Process Mining Market in the Multiverse of Acquisitions: Celonis Buying PAFnow and Microsoft Enters with Minit Deal

Process Mining Market in the Multiverse of Acquisitions: Celonis Buying PAFnow and Microsoft Enters with Minit Deal

Over the past week, two major acquisitions in the process mining market are drawing attention to this fast-growing space. What does it mean, and will other giants follow? Read on for our expert analysis of the latest deals and implications for this market.

The spotlight is back on the process mining market after we saw two big acquisition announcements last week. First, Celonis announced the acquisition of Process Analytics Factory (PAFnow), a leading process mining product built atop Microsoft Power BI and a “Major Contender” in Everest Group’s Process Mining PEAK Matrix® 2021. Within a couple of days, Microsoft signaled its entry into the space with the acquisition of Minit, a Leader and a Star Performer in our 2021 assessment.

The latest news continues the hot trend of new tech developments and strong M&A activity in this space with companies from different technology universes, such as automation (UiPath), process orchestration (Appian), and big tech (SAP, IBM), entering the process mining market through acquisitions.

With its critical role in accelerating digital transformation and enabling continuous process optimization, process mining is becoming integral to the intelligent automation solution ecosystem. Additionally, owing to increased solution awareness and technology maturity, it has been one of the fastest-growing markets in the intelligent automation space over the past few years, making it very attractive for potential acquisitions.

This year’s acquisition frenzy started in January with iGrafx, a process management provider, announcing the acquisition of the France-based process mining specialist Logpickr. And it hasn’t stopped yet.

Let’s take a look at what the two latest deals could mean.

Celonis further strengthens its market position with PAFnow

Celonis has been the leading technology provider in the process mining market with over a 60% market share. Its Execution Management System (EMS) combines process mining and automation technologies to help enterprises reveal and fix process inefficiencies. The platform offers the capability to ingest data in near real-time from information systems, applications, and user desktops. Celonis Process Data Engine supports process intelligence through capability modules such as Execution Graph to visualize interconnected processes spanning multiple systems and departments, Process Simulation to perform what-if analysis, and Knowledge Models to manage and share process insights.

The acquisition of PAF brings a host of technical capabilities and business opportunities which can help Celonis to:

  • Expand its reach to Microsoft Power BI’s large customer base and user community
  • Integrate Celonis EMS platform with the Microsoft ecosystem, including the broader Power platform and Office 365
  • Improve the ease of getting started with Celonis as an embedded capability within the Power BI platform
  • Provide users the ability to access process mining insights through Microsoft Power BI dashboards

Celonis would also benefit from a capability standpoint through PAFnow’s:

  • Strong technical team with a similar vision for continuous process improvement
  • Pre-built connectors with Microsoft Power BI
  • Content Packs that include data extractors, pre-defined data models, and pre-configured reports for specific processes, applications, and queries

Acquiring PAFnow is part of Celonis’ strategy to enable global companies across industries to leverage the Celonis EMS solution with the Microsoft solution ecosystem to optimize their business processes.

Microsoft’s acquisition of Minit shows process mining is on its way to becoming part of something bigger

Tech giant, Microsoft has been showing keen interest in the intelligent automation space over the past few years, starting in 2019 when it added various Robotic Process Automation (RPA) features to Flow, its automated workflow service, and rebranded it as Power Automate. In 2020, it acquired a leading RPA provider, Softomotive, to mark its seriousness in the RPA space and improve its market positioning. Microsoft emerged as a “Major Contender” in Everest Group’s Robotic Process Automation (RPA) PEAK Matrix® 2021 for its Power Automate solution.

Earlier this year, Microsoft launched its in-house task mining solution with plans to later launch a process mining solution. Microsoft has been quite aggressive on most intelligent automation technology fronts, including RPA, Intelligent Document Processing (IDP), task mining, and now process mining.

Microsoft announced its acquisition of Minit, an Amsterdam-based leading process mining provider, last week for an undisclosed amount. Minit focuses on transforming the way enterprises analyze, monitor, and optimize their processes, helping them uncover opportunities to improve process performance and increase operational efficiency.

The tech company brings a host of capabilities to enhance the value proposition of Microsoft’s intelligent automation offering. These capabilities include automated process discovery and rework detector for process visualization, AI-powered root-cause analysis and process compare for conformance checking, custom metrics for process monitoring, and AI-powered simulation for performing what-if analysis.

This acquisition will further empower Microsoft to help its customers drive operational excellence by providing greater visibility into their business processes, allowing them to perform automated process analysis, and enabling them to drive process improvement initiatives. Microsoft’s entry is not only expected to play a key role in democratizing process mining technology, but it might also impart downward pricing pressure on other process mining providers as it did with its entry into the RPA market with its Power Automate solution.

Key Implications and the process mining market outlook

We expect these deals will result in the following benefits:

  • Improved awareness and greater adoption of process mining: Process mining technology will reach a much broader audience because of these acquisitions. The focus of these providers in integrating process mining platforms with Business Intelligence (BI) tools will help establish a clear distinction between process mining and BI and improve market understanding of how these technologies complement each other. This also will help educate the market on the potential of process mining technology and boost familiarity among enterprises
  • Increased evolution of the mining provider landscape: While Celonis continues to command a large process mining market share, Microsoft’s entry will put pressure on the existing players and also on future deals. Several process mining providers, including Celonis, have technology partnerships with Microsoft. These partnerships will likely continue, and clients will be given the flexibility to choose, as co-opetition is becoming increasingly common in the enterprise software space. The acquisitions would nudge other process mining providers to develop partnerships/integrations with BI providers to extend their ecosystem and fuel growth.

These acquisitions demonstrate an increasing trend of process mining becoming an integral part of bigger enterprise platforms and could also fuel more future M&A activities. Other process mining providers that are embedded in BI platforms might become good acquisition targets. The recent series of acquisitions is a testimony to process mining technology’s potential and reaffirms investors’ confidence in this market

With process mining becoming a crucial component of the intelligent automation ecosystem, the market is rapidly growing, garnering attention from all parts of the world. These acquisitions could trigger other big enterprise tech giants like Oracle, ServiceNow, and Salesforce to make similar moves, making this an exciting time.

It also will be interesting to see whether the tech leaders can drive their large client bases to use their process mining offerings and challenge the dominance of pure-play process mining providers. On the other hand, if these tech giants plan to leverage the acquired process mining capabilities solely for in-house platforms, enterprises may continue to prefer pure-play providers for cross-platform use cases.

To discuss the outlook and opportunities in the process mining market, contact us.

Also, if you’re interested in learning about our in-depth coverage of the digital workplace, check out our webinar, Top Strategies for Creating an Employee-focused Digital Workplace.

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