Traditional software development is performed by software engineers with formal training in computer science. This involves writing volumes of customized code in a particular language and pushing that onto a software infrastructure stack. The code writing process is getting more efficient every year through improvements in higher-level languages and the creation of new open source libraries that can be easily imported to address almost any common function. However, even with these productivity improvements, application development output is still constrained by the number of software engineers.

Enter low code development tools, which allow non-engineers with some basic technical skills to produce reliable applications that address common, repeatable functions. This is accomplished through graphical user interfaces and configuration, versus programming. Several companies have emerged that have built their entire product offering and business around this trend. Low code development is a rapidly evolving space that has implications for our software stack investing strategy.

During the dawn of the Internet, low code development represented tools that facilitated building a simple web site. Examples like WordPress, Adobe Dreamweaver and Microsoft FrontPage (long deprecated) allowed non-programmers to publish content onto the Web without learning HTML. Recently, low code development tools have become more sophisticated, working upstream from static web sites to full-fledged applications. Low code development tools have even evolved into platforms, which can facilitate both the development and hosting of these applications. Appian (APPN) is an example. Its platform supports the rapid provisioning of many types of applications, in areas like customer on-boarding, field service management and compliance. One customer example often cited by Appian is that of DFW airport. Rather than hire/allocate teams of developers to build custom mobile apps, the DFW IT organization chose to leverage the Appian platform to rapidly configure them.

DFW used Appian Cloud to build 40 applications in 18 months. With Appian, DFW employees can now run operations from a mobile tablet. For example, to optimize the customer experience, compliance requirements for the more than 200 shops and restaurants on the DFW campus are managed via the Appian mobile app. There’s even a janitorial dispatch app which alerts staff about restroom facility conditions (a top priority for travelers). 

Appian Customer Solution, DFW Airport

Appian (APPN) is a publicly traded company. I think their product offering is interesting, but I am not recommending the stock at this time. The low code development platform space is still evolving and it’s not clear to me who will be the winners. This may be a company we come back to in the future.

Another use case for low code development is data pipelining between enterprise apps. For example, a business might want new customer leads from a Facebook Leads Ad to be copied into their Salesforce or Hubspot CRM. Or, they might want customer inquiries from Zendesk to be pushed into an email or Slack channel.

Zapier makes this possible.

Zapier is an online automation tool that connects your favorite apps, such as Gmail, Slack, Mailchimp, and over 1,500 more. You can connect two or more apps to automate repetitive tasks without coding or relying on developers to build the integration. It’s easy enough that anyone can build their own app workflows with just a few clicks.

What is Zapier?

My first experience with Zapier was when I was CTO of a sharing economy marketplace. New leads for sellers on our marketplace would come to us through our web site. The Sales team wanted these leads loaded into their Salesforce CRM tool. So, one of the technically minded sales people created a “Zap” to connect our lead database to Salesforce. The Zapier service would periodically poll the database table storing seller leads. When it noticed a new row, it would copy the relevant lead information and then create a new customer record in the sellers list in Salesforce. This was all done without a developer’s help (beyond safely configuring data access).

This self-service concept is very powerful, as it extends the capability to automate repetitive tasks beyond the realm of formally trained developers. Anyone with access to a company’s SaaS apps, basic data knowledge and a web browser can create these data pipeline workflows. This means that the usage of the apps being connected can be easily harnessed by non-developers. The possible connections become exponential.

This capability has implications for the companies providing the services being connected. Primarily, if we look at the recipient side of the data send, it is likely that inbound flows and utilization can increase substantially as more and more of these low code data pipelines are created. This increased usage will translate into revenue for those companies that bill customers proportionally to usage.

Zapier provides integrations to over 1,500 “apps”. In this context, apps represent any business or enterprise software application. The majority of these are the cloud-based, SaaS apps that we all recognize. Glancing at the Top 100 Zapier integrations, we see familiar names like Google Sheets, Slack, Mailchimp, Salesforce, Hubspot, MS Office 365, Stripe and Dropbox. Many of these apps are provided by publicly traded companies. Some of those have revenue models that would benefit linearly from the increased usage.

An example of this is that the output of a “Zap” can be a communication, like a Tweet, an email or an SMS message. I recently wrote a purchase recommendation for Twilio, the largest provider of CPaaS (communications platform as a service) services. Through its programmatic API’s, Twilio makes it very easy to send an SMS message, generate an email or place a voice call.

Zapier provides a useful tool on their site that allows you to view a full list of their integrated apps, select a particular app, and then see a list of all the popular pre-packaged “Zaps” for that app.

Looking at the list for Twilio, we can see hundreds of pre-configured connections with other apps. I didn’t perform an exhaustive search, as their interface requires many “See More” click-throughs, but I surfaced at least 100 of these. Here is a short list of the most popular integrations that would generate new usage for Twilio:

  • Send new emails to an SMS message or voice call
  • Send an SMS message any time a new row is added to a spreadsheet or database table (Google Sheets, MongoDB, Office 365)
  • Have Google Calendar reminders sent to SMS
  • Receive an SMS whenever a new Facebook Leads Ad generates a new lead
  • Receive an SMS whenever a new Google Form, Gravity Form or JotForm is submitted
  • Generate a SMS or voice message for new customer orders (from WooCommerce or other e-commerce package)
  • Send SMS if it is about to rain (connected to Zapier’s own weather service)
  • Get a voice call if there is a Pingdom alert on your site

You get the idea. Most of these use cases would have required a basic script to be written by a developer in order to realize. Now, any non-developer within an organization can enable these types of notifications. This activity would substantially increase the spend on that organization’s Twilio account, as billing increases based on incremental usage.

Interestingly, we can infer competitive positioning from the list of apps on Zapier as well. If we search for Twilio and its competitors on the list of apps currently supported by Zapier, we can generate a few additional insights:

  • Twilio has the highest position by popularity of all SMS and voice communications providers
  • Only Twilio and one other company are listed in the Top 100 most popular integrations. The other company is ClickSend, which is a private company based in Australia.
  • Of other recognized competitors to Twilio in the CPaaS space, I only see Plivo and MessageBird among the list of 1,500 app integrations
  • Nexmo and Bandwidth did not appear to have an integration

Low code development will be a trend that we will continue to follow in this blog and will try to spell out its implications for investors. In the meantime, you can explore Zapier further and draw your own conclusions regarding its potential impact on other cloud based companies. Zapier was recently recognized as a Cloud 100 company by Forbes, meaning that it already has significant scale and will likely continue to grow.