Low-Code Leader OutSystems Steps Up European Push
Low code development platforms are an increasingly attractive prospect for organisations under pressure to accelerate the launch of new apps, while easing the pressure on stretched internal development teams.
The dynamism of this market was underlined this month by Siemens’s $730m purchase of Mendix, in a move designed to help the manufacturing giant speed up and improve the development of apps for the Mindsphere IoT platform.
Meanwhile, Mendix competitor OutSystems has just closed a $360m funding round, taking its valuation past the $1bn mark. OutSystems’ annual revenue runs past €100m, and revenue from software subscriptions rose 63% last year.
PAC recently caught up with Willem van Enter, the company’s VP of the EMEA region, to hear more about the company’s plans for the European market, after it opened its first office in Germany. OutSystems’ heritage is European, having been set up in Portugal by current CEO Paulo Rosado back in 2001. Lisbon remains its head office to this day, with half of sales coming from Europe, although it also has fast growing operations in Atlanta and Boston. The company’s 800 employees support more than 1,000 enterprise customers, with key European logos including AXA, Randstad, Zurich Insurance and the UK National Health Service.
Low code platforms initially found their foothold in many businesses as a way to improve the development of mobile applications. One of the challenges that organisations ran into with their mobile apps was ensuring that they are constantly innovated and updated in order to meet the ever-changing needs of both the business and the customer. OutSystems’ platform is designed to help internal teams accelerate development cycles by five to ten times, making new functionality available at short notice. Because the platform is based around a more visual approach to development, with users able to drag and drop the functionality they need, customers do not require deep coding skills to use it.
Van Enter says that what sets OutSystems apart from other mobile development platforms is that it enables integration between new apps and existing back office systems such as SAP. Customers are also increasingly using the platform to modernise their legacy landscape, with one example being an insurance company carrier replacing a core pensions system and re-writing the complete functionality on the OutSystems platform.
As OutSystems extends its reach into the legacy world, it is increasingly leaning on its 250-strong partner ecosystem, which Van Enter says are now involved in more than 80% of the company’s projects. Partners such as Atos, Cognizant and Deloitte provide the industry domain expertise to help customers to optimize their business processes as part of the development process, and ensure that regulatory demands are met. They also help OutSystems to expand its developer community beyond its current level of 167,000. Global partners such as Atos are setting up centres of excellence, where RPG or Cobol developers are retrained on the OutSystems platform, and younger development talent is harnessed.
Van Enter says that the company’s competition comes from three sides. Firstly, OutSystems has a growing number of competitors in the low code platform space including international players such as Microsoft, Oracle, Progress and Salesforce, as well as specialists such as Appian and Betty Blocks. Secondly, prospects can sometimes decide to go with off-the-shelf SaaS or on-premise packages that meet some of their requirements, but usually require a level of customisation. Lastly, OutSystems also runs into businesses that opt for a hand coding and framework approach. Van Enter admits this can still support rapid mobile app development, but has its limitations in enabling internal teams to constantly deliver updates and enhancements.
Like all platform providers, OutSystems will need to continue to extend its reach beyond the traditional IT and development leadership and into the line of business leaders that are driving the digital agenda. In new markets such as Germany, OutSystems ability to integrate into SAP will be crucial to its success, and it will also need to continue to diversify its partner network in central Europe to tap into the integrators and resellers serving the important mittelstand community.
There is huge potential for OutSystems to tap into the growing need from European organisations to unchain themselves from their ageing core systems. A recent PAC study found that close to 60% of companies view legacy applications as a barrier to digital transformation, and in sectors such as financial services and government, businesses can no longer wait two or three years for costly rip and replace programmes.