Pega and AWS sign five-year strategic collaboration for AI services

WALTHAM, Mass. - Pegasystems Inc. (NASDAQ:PEGA), a software company with an $8.52 billion market capitalization and impressive 75.74% gross profit margins, announced Monday it has signed a five-year strategic collaboration agreement with Amazon Web Services (AWS) to integrate AWS’s generative AI services with Pega’s enterprise software solutions.

The collaboration will combine AWS Transform and Amazon Bedrock with Pega Blueprint to help enterprises accelerate legacy system modernization and implement AI-powered workflow automation. According to a recent survey conducted by Pega and research firm Savanta, 68% of IT decision makers in global enterprises report that outdated legacy systems are preventing them from adopting innovative technologies like AI and automation. The partnership comes as Pega demonstrates strong business momentum, with revenue growing 14.29% over the last twelve months.

Under the agreement, Pega will integrate Amazon Bedrock as the primary generative AI foundation powering Pega Blueprint and Pega Platform. This integration will allow clients to access large language models from providers including Anthropic, Amazon, Cohere, and Meta with enterprise-grade security controls.

The partnership also establishes AWS Marketplace as the preferred transaction mechanism for Pega-as-a-Service, which aims to reduce time between contract signing and implementation while providing clients with financial benefits.

"By deepening our collaboration with AWS, we’re taking another major step in empowering organizations to use generative AI to accelerate their legacy application transformation initiatives," said John Higgins, chief of client and partner success at Pega.

Chris Grusz, managing director of technology partners at AWS, noted that "Generative AI is not only revolutionizing what customers can build in the cloud, but with services like AWS Transform, it’s fundamentally changing how quickly and seamlessly they can get to the cloud in the first place."

The announcement is based on a press release statement from Pegasystems Inc. While the stock has experienced a short-term decline of 8.92% over the past week, InvestingPro analysis reveals the company maintains a "GREAT" financial health score, with multiple positive indicators available to subscribers. Investors can access comprehensive analysis and 16 additional ProTips through the detailed Pro Research Report, available exclusively on InvestingPro.

In other recent news, Pegasystems has undergone significant developments that are capturing investor attention. The company recently completed a two-for-one stock split, which doubled its share count and adjusted the share price, making it more accessible to a broader range of investors. Following this, Citi adjusted its price target for Pegasystems to $66, while maintaining a Buy rating, reflecting the technical change due to the stock split. Loop Capital also raised its price target for Pegasystems to $60, citing increased confidence in the company’s growth potential and valuation. Additionally, Pegasystems achieved FedRAMP High status for its generative AI solutions, allowing government agencies to deploy these tools while adhering to federal security standards. This certification includes enhancements to Pega Cloud for Government, such as improved scalability and compliance capabilities. Furthermore, DA Davidson increased its price target to $50, recognizing Pegasystems’ strategic positioning in AI. These developments follow shareholder approval of the stock split and an increase in authorized shares, indicating strong support for the company’s strategic initiatives.

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