Cloud giant Salesforce is said to be looking to acquire a company that specializes in robotic process automation, or RPA, technology that helps businesses automate common and repetitive computer tasks.
The move would help boost Salesforce's position in the cloud applications market, at a time when the tech giant is going through a period of slower organic growth, partly due to the coronavirus crisis.
We checked with analysts on the RPA companies that could be potential acquisition targets for Salesforce. Here are the 10 possibilities they mentioned:
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Salesforce, like other enterprise software companies, has so far seemed to weather the pandemic better than those in certain other sectors.
However, the cloud software giant is still being cautious, and in May cut its full-year revenue targets from $21 billion down to $20 billion. That would show revenue growth of 17% from a year prior, as opposed to the higher 23% it was aiming for, which would in turn show some of Salesforce's weakest growth in recent memory.
Over the last few years, Salesforce has turned to large acquisitions — like Tableau and MuleSoft — to help meet its ambitious growth targets. It has also brought several smaller names into the fold, like its most recent acquisition of Vlocity in February.
While CEO Marc Benioff said in February that he doesn't "anticipate any major acquisitions in the short term," he also described the acquisition of Vlocity for $1.3 billion as too good to pass up. And with the company forecasting a slowdown in organic growth, that could mean that another big acquisition is at least under discussion.
"It would make sense that they would be looking for a pretty high profile acquisition, given that they had to adjust their revenue guidance, like every company did, because of COVID," said Dan Elman, an analyst with Nucleus Research. It would help Salesforce "recover the year" and boost their growth numbers in the long term, he added.
As for what kind of company Salesforce might like to actually buy, a hint may have come in the form of a recent profile of Benioff in The Information, in which an advisor to the company said that there's some interest in making a deal in the market for robotic process automation, or RPA. A Salesforce spokesperson said that the company doesn't comment on rumors or speculation.
RPA is technology that helps businesses automate the common, repetitive computer tasks, that are traditionally handled by human employees. It's a market where titans like Microsoft and its Power Platform compete with leading startups including UiPath and Automation Anywhere. Salesforce, for its part, has already been investing in RPA startups via its venture capital arm, even as it builds those capabilities into its core product.
Analysts tell Business Insider that a heavier investment in RPA would be a smart move for Salesforce, which "is going to want to keep up and accelerate faster," said Dan Newman, an analyst at Futurum Research.
"It would definitely be a growth opportunity for Salesforce, enabling them to accelerate for customers, the bot capabilities that they've already made an investment in Einstein," said Rebecca Wettemann, an analyst at Valoir. Einstein is Salesforce's artificial intelligence tool, embedded in all of its apps.
The ultimate goal, is all about making customers stick around, Newman said.
Business Insider asked analysts which RPA companies Salesforce might be eyeing for an acquisition, (with all private company valuations taken from PitchBook estimates, and market caps at the time of writing). Here are the 10 companies they thought would be a good fit:Automation Anywhere
Valuation: $6.8 billion
Why Salesforce would want to buy it: Automation Anywhere already has deep ties to Salesforce, beyond just the software integrations between the two. First off, Salesforce is already an investor in the hot startup, and led its $290 million Series B round in November. On top of that, Bill Patterson, Salesforce's executive VP of CRM applications, sits on Automation Anywhere's board.
Automation Anywhere's technology would complement, but not compete, with what Salesforce is already doing with its Einstein AI bots, said Valoir analyst Rebecca Wettemann. Also, Automation Anywhere has industry-specific automation capabilities, so it would complement Salesforce's current strategy in targeting sectors like finance, healthcare, and government.
Valuation: $10.2 billion
Why Salesforce would want to buy it: UiPath is one of the most popular RPA companies in the market right now, and has a sky-high valuation after a $225 million funding round in June. With all of the new funding coming in, investors will likely be looking for an exit soon, either by public offering or acquisition, Valoir's Rebecca Wettemann said. UiPath is also already a Salesforce partner, with integrations between their two products.
UiPath had a rocky 2019, when the company was forced to cut 400 jobs, around the same time its well-regarded CFO Marie Myers left the company. As of its new funding round, however, UiPath appears to be back on track. CEO Daniel Dines recently told Business Insider the startup is eyeing an IPO in early 2021. UiPath has raised $1.2 billion from investors, including Sequoia and Accel.
Market Cap: $9.21 billion
Why Salesforce would want to buy it: Pegasystems makes tools for customer engagement and has a platform for business process automation and custom apps. Pegasystems is somewhat of a competitor to Salesforce because it also provides customer relationship management software. As a public company that's been around for over 35 years, it may not necessarily be looking to be acquired, some analysts note — but the fact that it is a leader in the RPA market and has a focus on CRM software could be attractive to Salesforce.
