IBM is acquiring WDG Automation, a robotic process automation (RPA) software provider in Brazil. Financial terms were not disclosed.
This is M&A deal 273 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.
The acquisition, expected to close in Q3 2020, comes as giants like Microsoft and upstarts like Automation Anywhere, Blue Prism and UiPath strive to automate millions of manual business processes worldwide -- including IT service management (ITSM) and help desk tasks.
RPA Software Acquisitions: Are Channel Partners Paying Attention?
RPA is a fast-growing software industry. The global robotic process automation market is expected to reach $10.7 billion by 2027, expanding at a CAGR (compound annual growth rate) of 33.6% from 2020 to 2027, according to Grand View Research Inc.
Much of the growth involves enterprise deployments. Next-generation MSPs such as Electric.ai has so far focused on their own automation initiatives and avoid the RPA hype. But there are signs that RPA may come down market.
For instance, Microsoft acquired RPA software company Softomotive in May 2020. The acquired business tuck into the Microsoft Power Automate organization — and strive to enable “everyone to create bots to automate manual business processes.”
Despite the RPA market’s rapid growth, the sector has also faced economic challenges amid the coronavirus pandemic. The evidence: Both UiPath and Automate Anywhere have had targeted layoffs in recent months.
IBM Acquires WDG: Keep an Eye on Cloud Pak for Automation
WDG is known within Brazil as WDG Soluções Em Sistemas E Automação De Processos LTDA.
The WDG Automation technology is "designed for business users to create automations using a desktop recorder without the need of IT. These software robots can run on-demand by the end user or by an automated scheduler," IBM says.
IBM will tuck WDG's business into the IBM Cloud Integration organization. The acquired technology will be available through IBM Cloud Pak for Automation on-premises, and in public or private cloud environments.
IBM Cloud Pak for Automation offers clients a single set of AI-infused automation software and services, including data capture, workflow orchestration, decision management, monitoring and reporting, the company says. Customers, in turn, can "design, build and run intelligently automated business processes and IT operations," IBM says.
IBM will integrate over 600 pre-built RPA functions from WDG Automation into Cloud Pak for Automation, the buyer says.IBM Services, in turn, will help customers to "quickly identify more granular opportunities for automation, including tasks that have many steps, as well as help ensure consistent and accurate data is being used across all tools and business functions, including customer service, IT, finance, HR, and supply chain," the buyer says.
IBM Acquires WDG: Executive Perspectives
In a prepared statement, Denis Kennelly, general manager, cloud integration, IBM Cloud and Cognitive Software, said:
"IBM already automates how companies apply AI to business processes and IT operations so they can detect opportunities and problems and recommend next steps and solutions. With today's announcement, IBM is taking that a step further and helping clients accelerate automation to more parts of the organization, not just to routine, but more complex tasks so employees can focus on higher value work."
Added Robson Felix, founder and CEO, WDG Automation:
"Automation is crucial in the digital era, as businesses need to perform several repetitive or routine tasks, so that employees are able to focus on innovation. I'm incredibly proud of the role WDG Automation has played in the RPA market with a unified and integrated platform to help companies in Brazil increase their productivity."
Concluded Kleber Rodrigues Junior, co-founder, WDG Automation:
"Joining forces with IBM will scale our capabilities to a wider audience, helping companies around the world accelerate their growth on their business transformation journeys."
IBM CEO Seeks to Transform Business
This is IBM’s second acquisition since CEO Arvind Krishna succeeded Ginni Rometty, ChannelE2E believes. The other deal involved buying Spanugo, a provider of cloud cybersecurity posture management solutions.
Krishna also spearheaded IBM’s Red Hat acquisition in 2019 before becoming CEO in 2020.
While IBM's recurring revenues have been growing, they haven't kept pace with massive public cloud service providers (CSPs) such as Amazon Web Services (AWS) and Microsoft Azure. Amid that reality, IBM has increasingly focused on multi-cloud and hybrid cloud management opportunities -- which is somewhat akin to VMware's business strategy under parent Dell Technologies.