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ServiceNow (NOW) to Buyout Intellibot, Boost RPA Capabilities

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ServiceNow (NOW - Free Report) recently announced plans to acquire Intellibot, an India-based robotic process automation (RPA) company. The terms of the buyout have not been divulged so far.

The acquisition, subject to regulatory and customary approvals, is expected to conclude in the second quarter of 2021.

Headquartered in Hyderabad, Intellibot was founded by Raghu “Alekh” Barli in 2015 along with Srikanth Vemulapalli and Kushang Moorthy. Barli serves as the CEO of the company.

ServiceNow, Inc. Price and Consensus

 

ServiceNow, Inc. Price and Consensus

ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote

 

With Intellibot acquisition, ServiceNow will be able to assist its clientele in automating repetitive tasks, boost productivity levels and enhance decision-making capabilities of the enterprises.

The Intellibot acquisition follows ServiceNow’s buyout of Canada-based Artificial Intelligence (AI) focused start up, Element AI in January 2021. Element AI will aid the company to create an intelligent workflow platform to streamline decision-making for businesses and boost employee productivity.

Also, ServiceNow is committed toward enhancing its operations in the Indian market. The company is set to establish two data centers in the country, to support its cloud services as well as cater to the local data residency requirements, by the first quarter of 2022. It is also looking to double its India headcount in the next three years.

Opportunities in RPA Market Bode Well

According to an Allied Market Research Report, RPA market is projected to witness a CAGR of 36.4% between 2020 and 2027.

The demand for RPA solutions is increasing as companies look to automate repetitive tasks to cut costs and achieve operational efficiency. Increasing adoption of RPA offerings across verticals like banking and financial services as well as healthcare sectors is driving RPA market growth.

Moreover, the ongoing pandemic has added impetus to RPA demand as enterprises look to optimize costs amid economic downturn.

ServiceNow’s endeavours to boost its RPA offerings are likely to help it attract more customers and drive the top line.

The company is looking to combine RPA offerings of Intellibot with its own automation capabilities. ServiceNow’s automation capabilities boast innovative technologies like Artificial Intelligence (AI) and machine Learning (ML) as well as Creator Studio for low-code app development, Integration Hub, Natural Language Understanding, Virtual Agent chatbots, and Document Intelligence, among others.

The integration of Intellibot RPA solutions with the Now Platform will enable ServiceNow to offer its customers an end-to-end solution to automate business processes as well as enhance employee and customer experiences.

Nevertheless, the revenue potential in the RPA space has attracted many players like Pegasystems (PEGA - Free Report) and Automation Anywhere, thereby intensifying competition.

Zacks Rank & Stocks to Consider

Currently, ServiceNow carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader technology sector are Skyworks (SWKS - Free Report) and MaxLinear (MXL - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Skyworks and MaxLinear is pegged at 19% and 20%, respectively.

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