It’s a nice problem to have: Sandy Springs-based OutSystems, a provider of rapid application development tools and services for the enterprise since its 2001 launch, is basking in the glow of 60 percent growth in subscription revenue for 2015. It has 600 customers in 33 countries, and hasn’t needed to raise any money since a Series B round nearly eight years ago. It has 394 employees worldwide, and plans to have 500 by year’s end.
Yet the road to technology company success is littered with the carcasses of those that grew themselves right into oblivion. So when your goal, as CEO Paulo Rosado puts it, is to “conquer the world” with a vision of helping organizations go 100 percent digital, the February completion of a $55 million funding round from North Bridge Growth Equity should help.
“It was time to finally get a highly reputable investor like North Bridge into the mix,” Rosado told Hypepotamus, “and with that investment we are in a very good financial situation. But partners like North Bridge and others” – such as Deloitte, McKinsey and Company and other management consultancy houses – “are expanding our network, our capacity to go to market, and also helping us cope with growth and scale.”
The $55 million will pay for the usual additions to sales and marketing teams, but a sizable portion will be set aside for research and development because it’s hard to make app development easy for those who don’t have any code wrangling experience. “These are very complex kinds of problems we’re solving. With OutSystems, it’s very, very sophisticated,” Rosado said. “It doesn’t look like it, but it’s a huge iceberg of complexity and sophistication underneath so that we can bring that ease of use for our customer, and it requires top-of-the-line R-and-D.”
Playing into the rise in low-code solutions for corporations is one advantage Rosado sees for OutSystems’ near-term future. Low-code platforms are expected to bring in $15.5 billion in revenue by 2020, according to Forrester Research. The trend has already sparked the term “citizen developers,” as in business people who take advantage of easy-to-comprehend platforms like OutSystems’ to create apps for specific workplace needs without having to hand-write reams of code. “Because of all the work we’ve been doing in usability and development environment, we can sustain the spectrum between the citizen developer and the very sophisticated developer,” Rosado said. “Our product is increasingly being used more by the citizen developers to create line-of-business apps quickly without having to bug IT.” He added that OutSystems offers a smoother handoff of those apps from citizen developers to the IT department when they get big enough for the enterprise level.
Another advantage that Rosado sees for his company is its European origins. Investors there tend to wait longer than their American counterparts before sinking money into startups, and that gave Rosado’s company time to chase bugs out of its platform. As a result, OutSystems’ product is more mature and has stood the test of time, he said. That’s going to come in handy as competitors big and small race to offer their own enterprise app, mobile app and cloud-as-a-service solutions as OutSystems has done.
After all, OutSystems’ platforms help companies build apps that work with popular software from the likes of IBM and Salesforce. Yet those big companies may want their own cut of that market.
“If you want ease of use and speed, you have to trade it off with control and enterprise grade. You’ll always pay for the big names, but more than that you pay with added services, you pay with complexity. These are companies that live in complexity,” Rosado said, pointing to long installation times as an example. “On the other hand, you have the quick and dirty platform that caters very well to ease of use, but you hit the wall almost immediately the moment you try to do something more serious. We actually combine ease of use with mission critical.”
OutSystems will continue to invest in security. Rosado said the company’s experiences with large banks and telecoms have resulted in products that integrate easily into their existing security processes. OutSystems also deals with countries where the place they store their data – the cloud platform they use – is very important. “With just the force of our expansion, we have to be flexible with the type of cloud. We have to leave that option to the customer that says, ‘I want you in (Microsoft) Azure,’ or ‘I want you in Amazon (Web Services),’ ‘I want you in this cloud that’s only particular to the Japanese market,’ and we have to take care of those requests.”
The fact that OutSystems can fulfill those requests speaks to its unique origins and technology prowess that the company has shown, Rosado said. A company that’s been around for 15 years may not meet the exact definition of a startup, but that’s okay with him.
“We appear almost as a startup, but have the maturity of a very large organization,” he said. “Today we have about two to three years of technological benefits and advantage that will give us enough time to basically just conquer the world.”