Will Appian Survive the Generative AI Revolution?

Appian is a successful business in the “low-code” space. They pioneered the concept of low-code. Many businesses rely heavily on their technology and have to hire less engineers as a result.

The basic bull case for Appian, and the tailwind at their backs, is that developers are getting increasingly scarce. Therefore, it makes sense to give more low-code tools to non-developers.

But generative AI is potentially disruptive to many companies who are more “old-school” AI. Low code feels a bit old school. Anything before generative feels pretty old school.

Also, there are just a lot of unknowns with AI. Some even think it’ll destroy the world. Even if you don’t think that, you might think it will completely disrupt a lot of existing businesses. Will Appian be one of them? Or will the increasing demand for automation function as more wind in their sails?

What exactly is Low Code?

Low code is a development approach that focuses on visual, drag-and-drop tools and components to create applications with minimal manual coding. It allows users to build applications quickly and efficiently by providing pre-built templates, reusable modules, and easy integration features. Appian is a platform that utilizes low code development to enable users to design and deploy customized applications without extensive programming knowledge.

What is the difference between Low Code and Generative AI?

Low Code platforms enable users to design and develop applications with minimal manual coding. These platforms provide visual interfaces and drag-and-drop tools to build software applications quickly and efficiently.

Generative AI refers to systems that can generate new data, images, text, audio, or other content based on patterns and examples in the training data. These systems can create original and unique content without direct human input by learning from large datasets.

How is all of this a threat to Appian?

There are simply a lot of unknowns with AI. While Appian has carved out a niche by enabling businesses to develop applications with minimal coding, the advent of generative AI could disrupt this model profoundly.

Accelerated Development Cycles

One of the primary selling points of Appian’s platform is its ability to accelerate the development cycle by reducing the need for extensive coding. However, generative AI can take this a step further. AI models, especially those trained on vast datasets of code and application development patterns, can potentially generate not just snippets of code but entire applications or workflows based on simple descriptions provided by a user. This capability could lead to an even more drastic reduction in development times, outpacing what is currently possible with traditional low-code approaches.

Democratization of Application Development

Appian’s platform democratizes application development by enabling users with minimal coding skills to build complex applications. Generative AI could extend this democratization even further. Advanced AI tools could allow users to describe functionality in natural language, which the AI could then convert into a fully functioning application. This could lower the barrier to entry for application development even more than low-code platforms have already done, potentially siphoning off a segment of Appian’s target market who are attracted by the promise of even simpler tools.

Cost Efficiency and Scalability

Generative AI could also impact the cost structure of developing and maintaining applications. AI has the potential to automate more of the maintenance and update cycle by predicting and integrating new features or by optimizing the code for performance improvements without human intervention. This level of automation could make AI-driven platforms more cost-effective compared to low-code solutions, which still require human oversight and input, particularly in the areas of customization and maintenance.

Competitive Landscape

The threat to Appian also comes from how quickly competitors might integrate generative AI into their products. If competitors can offer similar low-code benefits but with enhanced AI capabilities that streamline the development process even further, Appian could find its current offerings becoming less competitive. This is particularly pertinent as major tech companies with deeper pockets and more substantial R&D capabilities explore the intersection of low-code development and AI.

Intellectual Property and Innovation

Lastly, the integration of generative AI into the application development process could shift the focus from platform-based innovation to data-driven innovation. Companies that control more extensive and more detailed datasets could train more effective models, thus leading to better and more efficient application generation tools. Appian will need to compete not just on software capabilities but also on the AI and data fronts, potentially requiring shifts in strategy and investments.

So even though Appian currently holds a strong position in the low-code market, the rise of generative AI presents a slew of challenges that could disrupt its business model. To maintain its market position, Appian may need to innovate and possibly integrate more AI-driven features into its platform, ensuring it can compete on the new frontier of application development technology.

The Good News

The good news is that Appian is working on staying ahead of the generative curve, and using it to their advantage.

