Why Automation Vendors Can’t Stop Buying Optimization Vendors And What It Means For The Market And For You

On March 31, Microsoft and Minit announced that the former was acquiring the latter. This is, by Forrester’s count, the eighth time a major automation vendor has purchased a process optimization vendor since 2020. Why are some of the biggest software companies in the world so eager to grab a slice of the relatively small ($525 million per Forrester’s estimate) process optimization market? And what does this mean for you?

Optimization Is The Gateway To Automation

Insight for you: How do you know what process you should automate? And then, once automated, how do you measure your results? Automation vendors are interested in optimization software because it identifies opportunities for their products and it measures the value they provide.
Leverage for vendors: On its own, the process optimization market is not huge. In 2022, Forrester estimates it is roughly $525 million. If vendors like SAP were only interested in optimization, the reported $1.2 billion (€1 billion) it paid for Signavio would seem like a steep price to pay to enter a relatively small market. If, however, optimization is the key to unlocking the $18 billion (and growing) process automation market, then these acquisitions make sense.

Consolidation Is A Comfortable Cage

Efficiency will go up: As the automation market digests and metabolizes the optimization market, results will go up, and prices should go down. At a technical level, integration makes automation easier and faster. At a commercial level, bundling services leads to discounts, lower prices equal more seats, and volume will drive prices lower. On this front, things look good from a buyer perspective — at least in the short term.
Choices will go down: Bundling is just a nice word for vendor lock-in: We may be barreling toward a world in which all optimization roads lead to a predetermined automation vendor. If your automation needs are heterogenous, you may be forced to choose between utilizing a suboptimal solution for some automation use cases or spending even more money to purchase additional software. In short, Forrester imagines a world in which the road to automation is broad and sunny but the destination may not be what you expected.