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UiPath acquires NLP vendor in effort to expand beyond RPA

The vendor's acquisition aligns with its strategy of expanding beyond its robotic process automation footprint to try to compete more effectively with tech giants.

Aiming to broaden its technology portfolio, RPA vendor UiPath acquired natural language processing and text mining specialist Re:infer.

Founded in 2015 and based in London, Re:infer uses machine learning to decipher communication messages in documents and other unstructured text.

UiPath has made a number of acquisitions during the past few years, even as it conducted several rounds of downsizing, including a staff reduction of 5% it revealed in a June 24 SEC filing. The vendor also laid off 11% of its workforce, more than 300 employees, in 2019 after a rapid growth spurt that saw it reach a valuation of $9 billion amid a rapid expansion of the robotic process automation (RPA) market.

A bigger competition

By acquiring Re:infer, on Monday, UIPath showed it is trying to move beyond being an RPA specialist and compete more effectively with the likes of tech giants such as Microsoft, said Leslie Joseph, an analyst at Forrester Research. Microsoft expanded its Power Platform RPA system by acquiring Softomotive in 2020.

I don't think it sees any of the other RPA vendors as competition. Its eyes are on vendors like Microsoft that have a very strong market offering.
Leslie JosephAnalyst, Forrester

"I don't think it sees any of the other RPA vendors as competition," Joseph said of UiPath. "Its eyes are on vendors like Microsoft that have a very strong market offering."

Compared with RPA vendors such as Automation Anywhere and Blue Prism, UiPath has a strong sense of market evolution, leading it to expand its portfolio earlier than other RPA vendors, he said.

UiPath's own acquisitions included the purchase of ProcessGold in 2019, which enabled UiPath to offer process mining tools. In 2021, UiPath acquired Cloud Elements and gained access to AI integration technology.

UiPath has also pursued strategic partnerships, including one with data and analytics vendor Alteryx.

But the RPA market has begun to slow as technology has become widely available and increasingly affordable.

"It all boils down to this: 'How do we make ourselves continuously relevant once RPA takes a backseat or becomes more and more commoditized?' " Joseph said. That is the question UiPath is asking itself as it seeks to compete on a reasonable footing with big diversified software vendors with RPA products such as Microsoft, ServiceNow and Salesforce, he said.

Meanwhile, the Re:infer acquisition also makes sense since UiPath has worked with the NLP vendor before, he added.

Automation fabric

However, whether UiPath can ever catch up to the much bigger vendors is yet to be seen.

Because those big vendors are active in many different sectors, including RPA, their main goal is to drive consumption of their cloud across their customer base, Joseph said.

UiPath needs to redefine itself as a vendor of "automation fabric" technology to continue to compete with the giants, he said.

An automation fabric as Joseph defines it is the use of automation tools to drive a digital culture at the business level.

"It elevates automation from being this tactical thing that you apply here and there to this pervasive fabric across the enterprise technology stack that allows work to get done in far more superior forms and ways," he added.

RPA users want to integrate automation fabric technologies such as AI into their process workflows, Joseph said.

They also want technology that supports not only RPA developers but also business users and citizen developers. Finally, users want scalability support both for improved governance capabilities, and client-centric commercial models such as pay-as-you-consume. 

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