And ladies and gentlemen, the studio is set, the mics are hot, it's time for UiPath Live with the RPA market update and open mic with Daniel Dines introducing our hosts, Mary Tetlow and Diego Lomanto.
Mary Tetlow:
Hello, hello! Welcome. Welcome to UiPath Live. I'm Mary Tetlow. I head up global brand experience here at UiPath.
Diego Lomanto:
And I'm Diego Lomanto. I head up product marketing here at UiPath.
Mary Tetlow:
And this is UiPath Live. What is UiPath Live?
Diego Lamanto:
What is UiPath Live, Mary?
Mary Tetlow:
UiPath Live is a live web broadcast that we've created here in our New York headquarters to be able to bring live broadcasts to discuss all things automation, RPA, and UiPath. And today we're talking about--we're doing an RPA market update, and we'll have an open mic session with our CEO, Daniel Dines.
Diego Lomanto:
Now Mary, we have a pretty packed agenda today. We have a lot of stuff going on. Do you want to walk us through what's happening?
Mary Tetlow:
Well, I'll start with--we start off with our CFO, Ashim Gupta, who does a market update.
Diego Lomanto:
Yes, and then we're going to bring in Saikat Ray, an analyst at Gartner, to talk about the hyperautomation space. Our Chief Product Officer, Param Kahlon, is going to walk through our innovation in hyperautomation, the platform we're bringing to market.
Mary Tetlow:
That's right. And then we will be joined by Tom Clancy, our Chief Learning Officer, live from the campus of George Mason University.
Diego Lomanto:
And then the main event.
Mary Tetlow:
The main event, finally, the main event--unfiltered Daniel Dines to answer your questions. So please put questions in the chat box, in the "Ask a Question" box, and we're collecting them for Daniel to answer.
Diego Lomanto:
Yes, we expect a lot of questions. There's thousands of you already out there, so thank you. We're honored that you are going to spend the next hour with us, so do send in your questions there. So Mary, why do we think so many people have shown up for this?
Mary Tetlow:
I don't know, not for the free shrimp--
Diego Lomanto:
It's not for us.
Mary Tetlow:
But they're here because RPA is on fire, and people want to know why.
Diego Lomanto:
Yes, it's the fastest-growing market category in enterprise software. It's really changing the game inside the enterprise and how people work, and so we're going to lay the foundation first with Ashim Gupta, who is our CFO. He's going to walk you through and give you context for just exactly how big this market is getting, how we're growing, and really lay the groundwork for the rest of today with some numbers and some insights. So why don't we bring Ashim in? Ashim?
Ashim Gupta:
Thank you, and thanks for everybody to spend their time here with us today. As Diego mentioned, I am the CFO for UiPath, and between the numbers in the market, I sit squarely in front of the action that surrounds the RPA industry. Today I want to share with you my thoughts around the RPA industry both in terms of the growth, the trends, and then also talk about the dynamics for our company and the market at large.
A lot of the trends that we're seeing around the market are the same trends that made me leave a big corporation and come to UiPath. For me, that big corporation was GE, where I was the CIO for finance and shared services, and I led automation across those groups. Prior to that, I was the CFO for GE Water, and both of those experiences really shaped my love for automation as well as digitization. As a customer of UiPath and a user of the platform, I saw first-hand how powerful it was, how many benefits it gave both people as well as enterprises. So in early 2018 when Daniel and UiPath approached me to be their Chief Customer Success Officer, it was an opportunity I couldn't pass up.
Last year around the fall time, Daniel asked me to be the CFO for UiPath to really help to build a solid financial foundation to support its growth. My new perspective as UiPath CFO, it further solidified my belief, both in terms of the industry as well as UiPath, in our ability to lead and build this space onward and upward from where it is today. More than ever, I see this not about delivering a few quarters of numbers. We are a part of something bigger, something more dynamic, and something more fundamentally value-creating than anything we've seen before.
Which brings me to what I'd like to talk about today. And I really want to break it down in terms of the state of the industry, but related to UiPath. So first and most important is people. We see a lot of people coming into the space, and from a people perspective, we lead in attracting the best talent. From a technology perspective, we hold the top position. If you look at Forrester's Wave and Gartner's Magic Quadrant, we are in clearly the number-one leader position there. And equally important to all of that, we hold the top scores in independent review boards. From a growth perspective, both RPA and UiPath are on incredible trajectories. Gartner estimates that we're number one in market share. We are ranked number one from Deloitte in their 2019 Technology Fast 500. And we were listed as number three in the Forbes Cloud 100 for 2019.
Let me give you some information specifically on the growth. First, the RPA market continues to rapidly accelerate. Last year, Gartner named RPA the fastest-growing market segment in the software space. Fourth quarter, we witnessed firsthand that acceleration and the incredible growth. And I'd like to share with you some of the numbers from our quarter.
So first, we talk about growth in terms of ARR, Annual Recurring Revenue, which is a key metric of any subscription software or SaaS company. This past quarter, we added net new $60 million of ARR, which brings our entire ARR to $360 million. To put that in perspective, in just one quarter we grew our recurring revenue base by over 17%. Just to further emphasize the speed of growth and acceleration for UiPath, if you rewind 36 months ago, that ARR balance was just a little over $3 million.
What's driving this growth? In the past, we've seen customers playing in what we would call Sandbox RPA, or experimental. And now we see customers moving from Sandbox RPA to strategic RPA. When I was with GE, I saw some of this. We started with a few experiments. We wanted to really test the technology and test the use cases. And then as we got confident in it, we scaled, and we scaled fast. When we had those tests, it gives confidence to the organization, and growth seems to accelerate at a pace that's unimaginable. In my sense, what I experienced at GE, that's what we see across the industry and what CIOs, COOs, and CEOs and CFOs are experiencing in their businesses as well.
As initiatives get more strategic, deal size and velocity starts increasing. For example, in 2019 we signed 3x more million-dollar-plus deals versus 2018, and over one-third of those deals closed in the fourth quarter, propelling us to a first quarter with over $200 million in signed contracts. We're adding 13 new enterprise customers per day. Our renewal rates are the best in class of any SaaS business. And as customers are not just renewing, they're adding robots as they expand their automation program. A key metric, our dollar-based net retention rate, currently stands at 170% for a cohort, or a group of customers, just one year after starting with UiPath.
2019, just from the numbers, was a successful year in terms of customers scaling. These stories span all geographies and industries --financial services, healthcare, insurance, telecom, energy, retailing, manufacturing and more. We now have 40-plus customers above $1 million of ARR and several that have invested well above $10 million in scaled solutions. We are adding great new customers every single year--customers like Amazon, Cleveland Clinic, CrowdStrike, Cushman and Wakefield, Tata Steel, and the United States Department of Agriculture.
While the numbers are showing this massive scale, we still recognize that scaling is the largest challenge for many of our customers. In our own Voice of the Customer surveys and feedback channels, getting help with planning, governance, and program execution and management is absolutely the top request. We know it's critical to get this right and to help customers achieve their full potential from automation. Guided by what our customers, our users, our partners tell us through our various Voice of the Customer channels, including our new insider preview program and portal, we've been working hard to expand our automation platform end to end. We're aligning it with a broader proposition we call hyperautomation, ensuring it offers a powerful industry-leading time-to-value benefit and the ability to combine process mining, AI, and API integration with RPA. Param is going to talk about this in a little bit, so I won't steal his thunder just now, but it's incredible.