Here are some developments and initiatives that demonstrate Appian’s efforts to incorporate AI into its offerings:

1. AI-Driven Intelligent Document Processing (IDP): Appian has integrated AI capabilities to enhance its Intelligent Document Processing. This feature uses AI to automatically extract, classify, and process data from unstructured documents. This automation extends beyond traditional RPA by employing machine learning models to improve accuracy and efficiency as the system processes more documents.
2. Appian AI: Appian has introduced a suite of AI services powered by Google Cloud’s AI and machine learning capabilities. This integration allows users to implement powerful AI features such as sentiment analysis, image recognition, and language translation directly into their applications without deep expertise in AI. This move significantly lowers the barrier for Appian users to enhance their apps with AI functionalities.
3. Process Mining: Appian has been enhancing its process mining tools, which utilize AI to analyze business processes and identify inefficiencies and bottlenecks. By automatically discovering models of common processes within the organization, Appian enables users to optimize workflows and improve operational efficiency using data-driven insights.
4. Low-code Data Science Features: Appian’s low-code platform has been increasingly focusing on enabling not just application development but also facilitating data science tasks. By allowing users to integrate machine learning models into applications, Appian is making it easier for businesses to deploy predictive analytics and other AI-driven insights into their day-to-day operations.
5. Collaboration with AI Industry Leaders: Appian has partnered with leading AI technology providers like Google Cloud and AWS to seamlessly integrate their AI services. This approach allows Appian’s users to leverage established AI models and cloud services, enhancing the functionality of the applications they build on Appian’s platform.
6. AI-Powered Decision Making: Appian has introduced features that use AI to enhance decision-making within workflows. For instance, by integrating with AI-based decision engines, Appian allows for more sophisticated, data-driven decision logic in applications, supporting complex scenarios that require adaptive, real-time decision-making.
7. Enhanced User Experience with AI: Appian’s focus on improving user experience through AI includes using natural language processing (NLP) to make interfaces more intuitive and responsive. For example, Appian’s interface can interpret natural language queries, allowing users to interact with their apps more naturally and efficiently.
8. Continuous Learning and Adaptation: Recognizing the importance of staying current in AI, Appian has committed to continuously updating its platform with the latest AI advancements. This includes regular updates to its integrated AI capabilities and offering training and resources to help developers stay up-to-date with the latest AI trends and techniques.

In short, they are working on it. We do currently have confidence in this organization to innovate.

The Bottom Line - Appian’s Unique Value Proposition

For now, the bottom line for us is that no other business does exactly what Appian does. They have a truly unique value proposition. This uniqueness stems from a combination of factors that, when integrated, provide a powerful platform for businesses seeking to optimize their operations while maintaining agility and efficiency.

1. Unified Platform for Automation and Application Development

Appian’s core strength lies in its unified platform, which seamlessly integrates business process management (BPM), robotic process automation (RPA), artificial intelligence (AI), and application development. This cohesive integration allows businesses to manage a wide range of functions from a single interface, including:

• Rapid Application Development: Appian's low-code approach enables developers and non-developers alike to build applications quickly without sacrificing the robustness or scalability. This democratization of development accelerates innovation and reduces the time to market for new features and products.
• Business Process Management (BPM): Appian is a leader in BPM, helping organizations design, automate, and optimize complex business processes. Unlike traditional BPM tools, Appian provides a more flexible, agile approach to managing workflows that can adapt to changing business needs.
• Intelligent Automation: By integrating AI and RPA, Appian allows businesses to automate complex processes that involve decision-making and adaptative responses. This goes beyond simple task automation, incorporating advanced data processing, and predictive analytics to improve efficiency and effectiveness.

