The Blue Prism StoryFirst off, the stock was brought to the board by Ethan1234 with help from GauchoChris and PolekoCowboy. Can never thank our contributors enough. "The Blue Prism Story" is an attempt to help us better understand who the people are behind this company, how they got here and where they plan to go...Here's Ethan's post which gives a good overview - Blue Prism – A New Positionhttps://boards.fool.com/blue-prism-a-new-position-34561074.a...Blue Prism is a UK based SaaS company that pioneered the robotic process automation (RPA) category. They were founded in 2001 and went public in 2016 in the UK on the London AIM exchange and currently have prior 12 months revenue of $129.1m with around 1000 employees. RPA promises huge time savings and ROI as it frees up humans from menial tasks. RPA has recently become much more useful with the advent of machine learning and simple AI which allows for many more use cases. Their customer list is impressive and includes many of the worlds largest companies including Microsoft, Google, Daimler-Benz, Siemens, Dupont, IBM, the big 4 accounting and consulting firms, and 1800+ more… I would just add, from - The Blue Prism Wikipedia Page – https://en.wikipedia.org/wiki/Blue_PrismIn 2016, Blue Prism received one of the top honors at the AIconics Awards, named as The Best Enterprise Application of AI. In 2017, the company was named one of MIT Tech Review's 50 Smartest Companies and was the winner of the UK Tech Awards.This is a very highly regarded company within the industry.I rec reading through that thread linked above, but here’s the TL/DR version: Saul expresses enthusiasm for the company’s growth, other posters buy shares and techie, RafesUserName expresses concern about Blue Prism’s UI.*** *** Of note, The Blue Prism Story is really more of a character study than the riveting...Tales of CrowdStrikehttps://boards.fool.com/tales-of-crowdstrike-34449490.aspxOkay, onto business ...*** ***The company was founded in 2001 by Alistair Bathgate, who takes the CEO role and David Moss, who takes the CTO role…Here’s an interview from January 2018 with Bathgate… Businesss Interview: Don’t fear the march of the robots, says boss of City tech darling Blue Prism https://www.standard.co.uk/business/business-interview-don-t...The son of an architect who helped rebuild Manchester after a terrorist bombing and a journalist, Bathgate got an MBA from Leeds University and worked in tech… In 1997, he took a job as a project manager at software firm Lynx Financial Systems in the “glory days” as businesses became fully computerised. He hit on the idea for Blue Prism while helping to centralise Barclays’ call centre (“prior to that, believe it or not, if you went overdrawn on your current account, it was your branch manager who would call you up”). At the end of the project, the bank asked for assistance in helping its overworked IT bods and an idea for an automated workforce was born.Bathgate readily admits he’s no techie and decided to form the business with co-founder Dave Moss, who still handles the ones and zeros.He valued their independence and eventually IPO'd in part to keep that independence without relying too heavily on VC money.*** *** Somewhat interestingly, from 2007-2014, Bathgate kept a blog detailing his immense passion for wine…Confessions of a Winohttps://www.alastairbathgate.com/Confessions of a Wino is written by Alastair Bathgate, a totally amateur wine enthusiast whose waistline also reveals a love of decent food.Reading through the blog, Bathgate comes off as funny, likable and incredibly passionate about wine. I like to see a happy leader who enjoys life and has a self-deprecating sense of humor.*** ***Blue Prism has had two major phases – a long phase developing the technology, business and culture that ends with a 2016 IPO and ushers in an era more committed to hyper-growth and realizing the company's business potential. Here's an article on how well the IPO went for workers, written two years after ... Robot firm churns out MILLIONAIRES: Blue Prism boss shares £100m with more than 70 of his staff (August 11, 2018)https://www.thisismoney.co.uk/money/markets/article-6050937/...More than 70 staff at a robotics company will share a near-£100million bonus bonanza after a stunning stock market run triggered Silicon Valley-style rewards.He still has a 7 per cent stake worth £90million but avoids the trappings of success. Although he is sitting on a £120million personal fortune that should propel him into the rich lists next year, he lives in a £300,000 house he has owned since 2001.In short, when the money was down, Bathgate took care of his people. As for staying in the same house, despite making a fortune, this warms the heart of all Warren Buffet-loving Fools.He seems like not only a legitimately decent man but one who fully understands the societal implications of building a digital workforce, is committed to educating people about the idea that these “digital workers” are not here to replace humans but to free us up to do more creative, interesting, meaningful work. *** ***In January of 2019 the company raised some money … Blue Prism to issue $130M in stock to raise new fundshttps://techcrunch.com/2019/01/24/blue-prism-to-issue-130m-i...At that time the company had just reported mounting losses and the company was facing rising skepticism from the Street…CEO Alastair Bathgate attempted to put the announcement in the best possible light. “The outcome of this placing, which builds on another year of significant progress for the company, highlights the meteoric growth opportunity with RPA and intelligent automation,” he said in a statement.But they laid out their plans clearly and these plans were featured in a Tech Crunch article…Blue Prism looks to partners to expand robotic process automation with AIhttps://techcrunch.com/2019/01/24/blue-prism-looks-to-partne...Dave Moss, company co-founder and CTO, sees a world in which companies are looking to digitization to stave off growing competition. Big insurance companies, financial services and other workflow-intensive organizations need to look beyond the automation capabilities his company has given them, and that is going to require an intelligence layer.So that’s co-founder and CTO Dave Moss still with the company. You love to see not only founder-led companies but several founders staying together for long periods of time. I mentioned this before but worth repeating - in Shane Parrish’s popular Farnam Street blog he’s highlighted “Relationship equity” – the advantages you get from working with the same people over long periods of time. Again, doesn’t show up in a quantifiable metric but it counts. They use the money to create the Blue Prism Digital Exchange Marketplace… The Exchange gives partners and customers the ability to create and share tools to enhance Blue Prism. To encourage those entities to add AI capabilities, the company also announced a new AI engine for building connectors to advanced AI tools from Amazon, Google, IBM and other AI platforms.And Blue Prism Labs which seeks …ways to inject its RPA products with artificial intelligence. This could lead to more sophisticated automated workflows down the road, such as