Pega and AWS Forge Path to Enterprise Agility Through AI-Driven Legacy Overhaul

The global enterprise software market faces a crisis: outdated legacy systems are stifling innovation. A recent Pegasystems-Savanta survey reveals that 68% of global IT decision-makers cite these systems as barriers to adopting AI and automation. Enter Pegasystems (NASDAQ: PEGA) and Amazon Web Services (AWS), whose landmark five-year strategic collaboration announced on July 14, 2025, aims to solve this problem—and unlock massive growth opportunities for both companies.

The Legacy Debt Trap

The Pega-Savanta survey, conducted with over 500 global IT leaders, paints a dire picture:
- 88% of firms feel technical debt limits their ability to compete with agile rivals.
- 57% believe legacy systems drive customer attrition via poor experiences.
- 47% still rely on systems 11–20 years old, with 16% clinging to technology over two decades old.

This technical debt isn't just a nuisance—it's a financial and operational albatross. Enterprises are increasingly desperate to modernize but lack the tools to do so without disrupting critical operations. Enter Pega and AWS.

The AI-Powered Solution: Bedrock, Transform, and the "Autonomous Enterprise"

The partnership leverages two AWS tools to tackle legacy systems:
1. AWS Bedrock: Serves as the AI backbone for Pega's tools like Pega Blueprint and Pega Platform™. Clients can securely deploy large language models (LLMs) from Amazon, Anthropic, Cohere, and Meta across app development lifecycles.
2. AWS Transform: Uses agentic AI workflows to automate legacy modernization, enabling seamless cloud migration without operational disruption.

Combined with Pega's vision of the "autonomous enterprise"—where AI augments human capabilities—the partnership aims to accelerate cloud adoption and eliminate technical debt. Key benefits include:
- Pega-as-a-Service via AWS Marketplace: Reduces time-to-market for clients and provides financial incentives.
- Security and Governance: Amazon Bedrock's enterprise-grade controls address compliance concerns.
- Cross-Departmental Agility: AI-driven workflows streamline customer service, sales, and marketing processes.

Financial Synergies: A Growth Catalyst for PEGA

The deal is a win-win. For Pega:
- Revenue Growth: Pega-as-a-Service sales through AWS Marketplace tap into AWS's vast customer base.
- Margin Expansion: Cloud-based, subscription models typically improve profitability over on-premise licenses.
- Competitive Edge: Few rivals combine Pega's workflow expertise with AWS's AI/cloud scale.

For AWS, the partnership reinforces its position as the go-to cloud provider for enterprise modernization—a market Gartner estimates will hit $800B by 2030.

Why Investors Should Act Now

The Pega-AWS deal is a strategic inflection point for PEGA. With 68% of enterprises struggling with legacy systems, the addressable market is enormous. Key catalysts for investors:
1. Market Share Gains: Pega's AI-driven modernization tools could carve out a leadership position in the legacy-to-cloud transition.
2. Subscription Revenue: Pega-as-a-Service models offer recurring income streams.
3. Cross-Selling Synergies: AWS's 450,000+ customers represent a direct upsell opportunity for Pega.

Risks to Consider

• Execution Risk: Legacy modernization is complex; delays could disappoint.
• Competition: Microsoft's Azure and Google Cloud offer rival AI/cloud stacks.
• Regulatory Scrutiny: Data governance concerns may slow adoption in sensitive industries.

Bottom Line: PEGA is a Buy

Pega's partnership with AWS transforms it into a critical player in the $800B enterprise modernization market. With a strong pipeline of global enterprises needing to replace legacy systems, and AWS's infrastructure backing its AI tools, PEGA is positioned to deliver outsized returns. Investors should consider adding PEGA to portfolios focused on cloud-native SaaS and AI-driven transformation.

The clock is ticking for enterprises stuck in the past. Pega and AWS are offering them a lifeline—and shareholders stand to profit.