2. High Productivity with Full Lifecycle Support

Appian offers end-to-end solutions that support the full lifecycle of application and workflow automation — from initial design and development through deployment and ongoing maintenance. This full lifecycle approach ensures that:

• Continuity and Consistency: There is a consistent user experience and design philosophy across all stages of application development and process automation. This continuity reduces training time and eliminates the friction that can occur when moving between different tools.
• Agility and Flexibility: Changes to processes or applications can be implemented rapidly due to the platform’s agile nature. This allows businesses to respond quickly to market changes or internal demands without being bogged down by lengthy development cycles.

3. Deep Integrations and Extensibility

Appian’s platform is designed to be extensible, with deep integrations across a vast ecosystem of third-party services and existing enterprise systems. This includes:

• Connectivity with Major Enterprise Systems: Appian can integrate with various enterprise resource planning (ERP), customer relationship management (CRM), and other legacy systems, enabling businesses to leverage their existing investments while adding new functionality.
• Customizable Components: Users can create and share their own components or use components developed by others within Appian’s community. This fosters an environment of shared innovation and allows for highly tailored solutions.
• Robust API Access: The platform’s comprehensive API access enables businesses to extend their applications and workflows into other systems, enhancing interoperability and data exchange between disparate parts of the organization.

4. Strong Focus on User Experience

Appian places a significant emphasis on user experience (UX), ensuring that the applications created are not only powerful but also intuitive and easy to use. This includes:

• Dynamic Interfaces: Appian’s SAIL (Self-Assembling Interface Layer) technology enables the creation of dynamic user interfaces that can adapt to the needs of different users and processes, improving overall usability and productivity.
• Mobile-First Design: With a mobile-first approach, Appian ensures that all applications are usable on any device, enhancing accessibility and allowing for a more flexible workforce.

5. Commitment to Security and Compliance

In an era where data breaches and privacy concerns are top of mind, Appian provides a highly secure platform that adheres to stringent compliance standards. This is crucial for industries like finance, healthcare, and government, where protecting sensitive information is paramount. Appian’s features include:

• Comprehensive Security Features: From data encryption to access controls and audit trails, Appian has built-in security measures that protect against threats without compromising functionality.
• Regulatory Compliance: The platform is designed to help organizations meet various compliance requirements, including GDPR, HIPAA, SOX, and more, with less effort and uncertainty.

6. Scalability and Performance

Appian’s architecture is designed for scalability, supporting the needs of small teams as well as large enterprises with thousands of users. This scalability is supported by:

• Cloud and On-Premises Deployment: Businesses can choose to deploy Appian in the cloud or on-premises, depending on their needs and policies. This flexibility ensures that organizations can scale their use of Appian up or down as required.
• High Performance: The platform is optimized for performance, even for complex applications and workflows that involve large amounts of data and numerous integrations.

Appian's unique value proposition lies in its ability to offer a comprehensive, integrated solution that covers the entire spectrum of process automation and application development. By combining ease of use with powerful functionality, and ensuring scalability and security, Appian enables businesses to transform their operations and adapt to the digital age more effectively and efficiently than with fragmented or less integrated solutions.

As businesses continue to navigate digital transformation, Appian’s role as a leader in low-code development and business process automation is likely to become even more critical, especially as they continue to enhance their platform with the latest AI and machine learning capabilities.

Appian could be the next Salesforce or ServiceNow - in its own niche

Enterprises will need help implementing these technologies for decades to come. We like Appian’s odds of becoming a Salesforce-size business 30 to 50 years down the line.

The problem with many piecemeal AI solutions is that they’re just not going to be customizable enough. The future of AI will be that you don’t need as much out of the package software. You are more likely to create your own solution as the barrier to doing so is lowered. All things equal, you want your own solution. Not just something out of the box in the cloud. The trend will swing back that way. And Appian will help do that.

Appian’s advantage is that nobody else does exactly what it does. It could potentially have a significant niche alongside Palantir, in the race to transform the way enterprises work with AI.

That said, the odds are just that — odds. It’s not a guarantee. Generative AI poses a significant risk to Appian in the long term. But they’ve got plenty of time, and revenue growth, to figure things out.