using image recognition technology to add metadata about a photo automatically.We’ll talk more about the company’s successful work with lab development below.The company also uses the money to make an acquisition…*** ***Blue Prism acquires UK’s Thoughtonomy for up to $100M to expand its PRA platform with more AI (June 19, 2019)https://techcrunch.com/2019/06/18/blue-prism-acquires-uks-th...Thoughtonomy has built a cloud-based AI engine that delivers RPA-based solutions on a SaaS framework. Ethan1234 talked about this in his initial write-up, but here’s a quote that stood out for me as our resident Narrative Investor … “We’ve had approaches on a daily basis since the intelligent automation market has exploded,” said Terry Walby, CEO and founder of Thoughtonomy, in an interview, “but getting the best outcome for the company and our customers is not just about taking money and headlines [touting] our valuation.”This quote seems authentic in that Walby sold to Blue Prism because he believed his tech would contribute to something legit and not torch his life’s work. Thoughtonomy was re-branded as Blue Prism Cloud, which Walby still runs…C-Suite Spotlight: Blue Prism’s Terry Walbyhttps://www.rpatoday.net/featuredarticles/c-suite-spotlight-...“We started to talk to the markets about different kinds of investment but when Blue Prism approached us, we saw this presented numerous advantages for all stakeholders. We had been collaborating with Blue Prism for some time and they proposed combining the businesses. Although it really wasn’t the direction we were planning, we recognized that a collaboration with Blue Prism offered instant access to all the things we would do if we had taken growth capital: offices around the world, a huge end-user sales force, a brand that had great equity and customer loyalty, a resilient product, the ability to let our product develop with the help of the Blue Prism team, and the financial resources to invest in realizing our dream. It became increasingly an obvious alignment and the obvious thing to do.”And as for our wine-drinking pal, Alistair Bathgate, all things must pass … *** ***Blue Prism Founder Steps Down as CEO (April 21, 2020)https://www.businesscloud.co.uk/news/blue-prism-ceo-steps-do...“Whilst, after 18 extremely enjoyable years, I am sad to be stepping out of an executive role, I remain a fervent supporter and major shareholder of Blue Prism and will be cheering from the sidelines, as well as being available to advise and assist where needed,” said Bathgate.Seems legitimately heartfelt and backed by hard evidence of keeping his shares. Also it makes perfect sense that after 18 years building up the company from nothing he might not love managing a global company with over 1000 employees and the demands of answering to the Street. His note is a heck of a lot warmer than Dmitry Alperovitch's was from CrowdStrike - who all but sent George Kurtz a flatus. And this brings us to the current Blue Prism CEO as … *** ***JASON KINGDON TAKES OVERTo be clear, he moves from Chairman of Board since 2007 into the CEO's role. Note this is very recent news. Here’s his bio from the Blue Prism site…Blue Prism – Who We Arehttps://www.blueprism.com/who-we-are/team/Jason Kingdon has been commercializing AI for over 25 years. He has a PhD from UCL (University College London), Computer Science, he co-founded UCL's Intelligent Systems Lab in 1992 and pioneered one of the world’s first neural nets for live financial forecasting. He was CEO and co-founder of Searchspace, an inventor of big data analytics, introducing intelligent transaction monitoring to the London Stock Exchange, New York Stock Exchange, Lloyds of London amongst others. After a highly successful exit he set-up a private AI research lab being commercialized as glass.ai. He joined Blue Prism as Executive Chairman in 2008 and later non-executive Chair on the company's highly successfully London IPO. He's an EY entrepreneur of the year, author and editor of AI books, papers and patents.Let's dig into this a bit... UCL Computer Sciencehttps://www.ucl.ac.uk/computer-science/According to its site, University College London is the 10th ranked university in the world and it seems to have a thriving Computer Science program, with a lab that’s spun out several companies, most notably one called DeepMind, a company that was acquired by Google in 2014. The company generated headlines for creating a program, AlphaGo that beat the human world Go champion. It’s hard to say how active Kingdon’s initial lab is now but it likely evolved into the current program with a different name. Point being the man – who radiates a compelling presence like the great actor, James Mason - has been at this for many years. More from his resume… He was CEO and co-founder of Searchspace, an inventor of big data analytics, introducing intelligent transaction monitoring to the London Stock Exchange, New York Stock Exchange, Lloyds of London amongst othersLet that sink in for a second. How world-class does software have to be to monitor transactions for these exchanges? Consider the speed, volume and stakes. In an interview I’ll link below, Kingdon says, “We created Intelligent Transaction Monitoring Systems, which to this day are the global standard for money laundering and terrorist finance detection within the top-tier banks.”About the “highly successful” exit he refers to for Searchspace - the company was acquired by the private equity firm, Warburg Pincus, which combined it with another company to form a company called Fortent. Here’s an article…Searchspace Acquired (June 29, 2006)https://www.finextra.com/newsarticle/15516/searchspace-and-s...These lines stand out… Mimi Strouse, a Warburg Pincus managing director will be Fortent's chairman of the board. She says the firm settled on Searchspace as the launch pad for the new enterprise after researching over 180 vendors in the compliance-risk industry.In business like sports, past success is a strong indicator of future success. Kingdon’s company beat out 180 vendors. And whatever one thinks of the ethical character of multibillion-dollar PE firms, they are not stupid. Here’s a look at Kingdon’s other company Glass.Ai … Glass.Aihttps://www.glass.ai/We have developed Artificial Intelligence technology that understands language at scale – reading millions of websites, news, social media and other sources to digitally map the world’s economy.Dang. The man is not ****ing around. Below are two interviews I found with Kingdon. Suffice it to say, this bloke is NOT CrowdStrike’s George Kurtz or The Trade Desk’s Jeff Green. Those two polished execs are evangelicals constantly in the media and speaking at industry events. Kingdon clearly is busy building products and companies. I could find very little on him. Commercialising RPA - Blue Prism Chairman on "a technology that got invented in the UK - and no-one even noticed" (October 29, 2019)https://diginomica.com/commercialising-rpa-blue-prism-chairm...I highly rec reading this article. Some things that stand out… Kingdon joined the company in 2007 because, I thought they solved automation in such an elegant, light way, there's a real genius to it. They were looking through the telescope the