The Emergence of Low-Code Platforms for Enterprises
Social media now makes it easy for anyone to make armchair observations about how hiring in STEM ought to take place. “There needs to be more people from group X, Y, or Z represented in the population of tech workers,” you’ll hear them say. Then, they’ll point to some machine learning startup that’s selling a snake oil solution to recruiters which proposes to solve whatever perceived injustices the twitter-verse has deemed problematic.
We need a new rule. Before you get to criticize a tech company’s hiring practices, you need to spend at least one year working in a tech-heavy role (no, your ability to spew vitriol on social media platforms doesn’t count). Then, you need to have worked as a technical hiring manager for sufficiently long enough to see the impact of your hiring decisions on a high-performing team that’s grown to trust you. Only then will you understand that competent technical people don’t get that way because of a university education. The highest echelon of competent technical people usually consists of born nerds who stay up all night drinking red bull and solving code problems without any consideration for what others refer to as “a social life.” Competent hiring managers know how difficult it is to find these nerds, hire them, teach them how to play well with others, then make sure they’re never forced to work with stupid people otherwise they’ll leave. (Gwyneth in HR often confuses the inability to suffer fools with arrogance.)
Today, the need to find and recruit stereotypical programming nerds is becoming less of a problem. Machine learning algorithms are now helping us build better software. Instead of staffing a hardcore technical in-house development team, an enterprise can now choose to use low-code platforms which enable less technical resources to design and deploy enterprise-grade applications. One pioneer in providing a low-code platform to enterprises across all industries is OutSystems.
Founded in 2001 with Portuguese roots, OutSystems is a low-code platform that’s taken in $422.1 million in funding so far with the lion’s share of that coming in the form of a $360 million private equity round led by Goldman Sachs and the firm that brought us Barbarians at the Gate, KKR. (Goldman is also invested in Unqork, a New York-based no-code application platform that helps large enterprises build complex custom software faster and raised a $131 million Series B just days ago.) In 2010, 80% of OutSystems’ revenues came from Portugal. Today, that number has flipped, with more than 80% of revenues coming from 1,200+ clients in 60 countries across the globe. It’s remarkable to see big-name reference clients coming from almost every sector you can think of. They’re all using the OutSystems low-code platform, and like McDonald’s, they’re lovin’ it.
What’s a Low-Code Platform?
Let’s start with a concise definition of “low-code” provided by OutSystems:
Low-code is a software development approach that enables the delivery of applications faster and with minimal hand-coding. Using visual modeling in a graphical interface to assemble and configure applications, developers skip all the infrastructure and re-implementation of patterns that can bog them down and go straight to the unique 10% of an application.
As any programmer knows, the only way to understand something is to get your hands dirty. The first thing you’ll notice about OutSystems is how easy it is to get started. Anyone can download the platform and begin building software. The development environment is the OutSystems IDE, the only tool you need to create, edit, and publish your applications. The whole “journey” from clicking the “Try for Free” button to beginning to build an actual app is quick and painless.
Programmers usually see “guided tutorials” as just an impediment to getting stuff done. The one provided by OutSystems is actually pretty useful, and immediately starts showing you how to import data from a spreadsheet and tie it a graphical user interface. If you ever used Microsoft Access to build an application, this whole process will seem rather familiar.
Drag-and-drop programming like what you see above used to be called a “visual programming language,” but in this case it’s much more than that. The OutSystems development environment takes care of things like security or “change control” automatically. (One big problem in developing software is tracking changes and version control between releases). OutSystems leverages a full reference-checking and self-healing engine called “TrueChange” that “assures error-free and consistent changes across all application components.” All the programmer needs to worry about is messing with the 10% of the application that truly needs some nerdy brainpower.
The proof is in the pudding, and the OutSystems website is packed with examples of how low-code implementations can affect the bottom line.
Let’s take a look at one that’s quite relevant to a previous article we wrote on iRhythm Stock – A Play on Cardiac Monitoring and AI.
A Healthcare Use Case
We previously wrote about how iRhythm is collecting lots of big data from cardiac monitors and feeding it to machine learning algorithms that can then provide some personalized medicine. In that article, we talked about how Medtronic (MDT) – which happens to be one of the 30 dividend growth stocks we hold – was also developing a cardiac monitoring solution with a different form factor. In order to collect all the cardiac monitoring data from the field, Medtronic needed an “IoT-enabled monitoring and triage platform.” In other words, they needed a scalable enterprise-strength application that complied with the data privacy concerns inherent to healthcare.
Initially, Medtronic built their enterprise app, FocusOn 1.0, using a third-party off-the-shelf eHealth platform which they quickly realized was too hard to customize. Then, they switched to low-code, and built FocusOn 2.0 using the OutSystems platform, going from proof of concept to production in just six months. (They were provided with development support from OutSystems partner Noesis, but the platform is built so that they can do changes and support themselves going forward.)
Medtronic was particularly pleased with the flexible licensing program which allowed their costs to scale alongside user growth. Not only did everything work better, but it also cost less to build and maintain. OutSystems reduced Medtronic’s IT budget needed for the program by around 50%. You can bet that was noticed by senior managers who then started asking other teams the old “why can’t you do what they did” question.
Low-Code and No-Code Competitors
While researching competitors in this space, we noticed people using the terms “low-code’ and “no-code” interchangeably. OutSystems published an excellent blog piece on the difference between the two which is basically this:
- Low-code development is a way for developers to design applications quickly and with minimum hand-coding
- No-code solutions are built for citizen developers who may not know, nor do they need to know, any actual programming languages to use the product.
It’s always fun to look at Gartner’s Magic Quadrants because they give you an idea of who else is playing in your space – at least the major players anyways. While there are more than 200 companies currently marketing some form of low-code or no-code solution, Gartner has identified the major players as follows:
There are some insightful takeaways that accompany the above quadrant. For example, “over 2,500 components are available on OutSystems’ Forge app store, and reference customers’ usage of shared components in this ecosystem was among the highest.” These are reusable components that people are actually using. And the people who are using these components ought to know if they’re any good. “OutSystems tends to be favored by professional developers, rather than citizen developers,” says Gartner. In other words, this is a tool that programmers are adopting on their own because they see a benefit in using it. Half the battle sometimes is convincing hard-headed development leads to adopt a platform that management is imposing on them. It’s much better when they’re your fans who are helping sell the solution to senior management.
OutSystems shares their space on the leadership quadrant with some big names like Microsoft and Salesforce, along with a smaller low-code vendor named Mendix. In August of 2018, Mendix was acquired by Siemens for $730 million in cash, an exit that bodes well for investors in OutSystems.
Building a great enterprise application isn’t just about slinging code, it’s about building the right thing. It’s about providing support for the app, getting people to use it, and most importantly, communicating the value proposition to senior management around bonus time. In today’s world, companies need nerds to not only understand the technical aspects of enterprise apps, but to communicate with the business, from requirements gathering to showing off the end product. Finding candidates who have expert communication skills, and are technically competent, is extremely difficult. No number of machine learning algorithms will solve for that. Platforms like OutSystems don’t replace the traditional notion of a “programmer,” they simply equip tomorrow’s “information technology workers” with even more skills so that organizations across all industries can do more with less.