The fast-growing robotic process automation (RPA) software market received a painful reality check today, when UiPath's stock fell roughly 25 percent. Moreover, UiPath shares ($PATH) are now down nearly 70 percent over the past year.
Amid that backdrop, UiPath has hired Microsoft veteran Chris Weber as chief business officer. Weber will oversee UiPath’s go-to-market strategy — including its partner organization.
Weber previously was VP of Microsoft's corporate and SMB commercial team. Now, you can essentially consider him UiPath's new channel chief.
UiPath: Can New Channel Chief, Partners Re-Accelerate Revenue Growth Rate?
Among the challenges facing Weber as he arrives at UiPath: Slowing growth and a lack of profits -- despite the fact that global systems integrators and enterprise customers seem extremely pleased with RPA software deployments.
UiPath during an earnings call on March 30, 2022, praised growing relationships with multiple global systems integrators. The company ended the quarter with 5,100 partners -- including names like Ingram Micro, Deloitte, Finastra and ISID, according to UiPath executives.
During the earnings call, UiPath CEO Daniel Dines asserted:
"In terms of partners, we are seeing solid growth across all the segments. But obviously, the ones that bring us the most significant business are the global systems integrators. Accenture, for instance, it's becoming one of our largest partners. The investment that we made in the relationship is paying off. Also, PwC is one of our largest customers and partners. We are driving a lot of business with them and as an anecdote, they recently announced that they are terminating their relationship with Blue Prism. So, they basically are focusing on us as their automation partner."
Still, UiPath's growth rate is slowing. The quick math looks like this:
- UiPath’s revenue was $289.7 million in Q4 of fiscal 2022, up 39 percent from Q4 of fiscal 2021.
- Also, UiPath announced a net loss of $63.1 million for the quarter, compared to a $26.2 million net profit in Q4 of fiscal 2021.
The results beat Wall Street's expectations, but analysts apparently were not impressed with UiPath's growth forecast for upcoming quarters. For the full fiscal year of 2023, the company expects annual revenue of of $1.075 billion to $1.085 billion -- which represents slowing growth from $892.3 million in fiscal 2022.
This is the automation software market's second industry warning in recent weeks. A somewhat related warning came when Hyperscience laid off 100 employees in early March 2022.
RPA Software: Market Forecast
Despite the market growing pains, the overall automation software market appears strong and growth in the RPA software segment also appears strong -- at least in terms of overall market forecasts.
Indeed, the global robotic process automation market is expected to reach $10.7 billion by 2027, expanding at a CAGR (compound annual growth rate) of 33.6% from 2020 to 2027, according to Grand View Research Inc.
Amid the RPA market growth, multiple companies are acquiring RPA software providers and associated RPA consulting skills.
Key enterprise-focused RPA software companies include Automation Anywhere, Blue Prism, Microsoft Power Automate, Salesforce, ServiceNow and UiPath, among others.
Even IBM is jumping into the action, as part of IBM CEO Arvind Krishna’s M&A effort to pivot the enterprise technology provider toward multi-cloud software that drives business automation.
RPA Software: MSP Opportunities
Meanwhile, startups such as Rewst and ElectroNeek want to bring the power of RPA into the MSP sector.
Among the latest moves: Rewst hired ConnectWise and Perch Security veteran Wes Spencer as president in February 2022. Earlier, Rewst raised $3.5 million from Florida Funders in November 2021. Also, ElectroNeek in mid-29021 raised $20 million in Series A funding.
Elsewhere, Ingram Micro agreed to distribute UiPath’s RPA software worldwide, the two technology companies confirmed in May 2021.
Those milestones suggest automation software is catching on with MSPs. But those job cuts over at Hyperscience and slowing growth at UiPath offer timely reminders about business resets — especially as Wall Street and Venture Capitalists carefully with valuations worldwide…
Disclosure: ChannelE2E Editorial Director Joe Panettieri is a member of Florida Funders.