right way, taking the user interface seriously and repurposing it as a machine interface. Focusing on the interface meant that you could theoretically connect it to everything from a Babbage machine to an Oracle system, or to something that hasn't even been released yet.I like this quote. You can feel both the passion and the intellect. Again, some stories take a long time to develop and others need very little. That Blue Prism has put 20 years into getting this right is a big plus. More from the article… So what next for Blue Prism as it moves into what Kingdon calls ‘phase two’ of its story – We're trying to build a digital worker. I don't think there's anything more ambitious than that, with all its implications: how they work in teams, how they share. They can figure out issues with third party-applications themselves, avoid dead spots and areas that are running badly. They can self-optimise against the workload and what they need to do. That's the stuff we’re trying to build. That sounds more menacing to humanity than it is – Kingdon, like Bathgate before him, is well aware of the media’s understandable discomfort with the concept of a “digital worker.”This next article is also a must-read for investors… Jason Kingdon, Chairman and CEO at Blue Prism – Interview Series. (May 8, 2020)https://www.unite.ai/jason-kingdon-chairman-and-ceo-at-blue-...Of note on his vision … As Chairman and CEO, I’m now shaping and evolving our product roadmap that takes RPA into the AI era – while working tirelessly to promote the vision of a Digital Workforce for every enterprise. In my vision for the future, businesses will have a new organizational structure – one-third human employees, one-third Digital Workers, and one-third core IT. Human workers will continue to provide strategy and creative thinking, Digital Workers will execute on business processes, and core IT will provide the underlying technology infrastructure and data storage.In this interview he goes deep into Blue Prism’s competitive advantages and talks about the Blue Prism Digital Exchange Ethan1234 discussed in his post. The Blue Prism Digital Exchange (DX) is a ground-breaking intelligent automation “app store” and online community that offers an open ecosystem for intelligent automation capabilities. The Blue Prism DX offers connections to all transformative technologies which are simply dragged and dropped into process flows to be used for the continual testing, advancing, sharing and deployment of new automated innovations.Lastly, here’s a link to the Blue Prism site… Blue Prism – A Digital Workforce for Every Enterprisehttps://www.blueprism.com/The home page says they have 1,800+ customers, 90% avg customer satisfaction rate and 98% customer retention which I guess implies even some unsatisfied customers are sticking around. If you dig around the site you’ll find an interview (sorry I can’t relocate it) with the CEO of a company called Adaptation, which helps companies incorporate digital workers. This is clearly not a simple thing as human workers are obviously unnerved by term “digital worker.” And it must be done right. Again, as I’m interested in the intangibles, I found this interview very measured, transparent and direct about challenges and implications of this company.SUMMING IT ALL UPIt seems like what we have here is a dedicated, passionate company that is at the forefront of a revolution in how companies are designed – one third humans, one third humans monitoring digital workforce and one third digital work force. They have clearly taken the time to get the foundation right and now seemed poised to go out and conquer – or attempt to conquer – the world. And they are led by a legit heavy - heavy - hitter. I personally do not begin to even remotely understand the technology – my mind utterly stumbles on the notion of Artificial Intelligence and what exactly makes a piece of software a “digital worker.” But I trust that they sure do. The company is well aware of the fact that it does not get the recognition it deserves and if the glass is half full, we can say this is an opportunity and part of the reason the stock price seems relatively low. If the glass is half empty, we can say these are mature, decent, intelligent people who suck at marketing. Then again maybe the growth in customers speak for itself. There seems to be a very strong ecosystem in place for building products, keeping customers satisfied, innovating and expanding the offering. I’ve noticed the TAM for this one is all over the map. I don’t fully understand how much a modern enterprise can automate using this technology. It’s something I’m sure is discussed on the site by detailing use cases but I didn’t fully dig into that yet. I like to see some more sizzle in the marketing, storytelling but I also love maturity, authenticity and titanic intellects. And clearly as the company enters the 2nd part of its story, Kingdon can easily hire a marketing firm and improve in this area. I wonder if this is a very tough, expensive product to sell as you really need to do it right by getting proper buy-in from all involved, without stressing workers out that they're about to be replaced. I could see this generating pushback. But suspect incorporating Digital Workers may become a standard thing in time. That said, this story has a LONG way to go before it fully plays out. And that feels different than our other companies. Again with my darling CRWD, it's just easy to see how companies race to add that because all good stories have both stakes and urgency. It concerns me that one of our board’s techies, Rafe was unimpressed with the software but that’s anecdotal – clearly the growing customer list and retention rates suggest many are happy with it. Still I prefer to see our board's techies crying out in awe like Sally's faking a moment of ecstasy in the famous deli scene from When Harry Met Sally.Lastly, of the three top companies - Blue Prism, uiPath and Automation Anywhere - Blue Prism has the coolest name. I couldn't find anything on reason for the name. Maybe it's obvious to others here but my first thought is bong hits and staring at the Dark Side of the Moon album cover. "The lunatic... is on the grass..." BOTTOM LINEI think we have a good sense of who these guys are, what they’ve done and plan to do. I took a starter position to get in the game. It's easy to see how this company grows considerably in the coming years and may blow away expectations with increasing adoption and innovation. And while I never like to see our companies get acquired you get the feeling there are many big fish – most notably Google – who could take this thing out in a second. And beyond the value of possible $ gains, this is a fun one to study. They are ate the forefront of how workplaces may change and integrate technology. My first reaction to be honest was fearful at thought of robot software, but Blue Prism gives me a shot of optimism in that this stuff is being created by people who seem to possess righteous, empathic souls. Fool On,Broadway DanPS Found this from Gartner at last minute ... https://www.uipath.com/lp/company/rpa-analyst-reports/gartne...Which has BP second to uiPath but very clearly an industry leader.
