- IBM said Wednesday it is acquiring WDG Automation, a Brazilian robotic process automation company.
- The news comes just two months after Microsoft announced a similar move in what has become one of the hottest sectors in tech.
- Robotic process automation, or RPA, is technology that allows businesses to automate common and repetitive computer tasks, which has become a critical need for enterprises, especially after the pivot to remote work.
- Acquiring WDG automation will help IBM clients automate more of their business processes and "is going to free up people to use their time in a more effective manner," Michael Gilfix, IBM's vice president for cloud integration, told Business Insider.
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IBM is buying an automation startup just two months after Microsoft made a similar move in what has become one of the hottest sectors in tech.
IBM said Wednesday it is acquiring WDG Automation, a Brazilian firm that specializes in robotic process automation, or RPA, which allows companies to automate common, repetitive computer tasks. The terms of the deal were not disclosed.
The acquisition will help IBM clients automate more of their business processes and "is going to free up people to use their time in a more effective manner," Michael Gilfix, IBM's vice president for cloud integration, told Business Insider.
WDG Automation has "great technology, has super satisfied customers, but they don't have an ability to get broad market reach and that's the benefit of the marriage with IBM," he told Business Insider.
Microsoft is buying its way into the space
IBM's purchase follows Microsoft's announcement in May that it plans to buy another RPA firm, Softomotive, in a deal that further underscored the growing importance of the market.
Two of the largest RPA industry players — UiPath and SoftBank-backed Automation Anywhere — have both raised hundreds of millions of dollars in funding and command multi-billion-dollar valuations. UiPath is also reportedly in fundraising talks that would value the company at over $10 billion, according to Bloomberg.
Both of those firms, however, recently underwent layoffs.
In the wake of Microsoft's purchase of Softomotive, UiPath said it would hire 100 new research and development positions. The company, which was previously eyeing an initial public offering next year, has several former Microsoft executives on its payroll — including recent hire Ted Kummert, who currently serves as UiPath's executive president of product and engineering.
"We do not underestimate Microsoft," Chief Market Officer Bobby Patrick said at the time.
RPA is a booming market
RPA has steadily grown in popularity over the past few years, and saw widespread use at the onset of the coronavirus pandemic. The technology was tapped by banks, for example, to quickly process and distribute federal loans under the Paycheck Protection Program.
It's also quickly becoming one of the sought-after jobs. RPA knowledge previously ranked among the top three most in-demand skills. And LinkedIn also listed robotics engineer as one of the country's top 15 emerging jobs.
But there is some skepticism over the ability of companies to expand the technology across the enterprise, raising doubts over how quickly the RPA firms can continue to grow.
"RPA implementation often requires specialized developers and scripts that fall apart when unforeseen cases arise," analysts at data firm PitchBook wrote in a recent report. "The segment has continued to grow at a high rate, which indicates that enterprises have prioritized improving slow and inefficient legacy processes but highlights the barriers to automating processes across business units."
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