Pegasystems and Salesforce do have some "competitive overlap" but it would enable Salesforce to expand its portfolio, said Futurum Research analyst Dan Newman. Like Salesforce, Pegasystems also focuses on industry-specific solutions, selling products into specific market verticals like finance or manufacturing.
Market Cap: $1.25 billion GBP ($1.6 billion USD)
Why Salesforce would want to buy it: Blue Prism is considered to be the pioneer of robotic process automation technology. Its chief technology evangelist, Pat Geary, is credited with first coining the term "robotic process automation." It's a publicly traded company, based in the UK, with about 1,000 employees and over 1,500 customers around the world.
Although it was an early player in the space, it has fallen off the conversation radar, said Futurum Research's Newman, but that's exactly why it could be a target for Salesforce. A deal could help highlight Blue Prism's lead in the space, while also giving Salesforce credibility by adding a very established company. Dan Elman at Nucleus Research agreed and said the software as a service model that Blue Prism operates under would fit into Salesforce well.
Valuation: $400 million
Why Salesforce would want to buy it: WorkFusion creates intelligent process automation software that's powered by pre-trained bots, artificial intelligence technology and advanced analytics. WorkFusion "just sort of aligns with that Salesforce strategy of picking one of the leaders in the space and then buying out that established customer base and using it as a cross-sell opportunity," said Nucleus Research's Daniel Elman.
Its technology is often seen as competitive to Salesforce's Einstein AI bots, said Valoir's Rebecca Wettemann, but it does have pre-trained systems for financial service and insurance. "That would be attractive given Salesforce's industry solutions focus," she added, and definitely attractive to Salesforce's customers because of how simple the tools are to use.
Craig Le Clair, an analyst with Forrester and an RPA expert, also cited WorkFusion as a potential target for Salesforce, noting that the company has "a lot of depth in no document extraction and machine learning and text analytics."
"WorkFusion is a strong company," he said. "They'd also be getting a really good book of business as well."
Market Cap: $3.77 billion
Why Salesforce would want to buy it: Appian does more than just RPA, but that is just what could make it attractive to Salesforce, analysts said. Appian has an app development platform that helps users create apps without much code, automate mundane tasks for employees, and easily integrate with other business tools like Amazon Web Services, Salesforce, DocuSign and the like.
While Appian is not a big Salesforce partner, and doesn't have an app on the Salesforce AppExchange app store, a lot of customers use the two together, said Valoir's Rebecca Wettemann. "Appian has a lot of interesting industry-specific capabilities that would be attractive beyond RPA that accelerate time to value to customers and play into Salesforce's industry solutions capabilities," she said.
Similar to Salesforce, Appian also has an emphasis on company culture and social responsibility, which would make it a good fit in that sense as well, Wettemann said.
Valuation: Before their merger, Apttus was valued at $1.86 billion Conga at $715 million for Conga, but their combined valuation is currently unknown.
Why Salesforce would want to buy it: Startups Apttus and Conga recently merged. Apttus makes software to help sales people generate quotes for potential deals, while Conga makes software to draft sales contracts. While Conga hasn't marketed itself as an RPA company, its overall set of tools includes the relevant technology.
Notably, not only does the combined company already partner with Salesforce for product integrations — Salesforce Ventures as an investor in each of the two companies even before the merger. Salesforce buying it up, it would get not only the Apttus-Conga RPA tools, but also its specific products for salespeople.
Valuation: PitchBook does not list venture capital investors or a valuation for Digitech Systems.
Why Salesforce would want to buy it: Digitech Systems primarily provides enterprise content management software, helping customers manage all of their documents, photos, and other information. Over the years, however, its product has grown to include RPA capabilities, to help share that information across other apps and services.
The main thing Salesforce could find attractive about the company is its partner ecosystem, said Valoir's Rebecca Wettemann. "They have intelligent automation, they have industry capabilities, but because they sell largely through partners, they have a partner ecosystem that's already implementing their capabilities, so could be a way for Salesforce to build out more implementation partners as well," she said.
Valuation: $132.3 million
Why Salesforce would want to buy it: Kryon, which was founded in 2008, is based in Tel Aviv and New York. Analyst firm Gartner has praised its robotic processing technology's "strong capabilities around process/task discovery...based on captured keystrokes, mouse clicks, data inputs and outputs of business users."
Kryon also has been named among the top RPA companies by IT Central Station, the professional IT review site. Forrester analyst Craig Le Clair said Kryon could be a good fit for Salesforce given the software giant's more customer-facing orientation and its heavy focus on customer support and services.
Valuation: PitchBook says that Antworks has raised $25 million in funding to date, but did not list a valuation.
Why Salesforce would buy it: Antworks, a Singapore-based AI and automation company, has been attracting attention for its "intelligent automation software" used for extracting data and insights from documents.
Craig Le Clair of Forrester said the company has "some really some good analytics around email management and combining with bots and so forth."