Entertaining and illuminating as always, Dan. I want to highlight a really good point you made:I wonder if this is a very tough, expensive product to sell as you really need to do it right by getting proper buy-in from all involved, without stressing workers out that they're about to be replaced. I could see this generating pushback. But suspect incorporating Digital Workers may become a standard thing in time. That said, this story has a LONG way to go before it fully plays out. And that feels different than our other companies.We've benefited greatly from companies like Crowdstrike and Alteryx where there's not a lot of friction in buying their products -- which makes for a short sales cycle. Definitely plenty to be interested in here with Prism, but their revenue has grown off a very small base. That makes me think the slow down could be severe, with the possibly low TAM and this idea that there could be a longer sales cycle. I'm curious if any PRSM buyers here agree that this is a concern, or can explain why it isn't. Thanks in advance.Another question: Any theories on why the stock price has been cut in half in the last couple years? Could be any number of things, of course, but I'd love to have a theory at least.Bear
As the board's resident simplicity and marketing/cool factor fan...The product is hard to understand. And I'm always anti-complexity. And I really don't think these guys have marketing in their DNA. Look at Kurtz/Green - these guys are traveling the world, keynoting conferences, making YouTube videos, getting interviewed regularly and constantly laying out the vision. Recently Jeff Green had one of those fireside chats with a big firm (forget which) and all the analysts walked out and raised estimates. I see a lot of complexity here in detailing for investors exactly what it is, how it will work and just how big the market is for it. Wonder if this had anything to do with Bathgate's departure? So bottom line - my speculation is the company lacks marketing sizzle/clear narrative to inspire investors and has long way to go to educate investing community/buyers. Elon Musk doodles a truck and Telsa's stock price doubles. To be honest, in the euphoria of us killing it I fear I am guilty of failing to meet my own criteria here - keep it simple stupid. But maybe Ethan1234 can help us flesh out the TAM.
Thank you BroadwayDan for the writeup.I will add my litle bit here. Perhaps it is annecdotal in nature.Last semester I taught a Robotics course. Because it was taught online and we didn't have access to the physical robots, we did some programming with Robotic Process Autmation. We used Quriobot to create a chatbot, and we used Voiceflow to program an Alexa app.I think BP does much more complex things, but I don't think there will be any pushback about digital workers. We are already used to the basic forms, and when they are done right the utility outways anything. Especially when the alternative is waiting for a real human for 30 minutes to answer a simple question.I also note that there is a large movement to incorporate human qualities into these processes. I will look for the articles, but many companies are finding much higher engagement and ROI when the bots "have a personality." I think it is a great field with a large TAM.
The founder/CEO of UiPath (terrible name) is extremely popular, charismatic and hyper-aggressive. Personally, he's not my cup of team though he repeatedly tells origin story of how he had little money in Romania and no compute rand learned coding just by reading a book. He's frequently in the media and does a UiPath Conference. He seems intensely dedicated to keeping things simple. And there's no doubt the rivalry between UiPath (NY/Romania HQ), Automation Anywhere (Silicon Valley HQ) and Blue Prism (London HQ) is intense. Found an article where Dines' was mocked by his rivals for grossly overstating how prevalent RPA might become. So he's kind of the George Kurtz of RPA. Very different man than Blue Prism current CEO Jason Kingdon. Blue Prism is not the top dog and seems like might even be in 3rd slot. UiPath is going to IPO and one has to assume generate a lot more buzz and raise some serious money to expand. Found this Tedx talk from Blue Prism CTO, David Moss. Holy moly... zzzzzzzz. Real snoozefest. https://www.youtube.com/watch?v=1SximAg9t4wIf you put Daniel Dines into YouTube you see the guy everywhere. So again, seems we have a complex/developing industry, Blue Prism is not top dog and the top dog has a very motivated, charismatic figure sucking up oxygen and pushing the narrative envelope. I also read that Microsoft and others coming into the space, which is a positive in my book because it means they smell money here. Again, Blue Prism seems like it has an unusually high chance of being acquired.
is RPA used to control physical robots?I thought RPA is to automated digital processes in the entreprise. Things like chatbots and process logon etc...I still don't really get the hype about RPA which is another one of those marketing terms used to push some businesses.tj
Is RPA used to control physical robots?The way I understand it, and I am really not an expert, is that the process is not a physical robot, but the programming is similar. You use loops, conditionals, variables, etc., just like programmung a robot. But the output of the RPA is not to move a limb like a robot. Instead, it is used to capture data and supply desired information.Where it gets interesting is that all of the data these RPA are collecting can be used as the foundation for AI analysis and response in later iterations.It is kind of like Tesla gathering data on roads with their cars. As they get more data, the car can become better at autonomus driving. Now, they recognize many things that they couldn't before.
