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IBM to Buy WDG Automation

By Will Healy – Updated Jul 8, 2020 at 10:09AM

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The acquisition of the Brazilian company should improve IBM's AI automation capabilities.

IBM (IBM -2.32%) has reached an agreement to buy WDG Automation, a robotic process automation (RPA) company. The Brazilian company produces software based on artificial intelligence (AI) that enhances access to intelligent automation using software robots.

IBM expects to use this technology to improve its Cloud Pak offerings, beginning with Cloud Pak for automation. The current Cloud Pak technology offers AI-driven solutions for capabilities such as data capture, orchestrating workflow, monitoring and reporting, and decision management.

The new RPA capabilities will help identify more opportunities for automation, enhance bot deployment, and streamline workflows. About 600 pre-built RPA functions from WDG will now go into Cloud Pak.

Additionally, WDG's technology will also go into Watson AIOps, a real-time technology that automates processes to detect, identify, and respond to IT issues. The company expects RPA will ensure data consistency across all tools connected to Watson AIOps. 

This move should also help IBM meet an essential demand of customers. According to Gartner, hyper-automation, or the automation of tasks once performed by people, is the No. 1 trend in today's AI world.

To that end, Microsoft announced its purchase of RPA company Softomotive in May. So with the purchase of the Brazil-based WDG, IBM can go toe-to-toe with the software giant while meeting a vital need for its customers.

This acquisition also comes on the heels of IBM's recent purchase of Spanugo, a cloud compliance company. It is also the second company IBM has bought since the former head of the cloud and cognitive software division, Arvind Krishna, took over as CEO. 

IBM expects this deal to close in the third quarter of 2020.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Microsoft and recommends the following options: short January 2021 $115 calls on Microsoft and long January 2021 $85 calls on Microsoft. The Motley Fool has a disclosure policy.

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