We're on a solid path to becoming cash flow positive, and this is very important to us, as it gives us the ability to make the necessary investments in our platform that the market is demanding. Advancing both organic and inorganic growth is critical. Investing in organic growth, especially around AI, and inorganic growth around process mining such as our acquisition of Process Gold (now named UiPath Process Mining) and Stepshot (now named UiPath Task Capture) are a few of the examples of how we're using our investment to advance in these areas.
You will see us continue to use our market position and cash flow to invest in our platform and services and expand our leadership position in the RPA industry and the overall hyperautomation proposition. For one thing, we'll expand investments in our partners worldwide, something we've heard is critical and important to you and to the industry at large. Next quarter we'll unveil a program focused on implementation and delivery service quality. This will be a certified network of partners that will be measured and rewarded real time. We will no longer tier partners simply by the amount of UiPath business. We're also launching UiPath Partner Academy to give all our partners essentially the same level of training that we provide internally.
Speaking of training, we offer RPA training and certification through our free online UiPath Academy, an investment in the next generation of RPA warriors and citizen developers that we're proud to make. As we look forward to 2020 and beyond, we're going to do a lot to invest in the things that are important to everybody here, to get to the outcomes that you expect. I'm here for you. You can reach me at [email protected] at any time and for any reason.
And with that, I will send it back to Diego and Mary at the UiPath Live studio. Thanks.
Diego Lomanto:
All right, thank you, Ashim.
Marty Tetlow:
Thanks, Ashim.
Diego Lomanto:
Really great. If you're a business nerd like me, if the terms "ARR" and "dollar net retention rate" are interesting to you, which they are to me, that's an amazing amount of radical transparency that you don't typically see from, really, any private type of company. So thank you, Ashim, for sharing all that with us.
Mary Tetlow:
And we've been--we now know why we've been so tired after 2019.
Diego Lomanto:
Yes, that's a lot, a lot of work to see that growth. So why don't we move now from us to what's happening in the market? Mary, what's next?
Mary Tetlow:
Fantastic. Well, that's a great segue to our guest, who is joining us here live in the studio. We are really thrilled and honored to be visited by Saikat Ray, who is a Senior Director Analyst from Gartner Research. Welcome, Saikat. Thanks for being here.
Saikat Ray:
Thank you so much. Thanks, Mary. Thanks, Diego.
Diego Lomanto:
Thank you so much for being here.
Mary Tetlow:
So, we'd like to just get started with a little bit of background. You recently—or you joined Gartner, previously having been a practitioner of RPA. What was it about your previous experience that led you to this concept of hyperautomation?
Saikat Ray:
That's an interesting question. First of all, what I would like to say is it would be absolutely unfair for me to claim any credit for hyperautomation. There are so many great analysts in Gartner who actually have worked on this. And so last year we introduced this topic of hyperautomation.
But to your point, based on my prior experience, especially implementing RPA, what I learned is that RPA can be great if you apply it for your tactical needs. Essentially, this is for automating your routine, repetitive, mundane processes, unlock some quick business benefits. But what about those non-routine processes? What about end-to-end process automation? What about going beyond the tasks or that broader level? What about APIs or integration? What about process discovery analytics? So, there is a broader field, and I think that's a great segue to hyperautomation.
Diego Lomanto:
Digging into hyperautomation a little bit more deeply, it was identified as the number-one strategic trend in the enterprise by Gartner for 2020. Can you just dig a little deeper and define what hyperautomation is and why it's become so important?
Saikat Ray:
Yes, that's actually a great question, and I'm quite excited to explain that because I'm very passionate about that topic.
So, if you remember that even prior to hyperautomation that we had a lot of things that's floating around in the market. And one of the most popular terms, probably, is intelligent process automation.
Diego Lomanto:
Yes.
Saikat Ray:
So the point here is that--and if you look beyond that surface, that what is called as intelligent process automation is, essentially, a re-branding of RPA or robotic process automation with the flavor of AI, machine learning.. So, it's kind of having some layers of AI augmentations along with this routine and repetitive task automation. But when you look at hyperautomation, first of all, the question is why it's hyper? And it's an interesting area. As I said earlier it's much broader than routine and repetitive tasks. It's about how do you automate your tasks, but it's also about how do you orchestrate your end-to-end process chain? How do you actually gain more intelligence about your individual elements of process, which is by the means of process discovery, mining and so on and so forth.
Diego Lomanto:
Right.
Saikat Ray:
But it's also about how do you perform integration? Because RPA is not the end of the world. You have so many different means to integrate, so APIs, connectors, and other things. And how can you effectively orchestrate all these components together? So essentially, we're looking at an end state for our customers where you could have an end-to-end, intelligent, event-driven automation which also requires orchestration. And I think when you combine that entire opportunity there, it's much broader.
Diego Lomanto:
Yes, right.
Saikat Ray:
So it's broader in scale, it's broader in scope, but also at the same time, the challenges. You cannot wait for years. You cannot wait for all these planning and everything to be done. You need to do it faster. So there is this element of agility that's absolutely important. So what I would say, it's a combination of--and again, one other important point that I would like to make is it's not one single technology. It's a combination of several technologies and tools
Diego Lomanto:
Yes, and to just to pick up on that just for a second here, I think people have been conflating RPA and AI together for a while now, right, when you talked about intelligent automation, but hyperautomation goes beyond RPA and AI. You're talking about the broader set of complementary and adjacent technologies that make this all happen, and it's important to distinguish that, right?
Saikat Ray:
Absolutely. To summarize, what I would say is it's actually a combination of technology. As you said, it's beyond RPA, it's beyond AI. It's so many different things. But more importantly, orchestration of these technologies in an effective manner to drive, I would say, efficiency, efficacy, and business agility.
Diego Lomanto:
And I think that was what takes you to digital transformation as well, right? And one of the reasons why I like the term "hyper" is because it implies you're going to get fast value. It's easier to get started. But what's amazing about it is that you have that layer of simplicity to get started, the hyper. But then on top of that, it enables a digital transformation in the enterprise.
Saikat Ray:
Sure, yes.
Diego Lomanto:
Awesome. Next question is then if that's the case, the broader set of technologies that are all aligning. How do you see RPA in the mix? How do you see RPA correlating hyperautomation? Where does it play?
Saikat Ray:
The reason I'm smiling because I knew it was coming.
Diego Lomanto:
It's always the next question, right?
Saikat Ray:
As I said, if you look into RPA, RPA is quite tactical in unlocking the business benefits. It helps you to automate your routine, repetitive tasks which, by the way, is fairly important for your business. For businesses who are waiting for months to unlock these benefits, RPA could be a quick and easy way for them to do this where they do not have other feasible alternatives? Now, I know I in the past have talked about the technical debt that RPA gets, but also let's talk about that.
What is the technical debt? Is it overrated? Is it something that you--anyway, you would have to take some form of debt. Let's talk about the Smart Debt. And essentially these markets is you're recognizing that you will be carrying on some debts, but in a controlled manner, and you will be building on your tactical gains. So, in other words, RPA could be a stepping stone, it could be your starting point, but build on your wins and look into your broader objectives. And the broader objective could be that all those things that we talked about in your end-to-end process--orchestration, your integration area, and everything--and you could build that in bits and pieces. It doesn't necessarily need to be in a sequence. It could be iterative, but it's a long journey.
Diego Lomanto:
And I think the debts that you're talking about become marginal compared to the benefit that accrues on top of it for the digital transformation that can build on top of it. Yes, some debts accrue, but they're not significant in the long run when it comes to the transformation.
Saikat Ray:
Yes, and since you asked me this question, just one point that I would like to make very quickly is that many vendors--and we see this very interesting because this was from the customer's perspective, what I was telling you. But from a vendor's perspective, we see there is a convergence of these technologies coming together. So, you might, who knows, in future get all these things in one single platform.
