Production ｜ Tiger Pro members
Author ｜ 石 富 元
The Chinese and American technology giants have all entered the game. The “low code” track, which is relatively unfamiliar to the public, may become the core player in opening the industrial Internet.
Let’s also say that in June 2018, the low-code development company OutSystems in the United States received a joint investment of $ 360 million from KKR and Goldman Sachs, with a post-investment valuation of more than $ 1 billion; immediately following August, low-code development The platform Mendix was acquired by Siemens for $ 700 million.
Encouraged by OutSystems and Mendix, the Chinese venture capital market has also begun to focus on low-code areas. A large number of related startup projects have “closed” the low-code label, and investment institutions have begun to make intensive shots.
Next, Alibaba Cloud launched the “SaaS Accelerator” project in March 2019, and Tencent released the “Qianfan Plan” in October. The underlying technologies of the two are low code (aPaaS and iPaaS), and “iPaaS (Integration Platform as a service) can complete the unification of interfaces, and aPaaS (application platform as a service) can precipitate a large number of industry know-hows to help developers improve development efficiency and reduce development costs. “General Manager of Tencent Cloud Pan Internet Product Solution Center and SaaS Ecological Technology Responsible Human Huang Bingqi explained to Tiger Sniff Pro.
In fact, low-code development abroad is not new. OutSystems mentioned above is a company that was established in 2002. Its earliest technology can be traced back to RAD (Rapid Application Develop) technology. But this is only a localization tool. After 2010, cloud computing matured to bring it to life, while OutSys, which was tepid before,Tems only started to take off in 2012. According to public information, in the six years from 2012 to 2017, its average annual revenue growth rate reached 41%, and the growth rate in 2018 further increased to 66%. $ 100 million.
After insight into this trend, the famous technology and market research company Forrester officially put forward the concept of low code in 2014, pushing low code development from an auxiliary tool to the business front, and then Google, Microsoft, Amazon, Oracle Technology giants such as SAP and SAP have entered the game.
It is possible to introduce the Chinese and American science and technology circles from giants to venture capital markets. Behind the extraordinary liveliness of low code, there is a worldwide problem-the increasing cost of software development, which has seriously dragged the industrial Internet and the Internet of Things forward. In the footsteps, whoever can solve this global problem will get a ticket for the next 10 years, and the low code currently looks very much like this ticket.
As an analogy, in the past 20 years, the booming consumer Internet tide has finally been called “tickets” in three areas-search, social and e-commerce, each of which has achieved three in China and the United States. The top Internet company, Tiger Sniff Pro, after research, believes that low code is likely to be an “e-commerce” in the era of industrial Internet.
But after the introduction, it feels like a low code is a technical product. It seems that it can’t beat the e-commerce, but Tiger Sniff Pro thinks that the low-code final landing form will have a high probability of being an e-commerce type. Platform. The reason for this is because Tiger Sniff Pro judges that the low-code final business model, evolution path, and competition logic will be very similar to e-commerce.
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1. The decentralized market on both sides must give birth to the platform
Taobao had an iron rule when it was founded—it doesn’t have an inventory, that is, Taobao doesn’t do its own business. Because Ma Yun is determined that if he wants to meet the rich needs of all consumers, he must rely on numerous sellers to enrich the supply side. A market with scattered supply and demand ends is the most valuable platform.
The self-employed Amazon and JD.com have also understood this principle in the process of continuously expanding categories to meet the needs of consumers with extremely long tails, so they have adopted an open platform model in the later stages of development and introduced a large number of tripartite sellers Make long tail supply.
After that, any internet entrepreneur who has the ambition to make a platform will first determine whether the market is bilaterally dispersed when choosing a direction. Meituan, Didi, Today ’s Headline, Douyin, Hungry, etc. are no different.
Speaking back to low code, its supply and demand sides are also extremely fragmented and long tailed.
Low code meets the needs of rapid development and customized development of enterprises. According to the market situation in the United States, ClickPaaS founder Hu Bai believes that small and medium-sized enterprises should buy standardized SaaS. Only large enterprises should have personalized development needs. , “Low code is tailored, it’s a luxury.”
If this is the case, the market for low code on the demand side is not a decentralized market, because after all, large companies are in the minority.
But the situation in the Chinese market is notAt the same time, according to Ren Xianghui, the founder of Mingdao Cloud, companies with a size of one to two hundred people in China already have personalized customization requirements, and they are not satisfied with general SaaS. This is also the revenue scale of China’s IT industry information technology service sector than software product sector Big reason.
