Low-code has been a hot topic for some time now. The idea of being able to create exactly the customized solution or dashboard that you want and need, without the need to possess deep programming skills, has gained a real foothold.
Among the big PLM players, Siemens took an early lead when they bought the low-code developer Mendix. It didn’t take long for Siemens Digital Industries’ CEO Tony Hemmelgarn to perform a thorough evaluation of Mendix, and come to the conclusion that the company’s low-code could play a major role in Siemens’ Xcelerator portfolio, which in turn is linked to the IoT operating system MindSphere. The latter solution is the engine that picks up and manages data, while Mendix provides visual presentation and accessibility.
Given this, it may seem surprising that the ERP giant SAP—which not so long ago made an unexpected deal with Siemens to resell their PLM solution Teamcenter—now announces that it has bought its own low-code solution in the form of the small Finnish company AppGyver. This company is something of a pioneer in platforms where you can build applications for web and mobile use without code development.
The question now is: why is SAP buying AppGyver? On the one hand, they already had a partnership with Mendix, even before the Siemens deal; on the other hand, the solution can also be a result of the collaboration agreement found in SAP's price lists regarding the resale of Siemens PLM products. Furthermore, Mendix’s partnership with SAP takes aim at supplying a tightly integrated LCAP (Low-Code Application Platforms) with SAP HANA.
SAP’s CEO Business Technology Platform Core, Michael Weingartner, provides a simple answer:
“AppGyver helps us to expand our no-code capabilities and establish a comprehensive offer in this area,” he says. "Going forward, we can deliver a full range of simple and integrated application development tools that allow customers, partners and our own teams to enhance process automation and further improve the experience for users of SAP applications.”
Adding AppGyver's solutions to SAP’s own no-code capabilities, it facilitates the creation of workflows, forms, automated robotized processes (RPA) and easier handling of cases, Weingartner asserts.
Makes Life Easier For "Systems of Records"
This indicates a reasonable answer for why SAP bought AppGyver, although you have to drill down one step further to understand the deeper value.
Today we often talk about "systems of records," abbreviated SOR. These systems are stable and comprehensive backbone business systems solutions, such as ERP, CRM or PLM. The thing about this type of complex platform is that you do not want to go in and change or update them too often because of that complexity. Here, solutions such as Mendix and what AppGyver develops—apps that allow you to easily create your own dashboards, presentation views and links to programs without coding—play important and facilitating roles. Low-code provides quick platform extensibility and can be used to create and facilitate customized consumption of data from the SOR and other related sources. In short, it’s a builder of bridges to easily connect more people, while at the same time limit access to exactly what is needed. In the case of Mendix, you only need to drag-and-drop to form a customized dashboard, as an example.
Businesses change quickly and often in the dynamic world we live in today. This means that to constantly sit and change the complex coding of your company’s backbone systems whenever the business requires new functions is not something you want to do. With solutions such as Mendix and those from AppGyver, it is easy to build on your "system of records" in the app layer.
Huge Growth Potential According to Analyst Gartner
This is attractive to companies and organizations all over the world, and analyst Gartner predicts that, “By 2023, over 50 percent of medium to large enterprises will have adopted an LCAP (Low-Code Application Platform) as one of their strategic application platforms.”
According to Gartner the formal definition of an application platform is “a product or suite of products that offers development, deployment and execution capabilities for any of user experience, business process, business logic and data.”
In this context, “An LCAP is an application platform that supports rapid application development, deployment, execution and management using declarative, high-level programming abstractions such as model-driven and metadata-based programming languages, and one-step deployments. LCAPs provide and support user interfaces (UIs), business processes and data services.”
Real world results also confirm the explosive trend; Siemens, for example, sees a huge commercial potential. For Mendix, they expect that annual doubling of sales volumes may be achieved. Even though it is currently estimated to sell for, let’s say, $100 million per year, doubling the revenue volumes means that in just a few years Mendix will become a powerful contributor when it comes to revenue generation in the company.
