Inside Advanced Scale Challenges|Monday, November 19, 2018
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Investors High on Low-Code Developers 

As the low-code approach to rapid application development gathers steam, new investors are pumping huge sums into the sector designed to speed delivery of distributed applications with minimum hand coding or upfront investment in training.

The latest example came this week when Wall Street powerhouses Goldman Sachs (NYSE: GS) and KKR (NYSE: KKR) committed a whopping $360 million in low-code pioneer OutSystems. The enterprise software vendor headquartered in Portugal with offices in Atlanta said Tuesday (June 5) it would use the investment haul to among other things expand R&D into software automation.

According to the web site Crunchbase.com, OutSystems has so far raised more than $422 million in private equity funding since its founding in 2001.

The low-code approach to enterprise software development is gathering momentum as companies leverage platforms like OutSystems’ as part of cloud and other digital initiatives along with process automation efforts. Estimates of the overall size of the low-code market vary. In a study commissioned last year by another low-code entrant, Appian, Forrester Consulting pegged the market at $10 billion by 2019. Forrester cited requirements for faster delivery of business process automation along with more frequent applications updates.

OutSystems cited other market forecasts that estimate the global low-code market is worth as much as $27 billion, with annual compound growth rates as high as 44 percent.

Meanwhile, software giants like Microsoft (NASDAQ: MSFT) are also investing heavily in collaborative software development. Microsoft announced earlier this week it would acquire the open-source programming platform GitHub in an all-stock deal worth $7.5 billion. More than 28 million open-source developers use GitHub, which boasts more than 85 million code repositories. The platform previously raised an estimated $350 million in venture capital.

The GitHub acquisition and the investment in OutSystems underscore the need to encourage collaboration in software development while automating routine processes. Those steps are seen as among the remedies for overworked DevOps teams struggling to deploy distributed applications and software updates.

OutSystems said its platform leverages AI and other automation tools in place of traditional coding to accelerate deployment of business applications. A growing number of low-code vendors are promoting their platforms as a way to reduce application deployments from weeks to days despite a growing shortage of programmers.

Proponents also point out that low-code platforms allow developers to add new capabilities to applications without affecting performance.

“We’re attacking one of the biggest problems facing businesses today—the lack of speed and agility of traditional software development that is hindering digital transformation initiatives around the world,” said OutSystems CEO Paulo Rosado. “We see companies struggle with this every day.”

Added KKR Director Stephen Shanley: “We believe we are in the early innings of what will be an extended period of significant growth in the low-code application development market.”

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).

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