The reasons leading to the strong demand for personalized development of Chinese SMEs are complex. Ren Xianghui judged that it may be because China’s SaaS is not mature enough and customers cannot be satisfied, so he hopes for customized development. However, some people in the industry believe that the reason is that China’s market economy has been developing for a short time, and various industries have not yet formed a common practice. The degree of individualization of each company’s business is very high, and China has directly passed the information technology and entered the Internet era. Affected by the rapid iterative culture of the Internet, Chinese SMEs want to build their own personalized digital capabilities.
“The earliest low-code tools met the needs of enterprises to reduce costs and increase efficiency in software development, but in the current rapidly changing market environment, the main value of low-code has become how to help corporate customers respond to changes quickly Iterate on business systems and management systems. “Founder Xu Pingjun of Orzhe told Tiger Sniff Pro.
In short, regardless of the reason, it is a fact that there are a large number of personalized software requirements for SMEs in China, so the demand-side market is a very discrete long-tail market.
Then the supply side. Because the needs of Chinese enterprises are too personalized, the Chinese software industry has been unable to incubate very versatile products for many years. With long-term customization services as the mainstay, enterprises have been very fragmented. Among them are ISVs (independent software development) that specialize in different fields or industries. Companies) and SaaS vendors, SI (system integrators) and software development outsourcing companies distributed throughout the region, and a large number of individual developers with different skills, etc., together they constitute the supply-side market structure.
Why has there not been a platform for the software market that has been scattered on both sides? This is because the platform needs to meet another condition.
2The platform must be able to set standards to significantly reduce transaction costs
E-commerce is only a means in the early stage. Low code is currently only a tool, but both of them have a hidden skill, that is, will establish a uniform standard for the entire industry in the process of being used.
A popular saying in the business world is, “Four-tier companies make products, Third-tier companies sell technology, Second-tier companies make brands, and first-class companies set standards.”
E-commerce in the early days was just a sales tool that could sell goods online, and anyone could use it. Brand commercial e-commerce has established its own brand independent station, some vertical players have made vertical e-commerce, and Taobao has established a comprehensive shopping website. The difference is that the former two only use e-commerce as a means, but Taobao uses electricity. To set industry standards.
The 7-day no reason to return or exchange, third-party transaction guarantees, and fake one-off compensation are all just Taobao’s own platform rules. They are to eliminate mutual distrust between buyers and sellers in the early stage of e-commerce, but these rules have reshaped China. The e-commerce and even business credit system eventually became a universal standard for the industry (some even entered the e-commerce law), which greatly reduced the transaction costs of online shopping.
The same is true for low-code. The potential greatest value is the ability to shape the interface standards and technical standards of the enterprise software market. This is also the original intention of Tencent Yunqianfan to be a SaaS technology alliance.
In fact, for the market of enterprise software, there has been a platform business model for a long time. For example, the major cloud vendors (Alibaba Cloud, Tencent Cloud, etc.) and the traditional software giants (UFIDA, Kingdee, etc.) are transforming their own clouds. The market not only provides various SaaS, but also provides various APIs and customized services. However, such platforms have not achieved disruptive development. The fundamental reason is that they have not solved the problem of high transaction costs between the supply and demand sides-the technology and interface standards are not unified. Software is difficult to integrate and cannot meet the needs of the enterprise’s digital transformation. General SaaS has insufficient personalization definition capabilities, while pure code custom development services are too risky and costly for SMEs.
Alibaba Cloud Market Segment
The actual scenario is that companies often buy ERP from vendor A, CRM from vendor B, OA from vendor C, etc., but when companies want to import user data from CRM to ERP, due to the interface between applications Closed, companies can only manually extract data from CRM into Excel, and then manually enter ERP (except for a digression, this is the reason why RPA has been on fire recently).
If an enterprise develops a project or purchases SaaS on a low-code platform, all the underlying technical standards and interface standards of the application are unified, and the enterprise can easily complete multi-application integration from the root. The problem of chimneyization of IT systems has been eliminated.
Since low code and e-commerce are platform logic with bilateral network effects, once the platform is built, its barriers will be very high, but it is very difficult to build, because the supply and demand sides need to be synchronized. , And in the end, the flywheel turned first.
Therefore, Tiger Sniff Pro judges that there may be a war of burning subsidies in the low-code field in the future, because giants and capital have already entered the market, which will accelerate the market to mature.
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3. The subsidy war is not impossible
If the bilateral network effect platform is to be launched, the best strategy is to move users on one side to the platform and then attract other users to join. Historical experience shows that subsidizing users on one side is the most direct and effective strategy.
Geoffrey, the author of the theory of bilateral markets, mentioned