Highlight Report

Salesforce continues moves towards the back-office with Servicetrace acquisition

August 5, 2021

It was just a question of time: Not if, but when Salesforce would add to its enterprise portfolio with a move for a Robotic Process Automation (RPA) provider of its own. It is Servicetrace that turned out to be the target – and Salesforce company Mulesoft the destination. But as with ServiceNow, SAP, Microsoft, and other Independent Software Vendors (ISVs), the move is not about entering the RPA space – but about building out the capabilities of their platforms and key solutions.

Mulesoft, and not Salesforce, is driving the communication around the acquisition – which closes out in October this year. Mulesoft unlocks and integrates data from multiple sources with an emphasis on security. Now customers can add Servicetrace capabilities so line of business and knowledge workers can automate business processes. De-emphasizing Salesforce in the communications may set alarm bells ringing at Automation Anywhere – which currently enjoys a strategic relationship with Salesforce.

The acquisition is another indication that plain vanilla RPA deals have a limited shelf life. Most of the niche vendors have already been acquired by or will end up with, larger ISVs. The question now is whether there remains room for a standalone automation platform, and if so, what kind of capabilities that would need to have?

RPA is becoming part of many ISV’s ecosystems

Many RPA vendors have ended up in ISV ecosystems such as those driven by (for example) Microsoft, SAP, and ServiceNow. Here the role of RPA is to expand platform capabilities, broadening their offering towards the delivery of the end-to-end, cross-silo processes of the HFS OneOffice, where the focus is firmly on the outcome.

In announcing the acquisition, Mulesoft CEO Brent Hayward blogged that Salesforce remains an open platform and that they would continue to support their community of partners – including their current RPA partners. The Salesforce App Exchange includes Automation Anywhere, Blue Prism, and UiPath among its RPA options.

Many other smaller RPA firms have already been snapped up by established enterprise software firms keen to add RPA functionality. The trend is beyond discrete RPA tuck-ins. Just as the big three (UiPath, Blue Prism, and Automation Anywhere) are becoming more than RPA, so acquisitions are now more aligned with capabilities beyond RPA: process intelligence, automation, insights, and the greater value that comes from combining RPA with emerging technologies like artificial intelligence (AI) and smart analytics. A triple-A trifecta of value is emerging – Automation- Analytics-AI. See our Triple-A Trifecta Top 10 from late 2020.

Servicetrace offers a range of robotic ‘German-made’ solutions

Servicetrace was among the rump of RPA providers that failed to gain significant mindshare. It was founded in Germany in 2004 but has failed to scale beyond 50-60 employees with headquarters in Darmstadt, Hessen. Its XceleratorOne product promises end-to-end process automation with RPA. It also has bots for application performance monitoring and automated software testing.

Example customers to date include Atos, The British Heart Foundation, Swedish retailer COOP, Fujitsu, Siemens, and Deutsche Telekom, with a clear skew to the German market.

And the business wears its ‘Made In Germany’ badge proudly, offering patented tech for image recognition, pattern search, and AI-assisted OCR. Workflows can be created by citizen developers with a drag and drop ‘no-code’ interface for design and customization. The Servicetrace team is expected to join Mulesoft post-transaction.

Salesforce goes after new buying centers beyond the front office

While Servicetrace is a tuck-in acquisition, it needs to be seen in the context of bold and expensive acquisitions such as Slack, Tableau, and Mulesoft. These open new buying centers for Salesforce.

Slack is opening new buying centers in IT and RPA capabilities will help to expand the reach toward the back-office. This is complemented by more opportunistic moves such as the work.com offering – targeting ServiceNow.

It is telling that, despite this willingness to engage in large-scale M&A, Salesforce did not go after one of the RPA incumbents – but after one of the niche providers, instead. Just as with the recent ServiceNow deal with Intellibot, this is all about extending the capabilities of the platform –not about entering the RPA market. In our view, it is a smart move. Servicetrace won’t bring customers for the broader platform capabilities but Salesforce can take care of much up- and cross-selling.

The Bottom Line: Servicetrace will take Salesforce deeper into the back-office by blending cloud-native and legacy capabilities

As with the recent acquisition of Slack, by adding RPA, Salesforce is again expanding the capabilities of its platform. The move is less about entering the RPA market, more about transforming the service experience. The crucial challenge will be in the integration of Servicetrace into Mulesoft, the broader Einstein portfolio, or even the AIOps capabilities of Slack. In combination, the goal is the acceleration of client journeys toward the HFS OneOffice.

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