Diego Lomanto:
Yet, which is what we're intending for it.
Mary Tetlow:
We'll learn about that. What are the typical challenges that customers who are adopting hyperautomation face?
Saikat Ray:
If I go on about challenges, it will be a long story. But I would say in short that there are two things that's very important. One is governance, which is absolutely important for scaling your automation. I think that's going to be the number-one challenge. No two organizations are similar, so it's not a one-size-fits-all model. There are several aspects: culture, compliance, security, agility--all these things--maturity. So, governance would be important. The other thing is that enterprise architectural planning or the strategy, that you need to orchestrate all these different technologies, and how you create your long-term investment plan is going to be a long journey.
Diego Lomanto:
Yes, so those are the typical challenges that, as you get into it, you need to be aware of. Okay, last question for you. We want to get your prediction. Will RPA continue to grow and accelerate at the pace that it's growing? Will it continue to be the fastest-growing enterprise software category for the second year in a row at Gartner, do you think?
Saikat Ray:
So, it's a question that I cannot answer with the numbers because we haven't published the research yet. But I would say definitely wait for our market research, which should be coming very soon on the market share data for RPA.
Diego Lomanto:
Go to Gartner.com
Saikat Ray:
But if you looked into our predict note that we published, I think last year, predictions for 2020, our (inaudible), and that's where we pretty much kind of alluded to the fact that RPA, by its nature, is changing. So it's not even an apples-to-apples comparison. What we knew as RPA two years ago, or even now, is what's changing continuously. So, there is a lot of evolving components. RPA vendors are embedding low code into all these different components into one platform. So, I think that's where it is going to be very much interesting.
Diego Lomanto:
And there's a lot of interest around that.
Saikat Ray:
Yes. combined platforms, absolutely.
Mary Tetlow:
The story continues.
Diego Lomanto:
It makes a lot of sense.
Mary Tetlow:
Thank you so much for joining us, Saikat. Thanks to Gartner for being there.
Diego Lomanto:
Thank you so much. That was wonderful that was wonderful.
Mary Tetlow:
It's a real eye-opener. It's great to hear about a concept like hyperautomation direct from the source.
Diego Lomanto:
From the source, from the folks who are looking at it. It's even us, We're in the fog and they are as well, to some extent. But getting that market overview is really, really interesting.
What I think we should do next is, speaking of predictions, what do you predict is our next move?
Mary Tetlow:
Let's see. I predict we're going to hear from our Chief Product Officer.
Diego Lomanto:
Yes, I think you're right. And so we're going to bring in Param Kahlon, who's our Chief Product Officer, and he is going to walk us through, now that you've got the market overview, you've even got an overview of what's happening with UiPath as a company, we'd like to talk and have Param walk through how we're taking innovation to the market and really helping drive hyperautomation inside the enterprise. So Param, I'd like to turn it over to you.
Param Kahlon:
Hey, guys. Yes, hyperautomation--that's exactly what we're hearing from our customers and market as well. In response to the market demands, we've expanded UiPath capabilities from being a core RPA platform to automate tasks and processes to, really, an end-to-end automation platform that's able to support our customers' needs for automation through every stage, from discover to build, to run, to measure. In the discover phase, we leverage AI as well as a collaboration-based approach to figure out what automation opportunities our customers have. We leverage AI to be able to mine human activity logs as well as system logs to identify opportunities for automation. We also create a collaboration, a crowd-sourcing-based approach, to get everyone engaged in the business of at a company.
In the build phase, we have easy-to-use tools that help anybody in the organization create automations with very simple drag-and-drop tools. We have hundreds of activities that we ship out of the box that can be leveraged by a business analyst or a COE (Robotic Center-of-Excellence) developer to create these automations. We also have a very vibrant ecosystem of community developers that have created hundreds of other activities that are available on our marketplace.
We meet our customers and their demands at the level of expertise that they have. We have built tools that are targeted for business analysts that can create automations with very simple tools without having any knowledge of programming. We have tools that are targeted to RPA developers that are in a COE at a company--the automation COE, for example. And we also have tools that are targeted to professional developers that can break into code and do more sophisticated types of automations.
In manage, we're able to meet the needs of companies that can take these automations that are built by people within the enterprise and scalably and securely deploy them within the enterprise. We can deploy them in a private cloud environment, in an on-premise environment, or as a public cloud SaaS service that can be leveraged by UiPath.
In the run phase, our customers can deploy our robots in highly immersive attended experiences or in standalone unattended mode. These robots can leverage hundreds of native connectors that are built to commonly used line-of-business applications like SAP, Salesforce, ServiceNow, or also the commonly used productivity applications like Microsoft Office or G Suite.
In the engage phase, we're building capabilities that will help companies involve every person at the organization in the business of automation.
And then finally, after you build these automations and you have deployed them, it's very important for you to go back and measure the impact that automation is having on your business--not just the operational metrics, but also the business metrics, the business transformation, and the impact that automation is having on your business. And we provide out-of-the-box tools and dashboards that's able to measure that impact, and you're able to quantify the ROI of automation.
To sum it up, we're providing the end-to-end automation platform that's driving business transformation at a pace faster than any technology in the history of computing. We've gone from being the leading RPA tool to the leading end-to-end automation platform that's driving business transformation for our customers through every stage of automation.
Diego Lomanto:
Thanks, Param. Thanks for the overview. And I know I speak for Mary and everyone when I say we are very excited about where you and your team are taking the product, and certainly the market's responding in kind.
Mary Tetlow:
Absolutely.
Diego Lomanto:
Let's drill down a couple of questions. So what I'd like to start with first is let's talk about the discover phase of the portfolio. We even heard Saikat talking about how the process mining and discovery are a really important part of the overall equation. Can you expand upon how we're helping our customers determine what to automate?
Param Kahlon:
Yes, great question, Diego. We have made extensive investments to help our customers understand what processes and tasks are executed to complete business processes in an organization. We take an AI and a database approach to understand and mine human activity logs, but also system logs to discover not only processes, but also identify the bottlenecks and inefficiencies that exist in the business process today. Then we can take a look at those inefficiencies and optimize the process, and then go and automate the optimized process.
So for AI-related, we have two products. One is task mining that's based on mining human activity logs, and then process mining that discovers long end-to-end processes and all the variants of those processes by understanding system logs and discovering processes through system logs.
We also have a collaboration-based approach to be able to understand processes in an organization. Anybody in the company can submit an idea, which can then be prioritized by the COE to decide what they want to automate and how they want to automate. Along with the idea, business users and subject matter experts are also able to record how they're doing the work and easily convert that into a process design document, or PDD, so that they can relay the requirements very precisely to the COE.
Mary Tetlow:
Thanks, Param. Something that really interests me is you mentioned that we are extending automation to reach within the enterprise with new capabilities for easier building of automations by more people. So what are we bringing to market there?
Param Kahlon:
Thanks, Mary, great question. Yes, we believe that every person in the organization should be able to free themselves from the mundane. Now, business users in the organization have different needs for automation. We have provided tools like StudioX that can help any user in the organization create automations that are relevant for them. We've also created very engaging experiences so that even if you are not creating automations yourself, you are able to easily take automations that other people have created and run them in your context for your processes, helping every person within the organization be able to engage in the business of automation.
Diego Lomanto:
Okay, one more question. You talked about automation as the application. Could you expand on that concept a little further?
