Breakdown: The Very Profitable Future of Low-Code?

Increasing demand for software services of any kind, combined with a relatively short supply of workers capable of delivering them, has put low-code platforms in a very promising position.

But the landscape has changed dramatically since low-code became popular among software development teams. Is it as promising as it once was or are better options already available in the market?

The numbers: The low-code and digital process automation (DPA) market reached US$13.2 billion by the end of 2023, a 21% jump from its size in 2019, according to an analysis by Forrester. 

• Forrester expects the low-code market to continue growing at a steady pace (around 21%) until 2028, reaching US$30 billion.

The reasons: Forrester attributed this growth to the “institutionalization” of citizen development, a business strategy which pushes non-IT areas of an organization towards tasks that were once regarded as unique to IT. Low-code platforms and other technologies have allowed for this to happen.

• According to Forrester’s own research, 87% of software devs in business already use low-code platforms to some extent in their work.

• Gartner forecasts that 65% of app development activity will be done in low-code platforms by the end of this year.

• In a survey by software development firm Evoke Technologies, 83% of respondents (tech leaders) said that low-code is “living up to its promises”.

Bridging the gap: Low-code platforms promise to solve two of tech’s main problems today: high costs and the low availability of talent. Plus, they accelerate development cycles.

• Respondents of Evoke’s survey pointed to lower costs, speedier updates and reduced need for expertise as some of the most appealing perks of low-code. 

• However, one of the key advantages identified was the improvement in collaboration between the business and tech sides of organizations.

Flashback: At NSAM, we’ve been hearing about the advantages and potential of low-code since at least Nexus 2022. 

• “It’s not one-size fits all technology, but it lets that talent get experience working with customers, talking to customers, learning how to architect code”, said Ashish Patel, Founder and CEO at Simpat Tech, during a panel at 2022’s Nexus conference. 

• “Then we can train them into being in larger projects. We’re really embracing low-code/no-code, specifically around power platforms,” he added.

New tech: The rise of GenAI copilots might throw the future of low-code platforms for a spin. Forrester itself has forecasted the rise of what it terms app generation (AppGen) platforms, which “integrate the steps of software analysis, development, security, testing, and delivery […] all while incorporating the principles of agile and DevOps along the way.”

• A recent report by GitHub found that 88% of devs in its platform reported improved productivity when using AI copilots to code. Respondents say they accept around 30% of the code suggested by the machines.

• A report by Everest Group shows that 33% of business leaders see “high potential” for code generation in GenAI tech; 45% are deploying pilots for GenAI code generation in their organizations, and 11% are already in the scaling up phase.

• Microsoft recently launched a version of its AI copilot which promises to “transform low-code development”.

Adding; not subtracting: Though some see AI copilots as a technology that might displace low-code platforms, Forrester sees it as a boon.

• The firm predicts the low-code market will reach US$50 billion by 2028 if citizen development and “AI-infused platforms” gain more popularity.

Caveat: In spite of its optimism for AI copilots, GitHub identified “disconcerting trends for maintainability” in their use. Specifically, a rise in “code churn” –how much reverting and updating must be done to lines of code two weeks after they were authored–, which is expected to double by 2024 compared to the “pre-AI baseline” of 2021. 

• Prasanth Reddy, Sr. Director of Product Management at low-code platform WaveMaker, told Forbes that AI copilots tend to be messier and lack the debugging tools available in low-code.

NSAM’s Take: We can’t speak to the accuracy in Forrester’s –or other firms’– numbers. What’s clear, though, is that low-code platforms will continue to grow in popularity as demand for software services remains high and the supply of talent is unable to properly meet it.

Regarding the potential “rivalry” between low-code and AI copilots, we’ll say that “two cakes are better than one cake”. We can see both technologies coexisting within an organization, fulfilling similar but still distinctive, context-dependent functions.

Perhaps the most interesting perk of low-code platforms is that they can allow for better communication between IT and other areas of an organization. So much has been said about the disadvantages of “siloing”, particularly when it comes to an increasingly crucial component of business operations such as tech. Low-code promises to provide at least another patch of common ground for IT teams and the rest of the organization to stand on.

It’s difficult to see low-code –or AI copilots, for that matter– solving the talent shortage that everyone’s enduring in tech. We don’t see these technologies replacing low-skill devs outright. They might, however, allow for a smoother, faster transformation of non-techies into techies. Some nearshore providers –ITijuana among them– are already hunting for non-software engineers in hopes of turning them into programmers and software devs. There are enough examples out there of professionals from non-IT related areas breaking into the industry.

For nearshore staffers and developing firms, the “democratization” of coding could serve as a prime reason to aim for even higher-value services. Top executives in the region already worry about their respective countries remaining in the “low-cost pit” for too long and hope for actual innovation to happen soon.