managed outside of an individual automation script. They also expect to be able to manage work queues across the organization so that automation actions can be planned and executed when and where needed. And they need development life cycle controls to make sure the right version of an automation is being used in production and has been fully tested from both a technology and a business process perspective.

While Microsoft works to catch up on these features, the leading vendors are hard at work on the next dozen features as well.

The impact of Microsoft’s entry

So what is the value to Microsoft in introducing a very early product that really isn’t competitive technically? You do have to start somewhere. And Microsoft will benefit from engaging with the market and learning more about what customers require in this category. The fact that Microsoft is essentially offering “free” RPA also allows it to disrupt the competition a bit, creating fear, uncertainty, and doubt (FUD) among enterprises currently considering large investments in more mature products, slowing sales cycles and shrinking deal sizes.

An alternative view is that Microsoft’s entry into the market serves as an endorsement of RPA’s importance and may cause organizations to more closely examine their adoption strategy for this critical new capability. For those companies that don’t get sidetracked by marketing materials, there is an opportunity to enjoy substantial business benefits by more quickly developing robust RPA programs adopting other industry leading products while Microsoft slowly moves toward magical version 3.

Of course, in the web browser wars, while Microsoft managed to kill off fledgling Netscape, it never did produce a leading web browser. Today Google’s Chrome dominates global markets, and Microsoft’s IE owns mostly market trailing user segments. And in mobile, Microsoft never mounted a successful competitor to iOS and Android. (In the cloud wars, it’s still too early to say how Microsoft’s Azure will fair against Amazon’s AWS and Google Cloud.)

Returning to the Internet example for a moment, if I had asked you in 1997 which search engine you would be using in 20 years, you might have said Excite or Lycos or Yahoo, but you wouldn’t have said Google. The company wasn’t even founded until 1998. Similarly we are at the early days of automation, analytics, and AI, and the company that wins may not even exist today. But welcome to the RPA fray, Microsoft! And good luck.

[Ted Shelton is a VB Transform Workshop speaker and facilitator, helping organizations raise their awareness and understanding of automation, analytics, and AI and how these technologies can transform business processes across the enterprise. Ted is also the founder and CEO of Robodomo and has been working in the field of automation and AI for almost a decade. Previously, he was Chief Customer Officer for automation software vendor Catalytic Inc. For a decade prior, he worked as a consultant in digital advisory practices at PwC, Cognizant, and Genpact. He started his career as a software developer and executive in Silicon Valley enterprise software companies.

For more information about how your or your organization can benefit from a VB Transform Workshop please contact us at events@venturebeat.com]