Param Kahlon:
Thanks, Diego. Yes, we believe automation is the application. Now today, business users have to jump hoops across different business applications to do simple work. What we're creating is one simple, screen-based application that is powered by robots to help complete the business process, yet business users see very simple and easy-to-consume screens.
We spent the last few decades building business applications with a data-first approach. Now we're actually creating business applications that are powered based on a business process mindset so that it helps business users complete business processes without having to worry about how the data gets stored across the different applications. Let a robot do the work of cascading that information across the business applications that exist.
Mary Tetlow:
Thanks, Param. Thanks so much I love how Param, for me, brings our whole platform to life for a business user.
Diego Lomanto:
Yes, and makes it simpler to understand.
Mary Tetlow:
Well, we're going to switch gears here for a minute. UiPath has long viewed workforce readiness and education as a strategic pillar. In 2018, we established the UiPath Academic Alliance, which has attracted over 400 universities to this program. Recently, we've started to see our vision of a robot for every person starting to get traction. And we're seeing a lot of universities where they're provisioning a robot for every student.
Diego Lomanto:
Like, for example, last summer the College of William and Mary rolled out a robot for every student, and so they're giving their students the opportunity to work with robots and learn a new skill, a new capability that they're bringing with them into the workforce to make them more valuable as fresh, new employees.
So we're actually now going to see our, we're going to visit with our Chief Learning Officer, Tom Clancy, who is down at George Mason University in Fairfax, Virginia, talking to the Dean of the Business School there, where they're introducing thousands of robots to their business school students. So over to you, Tom.
Tom Clancy:
Thanks, Mary. Welcome, everybody, to the beautiful campus of George Mason University. I am here with the Dean Peiperl who is Dean of the School of Business at George Mason University.
Maury Peiperl:
Welcome.
Diego Lomanto:
Thanks so much. Welcome to you. Great to have you here.
Tom Clancy:
Dean, could you talk a little bit about your vision? And what I read and what I've heard from a lot of the people is that you like to attract really top talented people, both from a student point of view and a faculty point of view. But then you want to marry them as much as possible to industry, because especially because of where you are, government. So could you talk about that as part of your vision?
Maury Peiperl:
Yes, I think you described it well. This is kind of a nexus where lots of different streams of backgrounds in thought and work come together. But above all, I would like to think George Mason is closest to practice for our university. So people who come here typically have been in work, full-time or part-time work, before they come and study with us. Many are still working while they do study with us, so there's an emphasis on flexibility, there's an emphasis on practicality, how do we get things done, and of course, on innovation, what's the next best way to get things done?
Tom Clancy:
That's great. From a digital point of view, from a digital skills, the future of work point of view, we're really excited to be working with George Mason.
Maury Peiperl:
We're excited to be working with UiPath as well.
Tom Clancy:
Right. When we were looking at the skills gap, where tens of millions of people literally have to change their jobs over the upcoming years, you were doing the same thing. And when we put together our Academic Alliance Program, you were thinking that you needed to team with one of those future-generation digital skills companies. So we were really fortunate that a top business school like yourself was interested in us. So what's your view on that?
Maury Peiperl:
Well, that's kind of you to say. We do have a strong emphasis on the digital future of work, and we're trying to go where work is going and where we believe our students and our friends and alumni will be going--not just today, tomorrow, but over the coming years. The thing is, if you want to be ready for the digital future, you have to be working to the extent possible in the digital present, and this is what you guys have done. And so it's very exciting to us to be able to have that partnership with a company that's already moving the bar--not just something that's going to change down the road, but something we can do now today.
Tom Clancy:
Yes, what's exciting is our partnership continues to grow, and the latest part of the partnership was a $16 million donation in kind to George Mason. How will that impact you and your students?
Maury Peiperl:
Well, it's actually going to be able to impact every single student that works with our School of Business. And so that's not only the 5,000 who are enrolled in the School of Business, it's another couple of thousand who take a course or several courses with us during their time at Mason. So we're going to make the RPA tools available to anybody that works with the School of Business. And so it will be--it's started, but it will be a big continuing opportunity for the training, and then, of course, their use. And personally, I myself, I'm also looking forward to being fully RPA-enabled.
Tom Clancy:
That's very doable. So what we like to talk about in the business side is a robot on every desktop. And as we were working with you, what we came up with is a bot for every student. So in the School of Business, all those students, I believe, will be going through some type of courseware on RPA and UiPath.
Maury Peiperl:
Yes, we're going to offer this, and we have started to offer it in training workshops and through some of our courses with a few of our faculty. But really, what we'll be doing in the coming weeks and months is to expand that to more courses, more faculty, and through them, more students. I would imagine that your experience has been different people will use the tools differently, so it isn't just about taking a course and all doing the same thing. It's about getting the training and then being able, as you say, to have a bot for every student that helps that student with the work and the mission that they're trying to accomplish. Very exciting.
Tom Clancy:
Yes, we're hoping that some of the students that are doing internships, once they learn robots, they can take that out to the companies that they're working for today.
Maury Peiperl:
Yes. What's wonderful is when we hear about an internship experience where the company says, "Hey, not only did the student come and do well and learn from us, we learned something from the student." That's what you want to get to. It's not going to happen there, but it's exciting.
Interestingly, it's not just this kind of long-term plan that we're executing. The nature of innovation, as you all know, has something to do with planning, but a lot to do with improvisation and opportunism, and Mason is nothing if not an opportunistic university. It's great just to see this process unfolding, you guys leading, and we just feel lucky to be part of it
Tom Clancy:
Thank you, Dean.
Maury Peiperl:
Thank you, Tom.
Tom Clancy:
And Mary, back to you.
Mary Tetlow:
Thanks, Tom, really terrific. And thanks, Dean.
Diego Lomanto:
Yes, that's great.
Mary Tetlow:
I had the privilege of actually being able to visit, go over to Mason.
Diego Lomanto:
They let you out once in a while?
Mary Tetlow:
Yes, I got out there. The students are really excited about being able to bring this into the workforce.
Diego Lomanto:
Yes, right. What we're seeing now is that they're demanding that they get to work with their robots when they start their first job. This is really, really cool to be part of.
All right, Mary, what's coming now? The main event? We have the main event. What's up?
Mary Tetlow:
We've made the main event. We are joined by our CEO, Daniel Dines, who is here to answer any question you would care to throw at him.
Daniel Dines:
Yes, absolutely. We have an open mic here now.
Mary Tetlow:
So good to see you. We're going to prime the pump a little bit with a few questions of our own. So I'm going to ask the first question. When you started the company back in Romania, did you ever dream that what the company has grown into today would be a reality? Could you take us on that journey a little bit?
Daniel Dines:
Well, I think if I was able to dream so big, I was delusional back then. But I can tell you a story that I never have told anyone before. My personal goal when I started this company with the first, like, five employees was to be able along the way to buy them a nice car. I was a lot younger, and I love cars, like many of us do. And I was particularly sold on one sport car, a Honda model, Honda S2000, a really cool car. And I guess now they can buy a fleet of those.
Diego Lomanto:
That's amazing. So, if we go from those days to today, we just heard Ashim walk through the financial results and the success that we had in 2019. What do you attribute the growth and the success that we've had to? Why did we have such a great financial year? What do you think that's about?
Daniel Dines:
Well, I don't think there is one single thing. It's a multitude of things. First of all, we've become a lot more organized, and we've started to operate with a lot more operational rigor throughout the year. Our investment, our early investment in sales, paid off later in the year. And of course, it's our product. It was always about our product. We are a true product company.
Diego Lomanto:
Yes, it starts with the product. But I think one of the signs of a maturing company is that there's a lot of little things happening right that come together to drive success.
