A Look at the Low-Code/No-Code Development Market

Friday, February 15, 2019

The phrase "digital transformation" has become ubiquitous in the corporate world over the past few years. Organizations are seeking to modernize their tech infrastructure at a rapid pace with the goal of becoming more nimble and efficient in their operations. Although we are still in the early phases of digital transformation, many companies have already adopted cloud applications for structured workflows (such as customer relationship management and HR), replacing heavier on-premises software applications or processes previously managed manually by spreadsheets and email.

Outside these structured workflows, businesses also have company-specific workflows that are not readily addressed by off-the-shelf software. For example, a global coffee chain like Starbucks has a unique process for planning and managing store openings. This process likely differs from how Target manages store openings. For both of these use-cases, there is no structured application offering that would address the companies' needs. In the past, companies that could not find off-the-shelf software would turn to internal IT departments or hire external developers to build a specific application for them (or continue using legacy tools like spreadsheets, email, PDF, etc.). "However, because of a shortage of developer resources and increasing business demands for rapid deployment of new applications," explains technology analyst Bhavan Suri, "this path is becoming less feasible as developer resources become increasingly reserved for the most critical business processes."

Therefore, companies are increasingly turning to low-code/no-code application development platforms that democratize the development process and give business users the ability to develop applications themselves with minimal or no assistance from IT. Through the adoption of business applications, these business users are increasingly looking for ways to automate manual workflows and become more efficient and effective by reallocating their time to solving more complex business problems. Even IT resources and developers are using low-code development tools to increase their development speed and reduce backlog.

Very simply, a low-code development platform is a development tool that eliminates some of the minutia required when hand-coding applications. Low-code application development is often called model-driven application development, a process using visual modeling and a drag-and-drop interface that allows developers to create applications visually rather than through detailed line-by-line code. A common phrase used when talking about low-code development is "clicks over code," playing to the idea that many applications can be created without much manual coding. Instead, the code is obfuscated and generated behind the scenes as the user creates applications through a drag-and-drop interface.

Forrester expects the market for low-code development platforms to increase to $21.2 billion by 2022, up from $3.8 billion in 2017, a CAGR of 41%. Some of the highest-growth years for the market are expected to be between 2019 and 2021, where growth is expected to be over 50%.

Manual coding is really tailored for the small subset of the population that has invested the time and effort to understand how to talk to machines through code. This is understandably a difficult and time-consuming undertaking. As such, there are only a small number of people who can effectively code. A low-code platform aims to bridge some of the language gap that exists between humans and machines by abstracting the code and enabling developers and business users to create applications through visual means and business logic, which humans understand better than machine language (code).

Oftentimes, the terms low-code and no-code are used interchangeably to describe the same platform. This is generally with good reason since the lines between low-code platforms and no-code platforms are not very well defined. Most no-code vendors do not restrict users from deploying custom code on top of their platform if the user would like to layer more complex functionality into the application. At the same time, many low-code vendors do not require any coding for simple applications that are built on the platform; however, the option to custom code certain aspects of the application still exists and can be used if greater customization/complexity is desired by the end-user.

"Ultimately, what drives the decision to label the platform low-code or no-code is the target audience, in my opinion," stated Suri. Low-code/no-code companies can target either developers or business users. Companies that target business users generally tend to highlight simpler workflow automation that can be accomplished through the platform via an easy-to-use interface that business users are familiar with. These companies tend to brand themselves as no-code platforms. Meanwhile, low-code companies target IT departments/developers and generally highlight how their platform makes developers more efficient by reducing the time required to launch and maintain an application.

The pace of digital transformation is accelerating at companies all around the world, often driven by both internal and external pressure. Customers are increasingly demanding an all-digital experience from the companies they do business with. They seek instant gratification through real-time updates or instant customer service without having to talk to or wait for other human beings. Employees are also pushing for a more digital experience in their workplaces. The younger generation of workers is demanding more cloud-based, collaborative work tools that are mobile-ready (or even mobile-native) to ensure that time is not wasted emailing spreadsheets back and forth or having to recreate documents due to version control issues. Employees want to be able to access their files and communications on multiple devices when they are traveling, whether that is on their laptop, tablet, or mobile phone. Younger workers are also demanding increased automation in their day-to-day workflows as they aim to eliminate manual data entry and increase time spent on more value-added tasks.

The confluence of these internal and external forces is causing companies of all sizes to put digital transformation goals at the top of the agenda. It is becoming clearer that companies will need to embrace and prioritize the creation of a digital operating environment to gain a competitive edge and be able to recruit and maintain a talented employee base.

Digital transformation is not only being pushed from IT departments, however. Many times, it is different lines of business and even individual business users that are at the forefront of these initiatives. Business users are increasingly demanding custom applications to handle tasks and workflows that would have previously been dealt with through traditional work management tools like spreadsheets and email. Ultimately, users are seeking to automate manual, repetitive tasks (which can be mundane and time-consuming) to be able to focus on higher value-add tasks that actually solve business problems. When business users are unable to find or procure off-the-shelf software to address their needs (as is often the case for many custom workflows), they turn to their IT departments to develop business applications for them.

For a copy of "Democratizing Business Application Development and Workflow Automation" report or for more information on the companies from Bhavan Suri's coverage list, please contact your William Blair sales rep.

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