In this context, let’s also be clear that Microsoft already plays a leading role in the LCAP arena with its Power Apps, which includes entitlements for Power Automate and the Common Data Service. Together, these form part of the Power Platform, which also contains Power BI for business analytics and Power Virtual Agents for low-code chatbots. Generally the analyst notes that, “Microsoft’s operations are in locations worldwide. Its customers are in a variety of industries and of varying sizes.”
Bottom line is that they are growing, and according to Gartner, it will not be uncommon for companies, at least of a certain size, to have not just one low-code platform, but several.
“The market for low-code application platforms continues to grow with a high level of interest from Gartner clients in “low code” for both application development and other application-related uses such as integration and AI services,” Gartner concludes.
With prospects like this, it is hardly surprising that SAP also wants its own low-code capacity in-house.
“With AppGyver, we can in the future deliver a complete range of simple and integrated application development tools that enable customers, partners and our own teams to improve process automation and further improve the experience for users of SAP applications,” commented Weingartner, in a statement on the announced purchase of Finnish AppGyver.
Becomes a Part of SAP's Business Technology Platform
With this acquisition, SAP can better help customers and partners to effectively adapt their IT systems to specific needs and optimize the usability of their applications.
AppGyver's solutions will be part of the SAP Business Technology Platform, indicating that SAP buys competence rather than a product. They will broaden SAP's business process information offering and according to Weingartner, "be a complement to SAP's low-code offering from our partner Siemens and their Mendix."
That being said, AppGyver regards its Pro Composer platform as, “the world's first professional no-code platform, enabling you to build apps for all form factors, including mobile, desktop, browser, TV and others.”
The company’s founder and CEO, Marko Lehtimaki, discussed the SAP purchase in a blog: “What happens now,” he wrote. “There will be no immediate changes to the product or anything else — you can continue to develop your existing and future projects as before. Everyone in the current AppGyver team will continue on, building the product and driving the vision; joining forces with a truly global technology powerhouse simply enables us to march towards our goals with orders of magnitude more resources. The platform development will progress much faster, and being part of SAP means you can count on us to not go away.”
He concluded that in the future, there will be integrations with SAP products, which will bring new opportunities to AppGyver’s enterprise customers. “In addition, we’ll continue to have exciting features and improvements in our product roadmap for indie and enterprise developers alike.”
A qualified guess is that SAP will orient its low-code work towards the ERP side, while Mendix will take care of the PLM and IoT-related pieces.
It can be added that AppGyver was founded in 2010, is headquartered in Helsinki, Finland and has 18 employees. SAP and AppGyver do not disclose the purchase price or other financial details of the transaction.
A Broadening of the “Rise with SAP” Package
You can also link the acquisition strategy behind AppGyver to a broadening of the recently announced "RISE with SAP” package, in which the SAP Business Technology Platform and business process information are important parts.
"The new offering helps companies make holistic changes that make them resilient, agile and intelligent," SAP writes of this package, which is more likely to have the overall goal of accelerating business around the world's companies and their digitalization.
For obvious reasons, life for the players in the ERP world has not been easy in the last twelve months—possibly with the exception of Swedish IFS, which led to surprisingly strong growth during the period. But for most, not least of which were SAP's partners, it has been difficult. They have bounced around between the desire to maintain 'business as usual' operations and speed up their digital roadmaps or to observe a certain caution when customers have tended to drag out the projects or postpone them altogether.
A recent membership survey in one of SAP’s UK user communites concluded that 30 percent of the organizations had delayed their plans to move to SAP S/4HANA due to the COVID-19 pandemic.
With this as a backdrop, it is not surprising that "Rise with SAP" is welcomed as a package that can help and inspire customers’ transition of their businesses by moving to the cloud in a sustainable way.
And to make life for companies in the midst of digitization processes even easier, AppGyver can help. No-code or low-code—the ability to build and deploy apps quickly and efficiently is the main point. Either way can prove to be a game-changer.
The traditional approach to application development cannot keep pace with enterprise demand for rapid transformation and productivity gains.
“Skilled developers are scarce, but in high demand. And those who are available are more likely to spend the majority of their time maintaining code. As a result, business users are being increasingly involved in enterprise app development,” low-code developer Pega System’s founder and CEO once said.
I couldn’t agree more.