Daniel Dines:
It should, yes.
Diego Lomanto:
That's what happened. So, we're entering that phase of maturity where a lot of things are coming together.
Mary Tetlow:
Speaking of 2019, humility is one of our core values, and it's the number-one value. So can you talk about how some of the trials of 2019 challenged the humbleness of our company?
Daniel Dines:
Well, I could say that 2019 was a humbling year for us. I always preach humility as a core value, because humility lets you, first of all, listen to the other and can let you change your mind without fear of losing face. But in 2019, we paid the price for some of our bold bets, and they don't always work.
Mary Tetlow:
Right.
Daniel Dines:
So in a way, it led us. I think humility led us to actually recognize our mistakes and course-correct them in time.
Diego Lomanto:
I think when you're blitz-scaling, in a sense, you make mistakes. It's part of it and it's how you recover.
Daniel Dines:
Yes, you always make mistakes, Diego.
Diego Lomanto:
Yes, trust me, I know. I've made a lot of mistakes. Big mistakes. I think it's normal. You can't guess our time to market. You just have to, I think, from what we've learned from you as people who are following your leadership, is that you can't guess our time to market. You have to adapt, and humility opens your eyes to what's actually happening in reality.
Daniel Dines:
And it gives you the opportunity to fast correct the course. This is very important. I think this is the most important business lessons that I ever had in my life.
Diego Lomanto:
Yes. One of the things that I think we're seeing in that line is our evolution of our product. We came to market with RPA at the core. And over the course of 2019 into now, we're transforming into RPA plus other adjacent technologies, which is becoming hyperautomation. Why do you think that that's the right strategy for us now?
Daniel Dines:
We have always developed our product by listening to the customers. We are fortunate enough to be in a market where, by simply listening to the customer, we will build a great product. We don't have to innovate to come with the next best idea. And our customers are asking for a platform. They are tired of trying various different small components that are obviously part of end-to-end automation.
So, I think it was just a response to the customers. And I remember even a year ago, we were trying to build various components. Even our own product teams didn't really see the future until we've come up with, "This is actually a platform. Let's put all the pieces into a platform," and everything made sense suddenly.
Diego Lomanto:
And then the customers respond. You took their feedback and you turned it around back to them, and the customers have responded to that in kind.
So, what RPA and AI? We talked to Saikat when he was here, a little bit about this. We've heard intelligent automation; we've heard the confluence of those two things coming together for a while now. But it seems to have gone beyond just AI, and maybe specifically around process mining, why are we moving into that space?
Daniel Dines:
In a sense, AI has always powered RPA. Our first entry into the market, our first competitive advantage, was our ability to automate application, the surface application that do not expose any API. So, using like image comparison, detecting objects on the screen. This is AI.
Diego Lomanto:
Yes, that's AI. Computer vision is AI. Yes.
Daniel Dines:
Yes, and to me, AI, it's not the goal in itself. AI is a set of technologies that power other products that in the end serve as a business tool. This is what I'm asking anyone if they ask, "Do you offer AI in the product?" My natural question is, "What do we want to achieve?"
Mary Tetlow:
Exactly, right.
Daniel Dines:
And we offer a lot of AI into our product, but not for the sake of AI.
Mary Tetlow:
Right.
Diego Lomanto:
Right, to enable the automation of more complex processes. AI is a major factor of that, but it's not the only thing that hyperautomation contains. It's part of the equation.
Daniel Dines:
It's part of the equation, yes, that's absolutely true.
Mary Tetlow:
Daniel, I've been seeing lots of questions coming in from our viewers so, I think, why don't we start with those?
Diego Lomanto:
All right, so I'll start with the first one.
Mary Tetlow:
Anyone else out there who would like to ask a question, put it in the chat box and we'll get it up here.
Diego Lomanto:
So, the first one is from Avi. I'm not sure where she's from. "How important will it be for RPA developers to learn machine learning and artificial intelligence, and how deep will we need to go into these technologies?"
Daniel Dines:
Actually, I had the discussion yesterday with a few of our own process engineers. And I told them, "This is an amazing opportunity for you guys to get on with the RPA books into extending your knowledge. Your career will be a lot more valuable, your skills will be more valuable." I think that every RPA developer can go a bit horizontal and understand process mining, task mining, analytics, a bit of AI, a bit of machine learning. Machine learning is nowadays not the rocket science that it used to be, even 2 two years ago.
Mary Tetlow:
So that ties into what--
Daniel Dines:
I can be dangerous a little bit, myself.
Diego Lomanto:
How do they get started? I'm just curious. I know there's a lot of training, there's a lot of courses. I see it all over the place, but what's the best way for someone who knows RPA developing to get there?
Daniel Dines:
I think using our AI fabric product is the best way. We come with predefined models, and they can work with the customers and retrain these models and see instant gratification of increasing accuracy, performance, and everything else. It's a good way to get their hands on.
Diego Lomanto:
Perfect.
Mary Tetlow:
So this question is from Vabe or Vaib. "How did the vision of a robot for every person come into your mind? What was the trigger behind it?"
Daniel Dines:
Well, you know, guys, I used to work for Microsoft, so it was kind of natural to think of Bill Gates and a PC on every desktop metaphor. And since I was a kid, I didn't really like to do repetitive stuff, so I thought, "It's great to have an assistant to help you." So, this was the idea of the robot for every person. And it's good. It's a robot or an assistant or whatever, but we all it.
Mary Tetlow:
Absolutely.
Diego Lomanto:
Let me drill down on that before we go to the next question. So, let's define a robot for every person a little bit, because I think it's evolved since we first introduced it a year and a half ago. Describe the continuum between building your own robots and working with robots. Can you describe what the future will look like for people in both regards?
Daniel Dines:
I think for most of us, we will work side-by-side with robots. It's not that we will build our own robots, but we will consume robots or automation produced by other people. But we believe that in every department, there are a few technically savvy folks that will be able to use a product like StudioX, and they will be able to build automation that will be shared across the department. And that will result in a lot higher productivity.
And in the end, this is not only productivity or cost savings. It's also about improving the lives of the employees. When you get rid of your daily plate of these mundane activities, your job becomes much better. And we've seen it across many customers.
Diego Lomanto:
Yes. I think, from what I'm hearing, you have the RPA developers who build automations, maybe unattended automations that operate in the background and do a lot of the work that happens in the organization. You have system developers who are building their own automations for themselves, using StudioX. And then you have a big majority, actually, that are working with automations built for them by other people and attended automation, in a sense, through applications. Perfect. I think the next question is a segue, right?
Mary Tetlow:
Yes, it really is, and it goes to our purpose, really, as a company and what you were just talking about. From Stefan, "How does RPA have a positive impact in the world? Many people look at automation as a job killer. How do you address that?"
Daniel Dines:
I know that even one of our competitors yesterday said that RPA kills jobs. They live in a different reality than us. In our reality, RPA enhances jobs and actually helps businesses scale much faster. And in a country that is challenged by aging of people, like Japan, people use automation to replace people that retire. And the new generation doesn't work the same type of jobs that these people work. It's kind of a necessity for businesses to adopt automation. This is the right moment; it's the good timing. It's enhancing jobs and replacing ugly activities that maybe our generation was used to do without questioning it. The new generation is questioning this type of activity.
Diego Lomanto:
Right, right, and they want those mundane tasks to go. We talked, when we saw--
Daniel Dines:
They've already started showing that they accept half of the salary for a nice job than something ugly.
Mary Tetlow:
Right, that's right.
