UiPath: Decoding Cloud Commits

To understand cloud commits 💰, let’s go beyond hyperscalers’ perspective and unpack their strategic impact on businesses, using UiPath as an example. In 2023, their cloud commits were equal to a significant 13% of their revenue.

As a refresher, cloud commits are multi-year contracts with hyperscalers like Amazon Web Services (AWS), Microsoft Azure, or Google Cloud. They bind customers to consume a certain volume of cloud services, in exchange for discounts.

We often discuss commits in the context of cloud marketplaces because hyperscalers allow their use for purchasing third-party software in these marketplaces. This approach not only accelerates growth and retention but also enhances network effects.

📈 Cloud Commits - Significant Company's Spend

In UiPath's FY2023 scenario, they had $138M in cloud infrastructure commitments, equating to 13% of their $1.06 Bn revenue.

~1/3 of commits were less than a year, with 2/3 due in 1-3 years. This distribution is typical as companies often sign 1-3 year contracts based on predictable spending.

Crucially, cloud commits are not just declarations; they are “enforceable and legally binding”.

As a tech company, UiPath's cloud spend might naturally be higher than that of some non-tech businesses. However commits equal to 13% of revenue is a significant number that is impossible to ignore even at C-suite or board level.

Thus, cloud commits are becoming a crucial C-level topic across various sectors. and not only about making these commitments but also effectively utilizing them.

🤝 Integration of Partners into GTM

Interestingly, UiPath also had $82.5M in service credits from third-party alliance partners. This reflects a deep integration with their partner ecosystem, which, as Co-CEO Robert Enslin puts it, “is key to evaluating our market leadership position, growing our share of wallet across key accounts, and delivering best outcomes for our customers.”

UiPath's business partners, including system integrators, VARs, and business consultants, enhance their market presence and drive greater sales efficiencies. In FY2023, they “closed deals with a select number of partners to offer our technology as managed services to their customers.”

☁️ UiPath is also actively working with hyperscalers to expand their customer reach.

“We recently announced several new strategic partnerships. These include Amazon Bedrock, which enables automation developers and citizen developers to seamlessly integrate generative AI directly into their UiPath Studio and Studio Web automations, and the availability of the AI-powered Business Automation Platform on the Google Cloud Marketplace early 2024”

Co-CEO, emphasizes,“Our partners and GSIs are an important element of our go-to-market motion that help us expand our reach to customers in a scalable, efficient, and cost-effective way…”

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