Blue Prism uses C#, and can't be deployed on Mac.I don't see how this company can be successful on C#. What is the last company that pulled this off? Developers predominantly use Mac.Perhaps they want to focus on the Windows market, which is huge, but it also never works out long term. Eventually, the market leader gets into the space, and the C# incumbent gets creamed.There's a ton of potential in RPA, and this company is cheap. But I think their best bet is to get acquired by Microsoft, and then eventually lose in the long run. Just like Dynamics and Salesforce.
Blue Prism uses C#, and can't be deployed on Mac.I don't see how this company can be successful on C#. What is the last company that pulled this off? Developers predominantly use Mac.Ok, as a non techie, I have no idea what C# is, but looking at their latest earnings slides, among their 1,800+ customers, its a who's who of big time companies - Coca Cola, Amazon, Pfizer, Best Buy, P&G, Ebay, and on and on. It doesnt seem to be inhibiting Blue Prism from acquiring, retaining, and expanding their client base. Any slowdown or delay in new lands is due to Covid-19.Best,Matt
Blue Prism uses C#, and can't be deployed on Mac.I'm not sure what you mean here. I've used C# on my mac for an app that supported it. Mono is open-source and cross-platform .Net (https://www.mono-project.com). C# is great! I wouldn't want to hear a company I invest in only offer that one language though. That would be weird considering it is a .Net language too.What is the last company that pulled this off?UnityEngine for game development is one I know of. ...but they support multiple .Net based languages (C# IS the best they support though IMO)
I don't see how this company can be successful on C#. What is the last company that pulled this off? Developers predominantly use Mac.Huh? C# is available on Mac. And what developers are you speaking of? I know lots of developers on Windows and Linux and almost none on Mac except those developing specifically for the Mac.
I have to agree that the stock is going to be hamstrung in a big way because of the marketing/presentation of Blue Prism. I think they need to replace their CMO pronto!Just look at their logo and website...it may seem superficial but I think its indicative of how they will struggle to bring in the serious dollars to move the stock.
Google: "Blue Prism on Mac". Macs don't support a .Net framework, this application is for Windows shops.The only time I hear about .Net or C# is when I fly out to Omaha and meet with old companies who are still figuring out what the cloud is. I wouldn't place my chips on any of the tech they're choosing.Siebel secured a lot of names like that with inferior tech back in the day. This strategy works until the better product gives those names the time of day. Like I said before, a lot of .Net shops chose Dynamics because they're developers favored .Net, and all those companies are with the better product (Salesforce) today.
Macs don't support a .Net frameworkhttps://dotnet.microsoft.com/downloadGiven that Windows has a *huge* dominance in market share in desktops and laptops I can't imagine where you get the idea that everything is on Mac.
Bear,I will take a guess. I think the stock price has gone done because spending has gone way up as they have increased employee count from 100 something to 1000 something in like 2-3 years. Additionally they got the money (140m pounds) from public markets to fund this growth. In addition there y/y revenue numbers were declining. I believe that is why the stock was cut in half.Contracted customers numbers2017 4772018 9922019 1677Does not seem like a slow sales cycle to me...but I really do not know. Just going off numbers.https://investors.blueprism.com/sites/blueprism-ir/files/Ann...According to company page 8, TAM is 10.2B for 2022.Management sees a real opportunity in upsetting current customer base. Think WIX. The measure each new cohort and each cohort spends more money with them over time.Anyway just started studying company few days ago, but I like what I have been reading.
Notes on their competition:There is a short article about the RPA industry segment mentioning the biggest players in the field: https://www.grandviewresearch.com/press-release/global-robot...UiPath is clearly the most successful of the pack with $400M revenues they moved from #5 in the market in 2017 to #1 since 2019.AutomationAnywhere ceeded some market share to UiPath but remain strong with estimated revenue of $250MBluePrism comes in 3rd with a revenue of $100M. It has been growing better than AutomationAnywhere but nowhere near the numbers that UiPath is posting. NICE comes in 4th and I honestly can't make heads or tails of their business. They've been founded in 1984 and their expertise seems to be in fraud detection. However, the products they seem to be pushing the most on their website are very non-descript generic RPA catch-all things, which I wouldn't trust.Others:It's important to note that a lot of big tech companies are already doing things that would be considered RPA on their own - Eg. Google has automated vetting of Youtube videos, GE has automated maintenance software on their medical devices etc. It's unclear to me whether these instances are considered to be part of the RPA market or not.Bottom line:BluePrism seems to be the only company you can use to directly invest in RPA. I'm not sure whether this is good or bad - it's an opportunity, but looking at their finances it seems to me they should still be in the hands of venture capitalists like UiPath.