Diego Lomanto:
Fulfillment is more important than making money, so to speak, and getting the mundane stuff off their plate is important.
Okay, shifting gears a bit here, a great question from Anthony. "Microsoft is entering the RPA market. What are your thoughts on their potential and their threat?"
Daniel Dines:
First of all, it's flattering for me and for us personally. We've built this company using a lot of Microsoft technology, so we are grateful for what they build. We use Azure as well as other clouds to power our cloud platform. And to me, it's a great validation of the space. And one of the bottlenecks in RPA adoption is the CIOs that see it still as a mundane screen scraping. Microsoft has come in and said, "Well, we looked at the space and it's not as mundane as you guys thought. It's something that will stay. It's not a fad." This being said, I believe that we have great technology, competitive advantage, and this is our life in the gate. We will live and die by what we can do in this space, while for Microsoft, it's not maybe the most strategic thing in the world.
Diego Lomanto:
I also think, Daniel, it's not like you can create UI automation capabilities overnight. How long did it take?
Daniel Dines:
Microsoft has attempted a few times to create UI automation. They had, even 20 years ago, they had a product called Visual Test. They sold it to HP, and they recently had another test product in Visual Studio. They retired it. It's not easy, and we all know that it's not easy.
Diego Lomanto:
It's hard science. It takes a lot of engineering work to get, to be able to read what's happening on a screen in a way that's not ever prone, it takes a lot of development work, which takes many years to develop. The mythical man-month for a program, you can't just throw 1,000 programmers on it.
Daniel Dines:
We still find hundreds of bugs per year in our core technology. It takes time to fix them. Maybe you go again in Japan and you find the Java application built by Fujitsu. Can you work with it? I don't know. Most people cannot. It’s a lot of little knowledge accumulated in time.
Diego Lomanto:
And I read a stat that 80% of applications don't even have APIs. So, to get to that long tail of automation, you really need to be able to read what's on the screen, and that's hard.
Daniel Dines:
I would (inaudible) to the devil for the application that have UI for citizen developers and RPA developers. It's much easier to use UI. UI, in a sense, it's a new API. Think about something: developers and designers and UX experts spend so much time building this nice user interface. But in the end day, they use APIs. But these interfaces are just a nice way, a simple way for other people to consume applications. Much easier than going directly to the--my forecast is that in the end, people will understand that other robots can consume user interfaces, and they will be a bit more reluctant to change, or they will introduce UI versioning in places, like we have API versioning. Just a normal thing.
Diego Lomanto:
So, layers of API layers of UIs--that's are really interesting.
Mary Tetlow:
This is a shift gears and it's a multiple question from Arthur at Gartner. "Many prospects and customers have expressed concerns about UiPath layoffs. Can you provide more insight about the layoffs? Was revenue growth not as high as expected? Do investors demand greater profitability, fewer losses? What's to prevent this situation from happening again?"
Daniel Dines:
I think we need to look a bit in perspective at 2018 first, which was a fantastic year for us. We grew from a base of $45 million to almost a $170 million. And we made the chain leap in front of our competitors. We started '18 as being number 3. We ended up '18 as being number 1. And it was in a year when we raised a few hundred millions. SoftBank was throwing money on everyone, including one of our competitors. Again, I talked with Masayoshi Son, and he told me to take $1 billion from him and spend it. "When you are ready spending it, I'll give you another billion." That's a real story.
Well, that was not only us; that was, I think, the entire industry. It was a big fluffing. But for us, everything worked. Our cash burn in '18 was not material to the development. So, we entered '19 with the same mindset. And the market was really not there in the beginning of '19, the market where we are today. And of course, at some point, and we lacked the operational rigor. It's very difficult to transition a company that grows 5X, which is unheard of.
Diego Lomanto:
You're going fast. It's hard to keep up.
Daniel Dines:
Remember, we are the number one fastest-growing [enterprise software] technology in the World. So, we're an enterprise software company, not a consumer company. So it's kind of difficult to shift from these mentality, where everything works, into an operational rigor. Some people might even argue operational rigor will result in reduced market share.
So, throughout the year, we understood that we have to transform as a company. And that was, that was really a big opportunity to also get back in shape. It's like some folks that didn't go to the gym for a while and then--
Diego Lomanto:
The first couple of exercises are tough, yes.
Daniel Dines:
Overall, our culture has improved as a result of this. Our agility in the market has improved. And it's, it was, to my really surprise, I've seen all our competitors dancing in joy that UiPath has stumbled. It was on the contrary, UiPath has made the right thing for UiPath, and we haven't stumbled. We've had the best quarter in our history, our Q4, maybe it's bringing the combined revenue of our top two competitors combined. So we were flat. It was the right thing to do, and to me, that shows strength.
Diego Lomanto:
Yes, I think it's a sign of--we talked even back in the beginning with humility and becoming a mature company. I can't speak for everyone who works at UiPath, but seeing that we made--we went through some tough decisions and some tough times during that period. But we're coming out of it as a much more mature company that is actually thinking ahead and doing the right thing to put us on the path for really long-term success, because that's what we all want. We want to build the next great enterprise software company, and you have to sometimes course-correct, is how most of us took I, and that's what we're feeling right now, is we're on the path.
Daniel Dines:
And many of our customers really understood this. They were kind of surprised. They received letters from our competitors. They came to us, surprised. Why do people behave like this? I think it was interesting to understand the frustration of our competitors. So we are growing so fast, leaving them behind created a lot of frustrations. And they generated really, kind of a low-class response in this market. We expected more of a classy competition, especially in this type of market, an enterprise market.
Diego Lomanto:
Well, moving to the top in 2019, we learned also what happens to market leaders. When you stumble, everyone jumps in and swarms and we have to deal with it. But we're learning how to do that as the market leaders.
Mary Tetlow:
We have a question from Jared at Cowan. "As your customers gain scale, how are you making sure UiPath scales with them while making sure the culture stays intact?"
Daniel Dines:
Even in 2019, we have grown our employee base by 50%, so from 2,000 people to 3,000 people at the end of 2019. And we are, we as a company, and you know, guys, we really, we put culture as number-one priority. It doesn't succeed all the time. We had a lot of internal pressure. It's a lot of discussions. We even have our feedback channel where people anonymously say the problems which you have, which is fine.
Mary Tetlow:
It happens to all of us.
Daniel Dines:
But I think this is, this is a bit, it's healthy. We want to be a transparent company. We don't want to hide our dirty clothes. And sometimes, people took our dirty clothes in public and we talked openly. And sometimes it deteriorates the culture then--but I think at our core, we are a good company, and we have a company where people like to work, and we have a company where we are true to our word of making a good place to work, a place where I and everyone else would like to come.
And I believe that for our customers, and speaking to them, this is a very important thing, to work with people that they like and people that they want to work. And most of the, most of our customers are great companies to work with. It's this important for them to see a good culture and the culture based of humility, because that one makes us listen. We never go to a customer and say, "This is not right. You are completely wrong." We ask, "Why do you want this?? And when you ask freely customers and they say kind of the same, you understand, maybe you are your own boss.
Diego Lomanto:
It's about humility. We're going to pause for a second, because we're out of time, but we have so many more questions.
Mary Tetlow:
Would you be able to stay to answer some more questions?
Daniel Dines:
I'm always up for questions.
Mary Tetlow:
All right, okay, because they just keep coming.
Diego Lomanto:
Can we keep going? Okay.
Mary Tetlow:
Okay, so can we take a break? Okay. We know that some of you all have to go. We said we'd be finished at the top of the hour. We've just passed that. So we're going to take 2 minutes and say goodbye to you who have to go and invite anyone who can stay to please stay.
