Another RPA Acquisition: IBM buys WDG

Post by
Scott Francis

So as not to bury the lede, if you saw this announcement from IBM, and you’re a client of IBM and want to know what it means, please contact us.  We don’t have all the answers yet, but we’re a close partner of IBM’s Automation offering, and also of several RPA vendors, and we can help you navigate how to make the most of RPA with your IBM Automation estate, and what all of your trade-offs and decisions might be.

So, not that long ago, Connie Moore predicted more consolidation between process platforms and RPA vendors, and my initial take was “too soon” – in that the valuations are just too rich for the RPA vendors. But perhaps not.  There are certainly more RPA vendors than the big 3 or 4 that everyone knows about.  And apparently WDG was kind of a big deal in Brazil, despite being below the radar in the US.

IBM has previously partnered closely with both BluePrism and Automation Anywhere (and in fact, BP3 really got started with Automation Anywhere when they partnered with IBM. IBM also has integration strategies with UiPath and others.

But this is different – acquiring WDG implies that they will incorporate this new product into their Automation offering directly.  We don’t know the details yet, but we’ll find out soon enough and we’ll be in a position to help clients who want to evaluate what this means for them in the near future.

Connie’s take is published here at Deep Analysis:

Indeed a year or so ago every major software firm wanted to acquire an RPA vendor, but the valuations made them think twice. RPA was red hot, the new silver bullet. But fashions come and go, and RPA though an important and valuable technology has experienced an emperors new clothes moment or two. Beneath the glamour and glitter of RPA, many have found that the underlying technology is not as unique or hard to crack than they first imagined, SAP, Microsoft Appian, Pega, etc all made modest investments and further built on them, others simply built their own RPA or continue to partner.  Now IBM joins the party, making a modest acquisition today of Sao Paolo based WDG Automation. […]
IBM has initially positioned this to be placed in its Cloud Pak for Automation RedHat offering.

Connie expects to see further consolidation – and I think in this sense she is right – more consolidation by acquiring the minor RPA players.  Appian made a purchase. Microsoft bought Softomotive. Others have bought other small players.  But adoption for these acquisitions will be harder than it looks – RPA has already traveled far and wide – so the bar for adoption is not just to adopt a new tool, but to displace one already in use.  The big vendors are still too valuable to be acquired “just for RPA” – at this point, the acquisition would need to fit a strategic imperative to acquire new customers *and* new capabilities, it can’t just be about the technology fit as these businesses mature.

You can find IBM’s release on it here.

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