We've benefited greatly from companies like Crowdstrike and Alteryx where there's not a lot of friction in buying their products -- which makes for a short sales cycle. Definitely plenty to be interested in here with Prism, but their revenue has grown off a very small base. That makes me think the slow down could be severe, with the possibly low TAM and this idea that there could be a longer sales cycle. I'm curious if any PRSM buyers here agree that this is a concern, or can explain why it isn't. Thanks in advance.Bear,I agree that the small revenue base might be a concern. A minor point is that the revenue is reported in British pounds so when converted to USD the numbers are about 25% higher. But yeah if growth slows when the base is only $150M then maybe the company can't get escape velocity. I think one needs to look at the big picture though. The company claims that the pandemic affected them. So if you can believe that then part of the deceleration can be viewed as temporary.CEO was replaced. I think there was a good reason behind that and new leadership may help this company get back on track.The RPA space is growing fast. If this growth (of the overall market) accelerates then there is opportunity for growth in the companies in the space. I believe this is true.Regarding sales friction, I don't know if it's true. But I would look to the expand as being highly successful (see slides 11-14 in the most recent investor presentation). If you look at the spending on Blue Prism of the customer cohorts you can see that expand is working just fine. Is the land difficult? That needs to be explored, but the expand is definitely in tact. When a company gets tremendous ROI on a project then they will look for other uses cases to implement. One thing that leads me to think that land is not that difficult is that the professional services revenue is only 2%. It is possible that the sales process contains friction (maybe or maybe not) but implementing can't be that difficult or else the professional services revenue would be a higher percentage of revenue.I think the Thoughtonomy acquisition is adding revenue growth benefit and I think it will likely produce synergies.So Blue Prism stumbled several years ago as they grew much slower than UiPath. CEO was replaced 3 months ago. I believe that the chance of this company getting back on track is very high. We are getting a very good price to make a bet on this.So back to your question of why the stock price dropped. There are several possible explanations. But given the price, are you looking a gift horse in the mouth? Or is it not a horse but a donkey? Or perhaps it's something between (a mule)? My small 3% allocation bet is that it's a horse.Chris
So back to your question of why the stock price dropped. There are several possible explanations. But given the price, are you looking a gift horse in the mouth? Or is it not a horse but a donkey? Or perhaps it's something between (a mule)? My small 3% allocation bet is that it's a horse.And remember that you are only paying for a mule for if it's a horse, you're getting a great deal.Chris
I haven't bought Blue Prism, but I do own APPN. I recall APPN purchased a RPA company in January 2020, and I looked back at some APPN stuff on RPA. APPN has a pretty good description about RPA here https://www.appian.com/platform/robotic-process-automation-r.... I think this confirms that many companies are in this market, but a few like Blue Prism (public) and UiPath (private) are the big pure plays. In their initial press release, APPN also mentions that they can help companies manage their RPA processes from major RPA vendors like Blue Prism and UiPath. https://www.appian.com/news/news-item/appian-acquires-roboti.... So, APPN clearly acknowledges them as one of two big leaders in the field. It also shows that some "competitors" like APPN also believe the market is big enough to be a complementary player to some of the leaders in the field. Mike
If PRSM is not the clear market leader, they would never get the same valuation as UiPath. It's still early days in the overall market but if UiPath does become the clear market leader they would be the gorilla and get the gorilla-like valuation and PRSM would be more like a chimpAs a similar but not exact analog you can see this in something like OKTA (p/s 35) vs PING (p/s 9)Either way I'm looking at the company and thank you for brining it. Very interesting
Just to highlight the stock volume on the US OTC exchange for BPRMF.Scanning back over the past year, prior to Ethan/Chris bringing it to the board and starting the discussion/analysis here on Mon, 7/13, the volume would typically be between 1000 and 10,000 shares/day with spikes toward 20K maybe once/week on average, and now and again up to maybe 40K on a random day.That all changed on July 10th (last Fri), when volume went up by an order of magnitude to 143,000 shares (Ethan? 😉), and has been above that since, to today, where it's already at 250,000 not even 2 hours into the trading day. Here's a table of the volume for the last 10 trading days for BPRMF. Date VolumeJul 16, 2020 251,250Jul 15, 2020 126,389Jul 14, 2020 124,440Jul 13, 2020 183,334Jul 10, 2020 143,490Jul 09, 2020 31,363Jul 08, 2020 24,588Jul 07, 2020 4,580Jul 06, 2020 5,548Jul 02, 2020 2,603That's a 100-fold increase! I assume this spike might also draw attention to this stock from some momentum traders that look for that kind of thing.The share price has bounced around during those 10 days, basically between $14 and $16, but not consistently up or down, for instance, up yesterday, down today (so far). Will be curious to see if volume stays high and if so, for how long. If this volume spike was caused by this board's members buying in to BPRMF, I would have thought the price would have mostly spiked up during this time, but not the case, so I'm not sure what to make of that. Maybe someone with more experience analyzing smaller companies and how they react to large trading volume increases may be able to shed some light on this. Maybe because the number of shares traded here are a small portion of the shares trading on the London exchange (PRSM)?Anyway, I thought it interesting, hopefully others do, too, if not just a warning that if you thought other stocks we hold can be volatile, Blue Prism may show us what real volatility can be. If you've bought in here, hopefully you have a strong stomach and risk tolerance, I could see this one moving 10% or more up or down every day.Disclosure: I have a 1-2% BPRMF position currently.