Diego Lomanto:
Yes, thanks for being here.
Mary Tetlow:
Daniel will continue answering questions and you can continue to ask them. Okay, we'll see you in 2 minutes.
** After Break **
Mary Tetlow:
And we're back.
Diego Lomanto:
We're back with Daniel.
Mary Tetlow:
Welcome back. So, thanks for those of you who have stuck around. We've got tons of questions, so we'll get right into it, if you're ready. All right, so this is a question from Max at Dentsu. "Who in the C-suite should lead the hyperautomation agenda?"
Daniel Dines:
Well, I think that's really an interesting question because there is no right answer. I think I've seen different champions in different companies. CFO usually is our champion, but the CIO increasingly. Sometimes the COO of a company, sometimes the CEO of a company. So I think the right answer is the person that is most sold on the automation and the person that sees the future will fully automated company.
Diego Lomanto:
Right, so they have vision for where the company could go. It could be the CFO, it could be the CIO, it could be the Chief Digital Officer. There's a bunch of different places they could live, but it's the person who is thinking about how is this company going to remain competitive in 5 years, 10 years? That makes a lot of sense. Okay, so I'll ask the next one. How do RPA and process mining fit together? And that's from Barclays.
Daniel Dines:
Well, actually, it's a great marriage between them because one of the bottlenecks of RPA adoption is discovery of processes and process mining is a great tool, which is why we made the investment in UiPath Process Mining in 2019. And we are completely integrating process mining and task mining into RPA. We believe that in a few years, most of the RPA will be created directly from process mining and task mining combination.
Mary Tetlow:
Yes, that's great.
Diego Lomanto:
So, we'll see that RPA, that the automations that are developed are seeded by what process mining is finding in terms of where there are bottlenecks or where there's the most opportunity. So, it's a fuel for RPA, in a sense, that it drives what should the automated and so they work.
Daniel Dines:
And not only for RPA, it's a fuel for automation and for continuous improvement of processes. It's an essential tool in the absence of the automation specialties.
Diego Lomanto:
This question came from a couple of people. "What are the main differences between you and your competition?"
Daniel Dines:
Well, again, if we look historically, we built this company for 10 years with having just technology in mind. It's hard to admit, but we didn't care so much about the customers, about use cases. When people asked me 5 years ago, "What are the use cases?" I would say, "Everything you do." But that helped us. This drive for technology helped us build the best computer vision out there. And that translated into success later, when we really understood the customer and we've come to appreciate them, build everything else based on the customer requests. But we had hard core tech, which is really our competitive advantage. And when we built it, we realized that offers the lowest total cost of ownership as people scale.
Because in every POC empire, what we've done in a competitive situation, same process, UiPath versus competitors, we implement maybe 50% faster. That translates into really lower total cost of ownership. Because this technology is service intensive. You can't just take it and run. You need a lot of services to make it run. Also, it requires less maintenance because our computer vision is much more accurate than our competitors'. Our robots break less often, so that reduced the maintenance done. All in one, it's a big differentiator. I don't know really instances when we lost the technical battle. And look at Gartner and Forrester; they clearly score us as the best in terms of product and execution.
Diego Lomanto:
And I think, Daniel, when you make the right choices early on with the technology and you invest so much in great technology, that compounds over time. And that's not something you can then just swoop in after and invest in and try to catch up. It's those early decisions which really put us on the pace with the technology that differentiates.
Mary Tetlow:
So, um, Annika asks, "Can you talk about test automation?"
Daniel Dines:
Yes. Well, the computer vision powers both process automation and test automation. And our entry into the test automation market is mostly for our existing customers. That one, it's--let's see it as a continuum between test and automation. If we implement an enterprise software like SAP or Workday, how do you test them? You have to test them. You have to test that they meet the requirements and they are resilient to upgrades of the vendor. If you use the same bits to test it automatically and reuse the same bits to automate the processes, it's a great combo. It's a great continuum. So, it was kind of natural, getting into test automation.
Diego Lomanto:
All right, I'll ask this one. Emily wants to know, "What was it like to make the cover of Forbes?"
Mary Tetlow:
And do we have a Forbes? We could just show it while we--
Daniel Dines:
Well, as much as I love talking to Alex, in the end, it was a bit embarrassing.
Mary Tetlow:
It's so nice.
Diego Lomanto:
Next question, Mary.
Mary Tetlow:
Okay, this is from Michael. "We're beginning to see the emergence of digital worker marketplaces akin to Apple's App Store. What is your point of view on this? Is this your app platform vision?"
Daniel Dines:
Well, I think this is difficult to know at this point. We're not in the consumer market. And as for enterprise market, they are not as successful. We can look at Salesforce, which is probably the most successful app. But still, I don't think it's significant for Salesforce revenue.
I believe that definitely, there will be a market, and I see it more on the machine learning models markets or on the AI market than building the kind of world for micro automations market. I think there is an internal market for micro-automations built by a citizen developer or RPA or even like guided automation that shows you how to do certain things. But as a market, my bet is on the kind of AI components market that can be dragged under into an automation workflow.
Diego Lomanto:
Right, because they get the benefit of scale, too, right? So, if you can leverage an AI model that's been built at scale by another organization, you may not have the training data to make that model work inside your organization. But the external vendor might, so it makes a lot of sense that that might be something that we can sell.
Okay, a question from David, SiliconANGLE. "A recent report on Wikibon predicted that the TAM for RPA could be as large as $30 billion. We've had some feedback that that might even be conservative. How do you see the TAM evolving?"
Daniel Dines:
Well, that was an excellent article, by the way, an excellent analysis. I shared it with many people. Thank you. Again, it doesn't matter if it's $30 billion or $100 billion, $30 billion or even $15 billion. It's a big enough market to go for it. And anyway, obviously we play into a much bigger market which includes also low-code, no-code, and business application platforms.
Diego Lomanto:
Right. So, let me let me hone in on that question just a little bit. What takes the TAM from what it is today to $30 billion, and then what potentially takes it to $100 billion? Those are big variances, and there's some acceleration driver around that. Is it low code? Is it system development? What takes the TAM bigger than what it is today?
Daniel Dines:
I think the inclusion of AI into the automation is clearly the possible $30 billion market. More than the $30 billion market, if one of these platforms will become the de facto platform for building applications, building all the enterprise applications, that might go.
Diego Lomanto:
Right, and that's what we mean by ‘Automation is the Application’. If now you have automations running, building on top of those automations, the interface for your end users to work with the robots, now you're really creating this one point of contact for your workers to engage with the systems of records below it.
Mary Tetlow:
I would think also, there's an increasing customer acceptance of RPA and automation in general.
Daniel Dines:
I think--but I know everybody says RPA is the first stop of a digital transformation.
Mary Tetlow:
Yes.
Diego Lomanto:
Makes sense.
Mary Tetlow:
From Talia, this is the next question about the business. "What was a defining or turning point early on that was essential for UiPath's, ultimate success? How would you advise young entrepreneurs to recognize and analyze those moments?"
Daniel Dines:
The defining moment was when we turned from a technology company into a kind of customer-first company. I'm an angel investor. I talk with many young entrepreneurs, or sometimes not so young. But they usually come from an engineering background. And they don't recognize and understand how important it is to become customer focused. It's a big pivot that you have to make from your engineering mind into a customer-first mind. Don't think you are smarter than the customers and they should just be pleased that you come with a great piece of technology. I discovered that our customers are smarter than us. But that was really the moment. If we couldn't make this transition, I think we would still be a small company.
