The famous Wayne Gretzky quote, "I skate to where the puck is going to be," may have become a cliche in business, but it's an apt metaphor for success.
Companies win, especially in growth sectors like technology, by getting to where the market is going, not where it currently is. Appian (APPN +2.08%) is doing just that in low-code software.
The company acquired process mining start-up Lana Labs to help it in that direction. Process mining is a technology that examines what work people are actually doing in order to find repeatable processes that can be automated to improve efficiency. With process mining now a part of its software suite, Appian is offering a complete low-code platform solution that starts with process mining, then uses low-code software to write workflows that automate those processes with bots, artificial intelligence (AI), and other such tools.
It's an important step because process mining has historically been sold separately from low-code or no-code software. With this move, Appian is unifying those markets. The company held its first investor day conference on Oct. 4 to tout its new architecture and the convergence between process mining and its core low-code offering.
Image source: Appian.
Where the puck is going
Customers have been overwhelmingly pleased with the new platform, CEO Matt Calkins said in an interview with The Motley Fool. In fact, the company has notched a 99% customer retention rate over the last four quarters. Calkins believes that the company's technology was the reason retention was so high, calling it "top of the market and the personnel and services commitment also."
That loyalty gives Appian an advantage as it leads the next phase in the evolution of low code, and the company is already seeing traction with its acquisition of Lana Labs and strong customer interest in the process mining component. Calkins added:
We've got a big backlog of customers who want to use it, right away. Partners who are excited about deploying with it. So we are going as quickly as we can.
Moving into process mining is also a great way for Appian to expand its current contracts, in addition to helping it attract new ones.
Calkins distilled the new business model into one slide in his presentation, which you can see below, and said that when he shows this model to customers, "They love it and it immediately makes sense."
Image source: Appian.
What's next for Appian
Appian is a 20-year-old company, and in some ways the low-code software market has been slower to develop than other software-as-a-service areas, but the acceleration in the digital transformation during the pandemic has given the company a clear tailwind.
In its most recent quarter, revenue growth accelerated to 44%, its fastest pace in several quarters, and though second-half guidance called for moderation in its growth rate, the addition of Lana Labs will give it a boost. The early customer response to the process mining integration is also clearly positive.
With a 99% customer retention rate and a No. 1 ranking in Gartner's peer insights survey, it's clear that Appian's clients are highly satisfied, and that will serve it well as it carves out a more comprehensive market with its new low-code platform.
The company expects to announce soon that the process mining component has been rebranded under the Appian name, an important step in its customer-facing integration that will allow the company to ship that product with the rest of its platform.
Appian has estimated an addressable market of $37 billion and growing for low-code software, which is more than 100 times its revenue over the last four quarters, and the process mining integration could be a major catalyst in unlocking more of that market. Stay tuned, because it's only just getting started.