Date VolumeJul 16, 2020 251,250Jul 15, 2020 126,389Jul 14, 2020 124,440Jul 13, 2020 183,334Jul 10, 2020 143,490Jul 09, 2020 31,363Jul 08, 2020 24,588Jul 07, 2020 4,580Jul 06, 2020 5,548Jul 02, 2020 2,603
While the volume in the US has grown, the price leadership is on the LSE. Yesterday's upticks happened in London first and were followed here. The decline today started in London and was followed here.The company sold stock in May under duress of Covid19 at about $14/sh. That seems to put a floor under the stock price.Mike
BD,Nice post with lots of details. In my research, I came across the following article which links to a great many articles. https://www.fool.com/investing/2019/12/03/this-robotics-stoc...I did some online research. Here is a summary:1. BP was the founder of RPA in 2001 and coined the acronym RPA. 2. 2 competitors (UI Path and Automation Anywhere) were valued at $7B in 2019 vs only $1.4B for BP. UI is growing fast. Automation says they are the biggest and CRM did their Series B funding round in 10/19 where they were valued at $7B. UI had $360M rev. in 2019. Automation may be similar. 3. BP P/S in 9/18 was 40. So, it is not correct to say the company has not been discovered. The company was a 10 bagger at 1 point. Also, analysts have known about RPA. So, why did they not invest and maintain a high P/S? Since late 2018 stk has dropped, MF says valuation concerns. rev continued to grow though now P/S has dropped to 10. 4. Per MF overall mkt was $1.5B in 2018 projected to $2.9B in 2021. 5. In 10/19 UI laid off 100s of workers and CFO resigned. But this was considered company and not RPA specific issue. In the same month Automation did their Series B funding. Salesforce led the funding round. Shows the interest among the key players. Also, Appian (1/20), MSoft (5/20), IBM (7/20) have made acquisitions in the RPA field in 2020. Clearly, we can say UI had a hiccup and RPA is being considered a positive new field.6. BP is growing their customers. SAAS acquisition in 6/19 and getting some rev in latest Q. Last Q was impacted by covid but this half should be better as Europe recovered by May and has done well. 7. I found one -ve comment by a MF analyst in 11/19 (it is one of the lined articles in the above link)- He says "Blue Prism superb product, but not fully understood by wider market and has become tarred with the same brush as its more hyped rivals. technology growing pains and benefits not yet filtered to senior executives at companies whose support is needed before it’s scaled. Intelligent automation will become more important. When that happens, Blue Prism could be a big beneficiary. 8. This comment had me worried. Meaning the product is not selling like hotcakes. But BP has been growing fast. Plus all the positive acquisitions in this space see #5 above. Also, according to Gartner, hyper-automation, or the automation of tasks once performed by people, is the No. 1 trend in today's AI world. Enough said. All considered I took a 3% position today. Company reports in late Nov. Would have to see how much Covid has impacted them. They withdrew their guidance and said last half had a 15-20% drop in billings which would indicate a slow down in future rev. But Europe did recover faster.
https://seekingalpha.com/news/3589431-ibm-acquires-rpa-compa...Okay, I've been watching and I don't think anyone has brought up this news, nor this competitor?
Notes from their H12020 conference call (they report every 6 months):Numbers are in british pounds:Revenue 68.5M - up 70% YoYIncome (41.4M) - 20% worse YoYOperating Cash Flow (31.2M) - 68% worse YoYYikes, they are expending 160% of their revenue and leaking a lot of cash, but they have pledged to fix that in 2021:The Board is comfortable reaffirming its commitment to reach cash break even during 2021.Let's see where they're losing money:£m 1H20 1H19General & Administrative 13 12Professional services 14 8Sales & Marketing 56 45Research & Development 8 4Depreciation & amort. 3 -Share based payments 7 3Operating expenses 101 72The first thing that jumps at me is that their R&D budget seems really small. Not sure how a tech company is supposed to develop their product with just a couple million pounds per year. For comparison, OKTA has got twice the number of employees but spends 5 times as much on R&D. Or another look - while PRSM S&M budget is 7 times its R&D budget, OKTA S&M budget is 2 times its R&D budget. It's probably even worse in that I think what PRSM calls "Professional services" is simply included in OKTA's S&M for the most part.Cash and cash equivalents at the period end were £90.8m (30 April 2019: £129.4m). The Group holds a further £50.0m on deposit maturing within the next 12 months making its net cash and short-term investments position £140.8m.The Group raised gross proceeds of £100m (before expenses) via an equity issue, in new funding in April 2020 to provide significant balance sheet headroom in the event of prolonged disruptions relating to the COVID-19 pandemic, and to enable it respond to opportunities that may arise.This means they have enough cash for about 1,5 years of operation with the current performance, but hopefully their performance is going to get better.So their marketing costs have risen by 32% YoY, how did their customer base grow in the same period: 1H20 1H19 YoY growthClosing customers at period end 1,864 1,337 39%New customer wins 255 349 -26%Upsells during the period 635 496 28%This is pretty bad given the size of their S&M. They seem to be aware these results are not great and are talking about Covid-19 disruption throughout the document. They've even retracted their guidance because of it:In response to the immediate impact of COVID-19 on growth rates, the unprecedented nature of the disruptions and the unknown timescales the Board withdrew guidance from the market in April 2020.So maybe their performance has been hindered by the situation that's out of their hands, though the impact of Covid-19 on their particular type of business is not as clear to me - they are a software provider and those have not felt the Covid-19 impact as hard as other industries.Some positive things:Recurring Revenue represents 98% of their revenue635 upsells on a customer base of 1864 is pretty good. Looks like customers like their product.Operating cash outflow reduced from 2H19
£m 1H20 1H19General & Administrative 13 12Professional services 14 8Sales & Marketing 56 45Research & Development 8 4Depreciation & amort. 3 -Share based payments 7 3Operating expenses 101 72
1H20 1H19 YoY growthClosing customers at period end 1,864 1,337 39%New customer wins 255 349 -26%Upsells during the period 635 496 28%
Here are my thoughts (thanks to GauchoChris and Ethan for the initial research):Regarding R&D, I once read an article that low R&D can indicate a moat. Not sure if this is true and if this could be an issue if too high or too low.ZM (pre-Covid Numbers):S&M: 54% of revenueR&D: 11% of revenuePRSM:S&M: 81% of revenueR&D: 12% of revenueI read some glassdoor reviews that marketing of Blue Prism "sucks". Overall their glassdoor ratings are not the best.e.g. ConsMarketing is horrible. Better product than the competitors but you would never know it. British company with US presence, which feels like a startup. Management doesn’t know how to move the needle.Advice to ManagementSpend some budget on marketing. This is your time to shine. You should own the RPA market. What’s stopping you? Be bold.This is weird because obviously they are spending 81% on S&M.I almost wanted to take a position last week, but then I looked at some google trend numbers:https://drive.google.com/file/d/14NJ6-nTTz4UNy5u_pb_tM31k5GB...This doesn't look like a winner to me. Yes it is cheap. Perhaps for a reason?