Diego Lomanto:
With a technology that could be applied to some use cases, but when we started listening to customers, they told us what the technology needs to do. Could you talk a little bit about, I think what exemplifies us is when you talk about when you went to India for the first time and you saw how customers are using that? Please share that story. I think it's an interesting one for the public to hear.
Daniel Dines:
Oh, what a breakthrough!
Diego Lomanto:
Yes, the breakthrough story.
Daniel Dines:
If I go back to 2013, October, one of our prospects came to us and starting talking about BPO and RPA. I didn't know what BPO was at the time, so I had to learn later it's business process outsourcing. I really didn't know this market existed at all. Who would send the orders and invoices just be processed by another company. I thought they should be kind of automated.
And this customer was really early on the automation journey. And they were using one of our competitors. And they were really unpleased. That was really an early sign, "What does it mean not to be flexible and not to listen to the customers?" And it was actually someone in middle management of that company that searched on the Internet a compatible solution. We were not into RPA particularly. We were sort of a nobody. But they really liked our nice user interface that we used to use, you know, these nice flow charts. And that was more similar to our company. It was a visual approach versus scripting. And they picked us and we went to there for like a 2-month pilot. 50% of the company went to India. And we've done this kind of being hidden from the competitors. And in the end, of course, they picked us. But for them, it was really a big surprise. They didn't understand. Is it the technology better or the people that we sent? And I told them both.
We could have, there are kind of astral moments in one's life. In 2014, I was on the verge of completely ruining my career. After 8 years after I left Microsoft, I had become basically unemployable. We had not yet seen this big market. We thought this technology can be applied to really small use cases, more like IT-driven, small, small, small IT shops. And that was the big moment. Sometimes it happens. But another interesting lesson is when you feel this is your moment and you have one chance, go big for it, but we really went big.
Diego Lomanto:
So, entrepreneurs, there are some lessons there that you can wrap up. Maybe we can write blog post summarizing some of those.
Mary Tetlow:
Yes, there are cultural values here.
Diego Lomanto:
Absolutely. Okay, next question is from Delphine. "What is needed to make citizen development actually mainstream."
Daniel Dines:
Again, our tool, StudioX, is at the verge of being used by citizen developers, and we are working every day to fix some stuff that doesn't come handily to them. But it's also a lot of governance around deploying automation. You cannot suddenly let your entire organization crafting some automations wildly. It would be the same as if we had accessed documents or accessed databases that were floating [the enterprise] around without any governance. So, this is the number-one thing that we heard from our customers: build good governance. And this is what we are delivering, to be able to deploy automations [for every person to benefit].
Diego Lomanto:
We hear that all the time. "We want to use it, but we need to govern. We need to know what they're doing with it, how it's being accessed." I can tell you, a little preview into our next release, there's a lot of governance capabilities that we're working on right now to make that more accessible.
Mary Tetlow:
So, a question from Tim at JP Morgan. "Can you provide an example where a customer that has adopted attended automation broadly and it has empowered them to transform their business more broadly as a result?"
Daniel Dines:
Well, this market is new. We have customers that adopted attended automation and deployed to tens of thousands of employees. And we are in the process of measuring the results and measuring the NPS score all of the employees working with robots, this is great. Measuring, building, measuring exactly the business value, it's a bit more complicated. It's like in the end, even when we talk to customers, I can ask them, "How do you measure the business value of Microsoft Excel?" It makes everyone's life a bit better, but it's difficult to measure. We all know that automation makes a life better. But we look at number of times through dashboards, monthly active robots running, daily active robots, etc. We look a lot of KPIs, but I don't think there is a standard yet to say yes, we're done, we have saved costs by these specific millions and we improved productivity by this specific amount. We are going to get there.
Diego Lomanto:
Well, I think was also what led us to launch UiPath insights, to be able to quantify the business outcomes directly in the platform.
Daniel Dines:
UiPath insights is directly connected to the attended automation and provides out of the box the relevant metrics.
Diego Lomanto:
It's really important to able to show the business value. All right, next question from Andrew at Credit Suisse. "Do you envision that every employee will be fluent in RPA or will there be a few power users who create and develop RPA solutions for the rest of the firm?"
Daniel Dines:
I think I have answered before. We believe in the concept of the power of the citizen developer, but most of the employees will consume automation.
Diego Lomanto:
Right, so RPA developers building those unattended and more back-end type things than you have seasoned developers using StudioX. And you have a broad group, everyone in the organization, is working with attended robots.
Daniel Dines:
One of the main differences between the attended and unattended is attended, it's a bit more complicated. You have to build in exception handling, human in the loop. It's way more elaborate. With attended automation, you don't have to care about credentials, you don't have to care about exceptions. When you don't know how to do something, you can just ask a user, "Show me what to do," and the robot continues. It's much easier to build. So, this is why we can tap into longer tape of say micro-automations, micro work.
Diego Lomanto:
Right, you don't have to plan every scenario out. The human could give direction where needed.
I think we have our last question. You may do the honor.
Mary Tetlow:
This is from Zoe in London, and it's, "The bio of the CEO of one of your competitors says they are larger than their top three competitors combined. How do you reconcile that?"
Daniel Dines:
Well, that's funny. Not true, but I hope it's not mine, because I wouldn't say such a thing in my bio.
You know, this landscape showed that it's still very immature and people can throw a lot of stuff. I think the CEO of the same company said that they have a true cloud solution. When they don't. They don't have—really… it's only they have like a virtual private cloud. It's not a true multi-tenant SaaS, but I don't know. If you go into the cloud market, everybody understands what multi-tenant is. In this market, you can say, I have a cloud solution," and you don't have multi-cloud. This is hilarious. It's like people would laugh in the technology market. In a business market, you can go with all of these types of statements. So again, we have always asked our customers, our prospects, "Go a bit deeper into the surface."
On the surface, [our competitor] can say anything, literally anything. "I am the first introducing task mining and RPA. [From earlier in the week]." You are not the first. Kryon introduced it 2 years ago, which is a good, decent competitor, in a way. So, we are not the first either. But some get away with saying anything. It really doesn't matter. This is why, in a way, I really welcome Microsoft in this because Microsoft would never say stupid things like this. So, they don't take pride. Some people really have, I think their pride cloud somehow their minds. They have to be right. This is very interesting.
A lot of time, I felt that our competitors tried to draw us in to fights in the market. And this is really against us. It's against us as a company. This is why we never responded to that. I had people in the company who said, "We should respond to this." I said, "It's not, it's really, it's not us. Let them focus on us, we will focus on the customers."
Mary Tetlow:
That's right.
Daniel Dines:
That's better.
Diego Lomanto:
Well, I don't think--so the customers are out there. I don't think there's any better way to wrap up today. And this is UiPath Live.
Mary Tetlow:
So yes, we're going to draw to a close. Thanks, Daniel.
Daniel Dines:
Thank you. Glad you had me.
Mary Tetlow:
Thanks for being here. Hope we can do this again. (Applause)
Diego Lomanto:
Thank you. Everyone who joined us today, it's been an honor to spend the hour and a half with you, for those of you who stuck around.
Mary Tetlow:
And I would just like to ask--we both would--that you tune in the next time we have UiPath live, to be announced. But I will announce that we have Forward IV coming up in October. This is our user conference. It's also the largest gathering of RPA experts and practitioners in the world. It's October 19th through the 21st at the Bellagio in Las Vegas. So you can visit our website to check it out
And we're going to leave you today with a closer look at the students at George Mason University and their faculty as they talk about how they are making a robot for every student. a reality. Thanks.
