|Power Score: 49.73||Momentum Score: 30.0 (6)||HQ: Cambridge, MA||CEO: Alan Trefler|
Valuation: $11.1 billion (+40% YoY)
Amt. Raised: $32.4 million
Lobbying Spend: $160,000
Industry Orgs: No
Headcount: 5,936 (+6% YoY)
Engineering Headcount: 2,045 (+3% YoY)
Big Tech Experience: 3%
Open Roles: 1,645
R&D Spending: $237.0 million (+15% YoY)
Patents Applied For: 13
Patents Owned: 31
Acquisitions: Qurious.io (January 2021)
Exec Team Exits: No
Diversity Data?: No
ESG/CSR Data?: Yes
Pegasystems is perhaps the tortoise of the RPA space, proving that slow and steady can be a viable market strategy. The company was founded in 1983, which makes it geriatric in tech years; it's been publicly traded since before the dot-com bubble burst. While the UiPaths and Automation Anywheres of the space have gobbled up increasingly rich funding rounds and valuations as RPA pure plays, Pega has more quietly embedded RPA capabilities into Pega Infinity, its existing customer engagement platform, giving it the advantage of having a built-in user base. But that strategy also speaks to how Pega thinks about RPA as a technology: The company sees it as an important asset to more robust digital transformation tools, but not as a panacea that warrants a stand-alone offering. As a result, Pega's market power is more shielded from a dip, if RPA proves to be transient, but, on the flip side, the company isn't in as strong a position to capitalize on the exponential growth of stand-alone RPA that some analysts project.
Pega's cloud push over the course of the last five years has paid dividends, especially during 2020, when cloud ACV grew 21% against the previous year. Though it's hardly complacent, Pega's legacy status stands in its way of having true disruptive power; in the last year, the company's R&D budget grew by just 15%, the smallest relative increase of the public companies in this Power Index. The company has however introduced X-ray, an innovative AI product designed for "self-healing" when platforms within the RPA context change.
Hedge funds are lining up behind Pegasystems of late, with the stock being featured in 35 portfolios, a new high for the company, according to Yahoo! Finance data. And while Pega seems to be playing both sides of the RPA debate, the company's acquisition of the speech analytics firm Qurious.io at the beginning of 2021 should broaden its NLP capabilities within RPA, just as Automation Anywhere did with IQ Bot.
They Said It
"A lot of these RPA vendors are running around saying, 'All you need is the tail.' You really need an engine driven by AI and driven by process automation — that has to be at the heart. That's the dog to the RPA tail." — CEO Alan Trefler in a May 2020 interview