If you listen to its proponents, the low-code/no-code movement has taken the enterprise technology industry by storm. Startups and tech giants alike are touting a new method of software development that’s proving to be faster, more efficient, and more accessible than ever.
Low-code and no-code tools promise to do everything from solving the developer shortage crisis to empowering the average business user to build apps. In this regard, a wave of startups, including Builder.ai and Genesis Global, have raised $100 million or more to deliver on these promises.
This financing has also attracted the attention of the actors of the platform. SaaS giants from ServiceNow and Salesforce to Microsoft all have their own brand of low-code and no-code development features. Late last year, there were “over 200 startups, vendors, and large companies like us in this marketplace with or without code,” said Marcus Torres, vice president and general manager of the App Platform. ServiceNow low-code engine. .
It should be noted that although the terms are often grouped together, there is a distinction between low-code and no-code. While low-code tools require some understanding of programming languages, no-code tools only require basic logic and typically use a drag-and-drop user interface.
Despite market activity, industry experts and practitioners disagree on the true value of the industry. And even with all the VC money thrown around, it’s pretty clear that low-code and no-code companies still haven’t had their breakout moment.
Live with less code
The low-code/no-code movement has been around for several years, but has grown in prominence as the shortage of developers and the need to digitize more business processes has accelerated in the wake of the pandemic.
“When we started the company in 2013, there was no low-code/no-code,” said Eran Zinman, co-founder and co-CEO of Monday.com. The concept existed, but Zinman and his team didn’t have the words to describe it to investors. “I think over the last two or three years, as we’ve seen the rise of these tools, the term low-code/no-code has come up because so many people can understand the value of it.”
During these years, adoption was also lower.
“If I go back five, six, seven years ago, a lot of developers…a lot of them were naysayers,” said Ed Macosky, chief product officer of integration platform Boomi. Back then, developers wanted to write all the code themselves, but with ever-increasing workloads, that changed.
Although this movement started out focusing on developers, it has now expanded to providing tools for the average business user, said Chris Yin, director of Scale Venture Partners.
Now, Yin sees low-code and no-code companies serving one of four markets depending on whether the tool is designed for the average business user versus an actual developer, and whether the app will primarily be aimed at internal use rather than to the customer.
The low-code/no-code market can be divided into four segments.Graphic: Chris Yin/Scale Venture Partners
But a mix of hype and vendor proliferation can make the low-code and no-code industry difficult to analyze, which is why vendors, enterprises, and VCs disagree on which of these markets is the most valuable.
The real deal
For one thing, there’s still debate over whether developers or the average business user are the best target market for low-code and no-code development tools.
Most of the companies Protocol spoke to agree that these tools actually make the coding process less time-consuming for development teams “because then you can very easily, with limited effort, build new apps that are tailored to the company,” said Claus Jepsen, CTO. from the Unit4 enterprise resource planning provider.
But as a former developer himself, OpenView Venture Partners partner Mackey Craven disagreed that developers are the best target market for these tools. “For me, it’s a bit more about taking someone who [doesn’t have] the full level of specialist skills to be developers themselves and provide them with more capabilities to solve their own problems,” he said.
These people are known in the industry as “citizen developers” or line-of-business employees who are now able to build their own applications due to the ease of use of low-code or no-code tools. coded.
But the idea that low-code and no-code tools only have value because they allow anyone to code is a bit of a misnomer. “What we’re really talking about are these kinds of system thinkers and power users who can figure out the logic and, with a very simple toolset, put it into an application that goes into production,” said Josh Kahn. , Senior Vice President of ServiceNow Creator Workflows Application Experience Platform.
Even though somebody can create an application, “the problem is: was it done right? And there is a system design mindset that is needed to understand inheritance, objects, schemas, integration, design” and so on,” said Gary Hoberman, founder and CEO of no-code platform Unqork.
What the industry can agree on is that these tools will not be used to build customer-facing applications within enterprises.
Although the tools have become more complex, they still provide the most benefits internally. “We would probably never use it internally to deliver enterprise software that we sell to customers – it’s not used for that,” Unit 4’s Jepsen said.
That’s why of the various companies in the market, Scale’s Yin sees the most promise in those that focus on internal applications, where the movement originally started. “The reason it started this way is because it turns out that internal software is just a huge area of expense, and the math makes sense there,” Yin said.
The moment of escape
But the question remains whether vendors or standalone low-code and no-code platform players will capture this part of the market.
Some see these tools as a feature more than a business model, a view that leans in favor of platform players. “I view low-code and no-code as a product choice, as a way to create value in an end market,” Craven said.
Even though companies like Mendix, OutSystems, and Retool have had some success as standalone development platforms, some industry professionals don’t believe these types of companies will survive in the longer term. “I think the industry is changing to the point where you can’t stand on your own anymore,” said Matt Calkins, founder and CEO of low-code platform Appian.
Further consolidation, such as ServiceNow’s acquisition of SkyGiraffe, may be another sign that the market is becoming commoditized. “For me, it’s a kind of generic tool. I think it’s hard to be [standalone]and I think there’s probably another consolidation going on,” Jepsen said.
Still, standalone providers have advantages.
While developers can build low-code or no-code apps on Salesforce or ServiceNow, for example, they will be limited by the platforms’ walled gardens. “If I’m trying to do something that uses data from multiple different parties, or is more independent, I’d be much more likely to go with a third party,” Craven said.
While there’s room for standalone companies and SaaS giants, there’s likely another wave of consolidation to come. It seems clear that winning low-code/no-code companies will focus on building in-house software, but it’s still an open race between business users or developers as the most lucrative target market.
One thing seems certain, though: low-code and no-code development isn’t going away any time soon, and even with all the hype, the industry continues to move toward its breakout moment.
“I think within companies they are at the forefront and they are bursting out now, but it’s still early days,” Yin said. “We always expect more.”