German data process mining software firm Celonis GmbH made a key acquisition today, buying a rival in the market called Process Analytics Factory GmbH for an undisclosed fee.

Celonis said the acquisition will make it easy for millions of users of Microsoft Corp.’s Power Platform to tap its Execution Management System and increase the efficiency of their operations. Celonis’ Execution Management System is a process mining platform that helps enterprises find opportunities to streamline their business operations by analyzing the data they generate as part of their day-to-day business activities.

For instance, it can detect if a retailer buys more of a given product than it can sell within a certain time frame, or if a factory is producing a certain item at lower volume than at the company’s other plants. It identifies such issues by scanning invoices, sales logs and other business records. Other use cases include helping online retailers reduce inefficiencies in their delivery networks, so they can get packages out to customers more quickly.

Process mining refers to analysis of data to spot inefficiencies. It’s different from the better-known robotic process automation industry, which has to do with automating processes to remove those inefficiencies.

That said, Celonis does provide means for companies to fix the problems they discover using its platform. It does that primarily by using artificial intelligence to suggest changes and create simulations of those alternative business processes. Decision makers can then test various operational changes before implementing them to see which work best.

Celonis has a big war chest to play with, having raised a mammoth $1 billion funding round at an $11 billion valuation in June 2021. It hasn’t been shy about spending that money, having acquired the data streaming startup Lenses.io Ltd. for an undisclosed price the following October.

As for PAF, it also sells process mining software. However, its software is laser-focused on Microsoft users. It’s completely integrated with Microsoft Power BI and Microsoft Office 365, where it helps companies to analyze, visualize and optimize processes.

Celonis said it’s buying PAF to further the reach of its Execution Management System, as part of its goal to bring process mining to more industries and companies. In that sense, PAF is a good target, since Microsoft Power BI is used by 97% of the Fortune 500 and more than 260,000 companies worldwide. All of those users could now potentially benefit from Celonis.

Celonis said it’s expanding at a time when the enterprise is going through a generational shift that’s seeing more and more companies rely on process insights and intelligence to boost their operational efficiencies. It cites a forecast from Gartner Inc. that says the market for hyper-automation software will be worth almost $860 billion by 2025. Today’s acquisition will ensure Celonis is well-placed to benefit from that growth.

“Since we started 11 years ago, the Celonis mission has always been the same, to help our customers reach the full potential of their business performance by removing process inefficiencies, and that requires Celonis to be everywhere,” said Celonis co-founder and co-Chief Executive Alex Rinke. “The PAF acquisition enables the millions of users of the Microsoft Power Platform to use Celonis’ unique data and intelligent insights to power analytics, automation and collaboration.”

Analyst Ray Wang of Constellation Research Inc. told SiliconANGLE that PAF really expands the market opportunity for Celonis. He notes that Power BI is part of a $21 billion business intelligence market that Constellation estimates will grow to more than $41 billion by 2026. Within that market, PowerBI has a 13% market share, and also a 6% share of the market for data visualization.

“This is a great move that will help Celonis expand its reach into a variety of markets, including the Microsoft ecosystem,” Wang said. “The shift from RPA to process mining is real, and Power Automate users will be able to take advantage of this to gain process mining capabilities.”

Wang added that he believes there will be further consolidation in the process mining and RPA segments. “This is a growing market and hot space that encompasses not only process mining, but in the future, more cognitive automation and intelligent orchestration.”

Celonis said it’s working to integrate PAF’s software into its own platform. It said it plans to showcase the new capabilities during the Celonis World Tour, a series of events it will host at multiple cities across the U.S., Europe and Asia throughout May and June.

PAF founder and CEO Tobias Rother said the two companies will work to build a bridge between the Microsoft Power Platform and Celonis Execution Management System.

Image: Celonis