Company reports in late Nov. Would have to see how much Covid has impacted them. They withdrew their guidance and said last half had a 15-20% drop in billings which would indicate a slow down in future rev. But Europe did recover faster. I work in finance for a FTSE 100, my product is IOT. You're right that (in the UK at least) we have eased out of lockdown in recent weeks, and usage has up-ticked since then (across various industries). However we are still well behind run rate, and the impact will likely take rest of the financial year 2021 to recover. There is a lot of uncertainty in the market, which doesn't help new business or incremental growth. We are currently mitigating the impact by offering discounts & promotional pricing to re-stimulate this growth.I've seen a lot of great points about this company in this thread, and I am intrigued to invest in the RPA space since that is, as mentioned, where the future is going. I am just wondering why now invest in a company that has been experiencing Covid headwinds on the assumption they may recover quicker than expected (and little visibility of that), instead of investing in a company with continued tailwinds (eg. ZM/FSLY). And I certainly wouldn't be inclined to build in a quicker than expected recovery from Covid into my investing criteria here, at least without more information.
ZM (pre-Covid Numbers):S&M: 54% of revenueR&D: 11% of revenueTake a look at almost any other company and I think you will find R&D is a far higher percentage of revenue. I mean the companies we look at here.I suspect Zoom's low spend on R&D is due to the CEO being Chinese and having most of their R&D done there. It might work for Zoom, but no other company on the planet is going to have their R&D done in China where it can be pilfered in a heartbeat. I've always seen Zoom's R&D as a big question mark, but they may be the exception to the rule. A.J.
Man it’s hard to invest in tech without firm grasp of tech in rapidly changing world... Gavin Baker, a popular guest on Invest Like the Best Tweeted this...https://twitter.com/gavinsbaker/status/1284481478022356994?s...“Who needs RPA/Low Code/No Code after this?” Off what appears to be AI writing code at high speed.I know Blue Prism incorporating AI but no clue how any of this actually works.
“I suspect Zoom's low spend on R&D is due to the CEO being Chinese and having most of their R&D done there. It might work for Zoom, but no other company on the planet is going to have their R&D done in China where it can be pilfered in a heartbeat. I've always seen Zoom's R&D as a big question mark..”. This was short-seller-fueled propaganda. Check your source. Here are a lot of articles for reference. http://letmegooglethat.com/?q=zoom+ceo+not+chineseZoom is an American company, founded and headquartered in California, incorporated in Delaware, and publicly traded on NASDAQ. The CEO migrated from China in 1997 and has been an American citizen since 2007. Zoom was launched in 2013. Like a lot of companies, including their peers, they have some operations in China. This is disclosed.
Take a look at almost any other company and I think you will find R&D is a far higher percentage of revenue. Here is the article mentioning signs of competitive advantages, e.g. high margins, low R&D to Sales Ratio, Consistent Profits etc.https://www.begintoinvest.com/9-signs-competitive-advantage-...I checked a few companies (AYX DDOG TWLO NTNX ESTC ZS CRWD MDB OKTA ZM COUPA TTD DOCU SMAR WORK SQ ROKU ENPH LVGO) for R&D to Sales Ratio Average R&D Ratio is 27%.Below 20%: AYX (18%), ZM (10%), TTD (18%), DOCU (19%), SQ (14%), ENPH (6%)Above 35%: NTNX (40%), ESTC (37%), WORK (72%)
Hi BroadwayDan,I read through many of the links to your post and yes it’s easy to be overwhelmed with the tech updates. I did find this quote from your source settling, “ This is a strategy that OpenAI and other researchers have been pursuing for quite some time, by starting off with a ‘simple’ problem like trying to predict the next word in a sentence. We have now steadily built up to where they are today, where a model like GPT-3 can complete several paragraphs or more. Though an incredible result, even GPT-3 at some point may lose direction and wander aimlessly. Despite its massive size (over 175B parameters), it still may struggle with keeping a long term destination in mind or holding logical, consistent context over many paragraphs.”. So, does that mean disruption for several industries including RPA?I think the above quote may be a better starting point for this discussion if it weren’t OT from the beginning?🙃
While I will take a small position in Blue Prism after reading this thread, I am also likely to increase a tiny position I had in NICE, which has appreciated nicely (couldn't resist) since I bought a few shares in late March (though what SaaS company hasn't ?).After all, NICE actually makes a profit and if RPA really has legs my guess is there will be room for several players.
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