4 Predictions About Open Source RPA Tools in 2024

RPA is one of the top technologies enabling enterprise digital transformation, and its potential economic impact is expected to reach $5-$7 Trillion by 2025. With more businesses shifting their focus on open source solutions to achieve better transparency and avoid licensing fees, open source RPA tools are expected to play a bigger role in shaping the RPA market.

In this article, we explore 4 data-driven predictions about open source solutions, and how they may change the momentum and future of the RPA ecosystem.

1. Open source does not yet have the momentum to shape RPA

When we look at several famous cases of open source success, we see that for-profit corporations leveraged open source software to their advantage. Either the open source project was launched by a for-profit corporation (Android, Chromium) or for-profit corporation(s) embraced the open source software as it allowed them a competitive advantage against competitors (Linux, WordPress). Neither of these are yet the case in RPA.

In the modern software world, all 4 major cases of open source success relied on for-profit corporations:

Successful open source software that benefited from for-profit companies making it part of their offering:

1. Linux: Without vendors like Redhat, acquired by IBM in 2018 for 34B, Linux ecosystem would have been much different today. Though Linux was not started by a for-profit company, its growth heavily relied enterprise software vendors. This was a win-win situation. These vendors could access a competent server operating system for free so they could reduce total cost of ownership for their enterprise customers and still make healthy profits offering support services. Linux ecosystem also benefited as these vendors contributed to the software.
2. WordPress: WordPress, the content management software powering ~30% of the web, is commercialized by numerous companies. The most prominent company commercializing WordPress is Automattic, founded by the founders of WordPress. Automattic was valued at >3bn in 2019.

Successful open source software started by for-profit companies:

3. Android: Google started Android to break Apple’s hegemony over mobile operating systems and protect its mobile advertising business. The fastest way for Android to gain traction was to make it open source and freely available so device manufacturers would have all the incentive to use it. And that’s what Google did and Android became one of the most successful recent open source projects, dominating majority of the mobile OS market.
4. xChromium (the code on which Google Chrome is based): Almost the same story for Android but this time Google’s aim was to break Microsoft’s hold on the browser market.

However, we do not see such open source projects embraced by major corporations in the RPA space yet. This could change if RPA implementation companies found an open source solution as strong as the existing closed source solutions. If such a strong open source RPA software existed, they could support it and offer it to their customers. This would reduce total cost of ownership for their customers and therefore increase their addressable market.

2. Future of RPA is likely to involve more open source

As technologies like operating systems matured, open source adoption increased. For example, the smartphone OS market which got kick started by Apple’s proprietary iOS is now dominated by Android in terms of number of users.

There are a few driving factors to increasing open source adoption as solutions mature. As solutions mature,

• Core functionality becomes clear and in most cases, it becomes easier to replicate. As s a software component matures, it becomes easier to build it from scratch using modern tools
• Solutions need to rely more on outside developers for components to cover the needs of specific customer segments. Both customers and component developers don’t want to get locked into a proprietary system and support open source efforts as technologies mature.

We see this trend already happening in RPA as well.

3. Current RPA leaders face an innovators dilemma

As new solutions offer core functionality at a cheaper price and as open source solutions appear, current leaders will have a hard time adapting. They need to reduce their prices but this would hurt their revenues as any discounts to win new business also leads to discounts for the installed base. So over time, leaders will likely lose their dominant position as new companies capture new business.

Business history has numerous such examples:

• Salesforce offered a simple, affordable CRM for SMEs. They even staged publicity stunts protesting against software complexity targeting dominant CRM brands like Siebel. At that time, Siebel, the dominant CRM of the 90s and early 2000s, focused on enterprise and kept its product complexity and pricing high aiming to keep the profitable enterprise market. However, over time Salesforce consolidated its hold on SMEs and built more functionality on its modern platform gradually taking enterprise customers, too.
• 20 years down the line, Salesforce faces the same dilemma as CRM startups like PipeDrive offer a cheaper and simpler solution are raising significant (e.g. $60M in case of Pipedrive) funding.

4. Open source RPA will benefit from the growth in the RPA ecosystem

While RPA was a standalone solution until a few years ago, now there is a wide range of companies such as process mining and AI vendors that are crucial for RPA deployments. For example:

• Process mining vendors enable companies to easily identify automation opportunities
• No code AI tools enable companies to build flexible AI solutions quickly, with limited effort

RPA giants like UiPath and Automation Anywhere are facing a dilemma because they are investing in these adjacent areas while also investing in marketplaces to attract adjacent solutions on their software. This is difficult to sustain as it leads them to either:

• Try to sell their adjacent solutions aggressively with users failing to take full advantage of the best solutions on the market for their specific situation
• Try to boost the marketplace at the expense of their own adjacent solutions leading to lost revenue opportunities for their business

Open source RPA solutions will likely focus on providing RPA functionality and will be easy-to-integrate to other adjacent solutions in the market, avoiding this dilemma. Therefore we believe that future of RPA includes open source and improved integration capabilities.

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