Appian (APPN 5.25%) has long been a leader in low-code software for the enterprise market.
These are large customers, generally with over $1 billion, that can leverage Appian's premium low-code product suite. That strategy has delivered Appian steady growth over the years as the company posted 37% cloud subscription revenue growth in the first quarter, with overall revenue increasing 29% to $114.3 million.
With a shortage of programmers and demand for low-code solutions above capacity, Appian is taking a number of steps to expand the market for its low-code software to drive the company's long-term growth. Here are a few ways the company is making it easier to grow its business.
Image source: Getty Images.
Low code for all
At its recent Appian World conference, the company announced a new program, #lowcode4all, to expand the low-code workforce and give in-demand tech skills to people like students and military veterans. It's a one- to two-month curriculum that will teach participants low-code technology. When they finish the course, they earn a certificate as an Appian Associate Developer.
NASDAQ: APPN
Key Data Points
The program will help fill a significant need for programmers in the market. In the U.S. alone, there's a shortage of 1.4 million software engineers, and the labor market has been particularly strained during the Great Resignation as the pandemic has sparked a cultural and economic shift in the way Americans think about work. Appian's partners, the consulting companies that help customers with their deployments, are also excited about the program as they need more low-code programmers.
Appian Portals
Appian released Appian Portals in the first quarter, which allows external users to access Appian applications without a log-in. Portals adds value to Appian and its customers by allowing the program to be shared with more users. For instance, one oil and gas company is now processing forms from tens of thousands of contractors through Appian Portals. Without Portals, that wouldn't be possible. By exposing new users to Appian, Portals also acts as its own sales tool.
On the earnings call, CEO Matt Calkins said, "I would say Portals may be the most anticipated feature we've ever shipped. It's pretty straightforward and yet it's exceptionally popular. It was a simple thing to create. It's a simple thing to deploy and yet customers really want this in order to expose their applications to external users who don't have log-ons and who might all log on in the same five minutes one day."
Like low code for all, Portals helps make Appian more accessible, and it's been a big crowd-pleaser with its customer base.
Tapping the mid-market
Appian has historically focused on enterprise-level customers, but it is increasingly tapping into the mid-level market, which it defines as companies with $50 million to $1 billion in revenue.
The company was named Customer's Choice by Gartner for mid-market (and enterprise) companies for the second year in a row, and the company is growing its business in the mid-market segment. In an interview with The Motley Fool, Calkins said, "As our product becomes more accessible, more empowering, I think that will build a greater following among midsize companies." The focus on mid-market clients fits in with its broader focus on accessibility, enabling more people to work in low code and democratizing the industry.
Appian issued its characteristically conservative guidance for the rest of the year, calling for 32% to 33% cloud subscription revenue growth and overall revenue growth of 23% to 24%, but the company sees no headwinds from a potential recession at the moment. Even if there is a recession, the company should be well positioned as its product offers customers a way to save money and time. Appian has always been a customer-funded company, so its culture is lean by default.
A downturn also shouldn't knock low code off of its growth path, as research firms like Gartner are forecasting 65% of app development to be in low code by 2024. As the low-code cloud stock focuses on expanding its market, Appian should be well positioned to capitalize on the new opportunity.
