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Beyond the Hype: The Hidden Price Tag of Low-Code/No-Code Platforms

Updated: Dec 2, 2023


A pile of one dollar bills on the table

 

In-depth analysis of Low-Code/No-code platforms price structure


Low-code platforms, hailed for their user-friendly interfaces, have simplified application development, making it accessible even to those with limited coding skills. However, an intricate analysis reveals a complex cost structure and an even more complex one for the long term price of low-code/no-code platforms. The allure of these LCNC platforms often overshadows a critical aspect: the true price of customization. This article aims to uncover the cost layers of LCNC platforms, revealing the intricate balance of initial convenience against long-term financial and strategic considerations. We delve into the nuances of ongoing maintenance costs, the challenges of adapting to evolving organizational needs, and the hidden pitfalls of vendor dependency.


Moreover, we contrast the flexibility and scalability of traditional coding methods with the apparent simplicity of LCNC solutions, offering a holistic view that goes beyond the initial appeal. Our exploration is enriched with real-world case studies, expert insights, and an in-depth comparative analysis, providing a comprehensive understanding for decision-makers navigating this crucial aspect of digital strategy.


As we unravel these layers, we offer a guide to understanding not just the immediate benefits but the comprehensive, often hidden costs of adopting LCNC platforms – a key consideration in shaping the future of digital infrastructure in modern organizations.


Small setup price comes with the price of ongoing maintainance demands


Often perceived as minimal, initial setup costs can escalate when advanced features or integrations are needed. The ease of initial deployment masks the ongoing maintenance demands – regular updates, bug fixes, and adaptation to changing business needs, all of which require time and resources. Let's try to understand this further, in the context of cost:


  1. Advanced Features: Basic LCNC functionalities cover standard operations, but complex business processes often require advanced features. Implementing these features necessitates extra configuration, possibly additional modules or tools, and increasing costs. Depending on the complexity, implementing advanced features could require additional developer hours, potentially costing thousands of dollars annually per FTE.

  2. Integrations: Integrating LCNC platforms with existing systems (like CRM ERP) often require specialized connectors or APIs (although advertised as "ready-to-go)". These integrations are crucial for seamless workflow but can be complex and costly, particularly if they require custom development. Depending on complexity, custom integrations can be expensive, ranging from tens of thousands of dollars to hundreds of thousands per integration annually. 

  3. Ongoing Maintenance: Initial ease of deployment can obscure the reality of continuous maintenance. LCNC platforms, like all software, need regular updates to stay secure and functional. Addressing bugs, ensuring compatibility with other systems, and updating features to meet evolving business requirements demand ongoing technical support. Maintenance costs, including updates and bug fixes, could range from 12% to 35% of the initial development cost annually, translating to a significant amount per FTE.

  4. Resource Allocation: Regular maintenance and updates require dedicated personnel time or external consultancy services. This ongoing investment in human resources adds to the operational costs over time. The price for dedicated personnel or consultancy services can vary, but hiring a specialized part-time developer or consultant can cost anywhere from $50,000 to over $150,000 per year per FTE.


Low-code/No-code business app customization, but with limitations and vendor lock-in


business app customization costs

Customization, a selling point of low code/no code platforms, has its limitations. Complex functionalities still necessitate traditional coding, limiting their utility in more sophisticated projects. Case studies from various industries illustrate these points vividly. A retail company, for instance, initially benefited from the rapid deployment of an LCNC-based inventory management system but faced challenges in scaling the system to match its growing product range and customer base.


  1. Customization Extent: LCNC platforms offer a range of pre-built components, but their ability to handle highly specialized or complex tasks often needs to be improved. Customization beyond basic configurations can require additional coding or third-party tools. Depending on complexity, advanced customizations require third-party tools or professional services ranging from a few hundred to several thousand dollars.

  2. Complex Functionalities: For advanced data processing, intricate algorithms, or unique business logic, LCNC platforms can fall short. Traditional coding is often necessary to bridge these gaps, adding to the project's complexity and cost. Incorporating standard coding to supplement LCNC limitations can lead to additional development costs, potentially increasing the budget by 25-50%.



 

Read more about the no-code platforms


 


Another potential cost of customization with LCNC platforms is the risk of vendor lock-in. Third-party vendors provide many LCNC platforms, and organizations that use these platforms may become reliant on the vendor for support and maintenance. This can make it difficult and expensive to switch to a different platform or vendor if the organization's needs or preferences change. Additionally, if the vendor goes out of business or discontinues the platform, the organization may need to completely rebuild its custom solutions from scratch, which can be a significant undertaking.


Vendor lock-in with low-code platforms presents several risks and costs:


  1. Transition Costs: If a company decides to switch platforms, significant costs are incurred in migrating data, applications, and workflows. This can include expenses for new software licenses, data migration services, and potential downtime. The migration costs can vary significantly based on the size and complexity of the business application, going from hundreds of thousands of dollars to potentially millions. It can range from $100,000 to $1,000,000 or more, depending on the size and complexity of the business and the platform.

  2. Strategic Flexibility Impact: Being tied to a specific vendor can limit a company's ability to adapt to new technologies or market changes. This can indirectly affect competitive edge and market responsiveness. While hard to quantify in direct monetary terms, this could result in lost opportunities or reduced competitive advantage, which can be significant over time.

  3. Hidden Costs: These include long-term subscription fees, costs for additional features or customizations exclusive to the vendor, and training charges for proprietary tools. These expenses can add significantly to the total cost of ownership (TCO). Ongoing subscription fees and additional features can add 20-50% to the initial cost estimates.


These are ballpark estimates and can vary enormously based on the specific platform, business requirements, and industry. Quantifying these costs requires a detailed assessment of the particular LCNC platform in use, the scale of operations, and the potential alternatives available. However, it's important to note that while exact figures can vary, the financial impact of vendor lock-in is often a substantial factor in the overall cost analysis of using low-code platforms.


Traditional coding vs low-code/no-code platform costs


business decision

Several key factors emerge in a cost-risk analysis in the ongoing debate between traditional coding and low-code/no-code (LCNC) platforms. Beyond the commonly cited aspects like development costs, time to market, maintenance, scalability, and talent availability, there are additional elements to consider:


Vendor Dependence: Especially relevant for LCNC platforms, reliance on a specific vendor can introduce risks related to pricing changes, platform stability, and support.


Customization and Integration Limitations: LCNC platforms can face limitations in deeply customized or complex integration scenarios, potentially necessitating additional traditional coding efforts.


Security and Compliance: Different approaches may have varying implications for data security and regulatory compliance, especially in industries with stringent requirements.


Long-Term Operational Impact: The selection between traditional and LCNC platforms significantly impacts long-term strategic agility and the ability to respond to market changes.


Total Cost of Ownership (TCO): A holistic view that includes initial development and ongoing operational costs over the application's lifecycle.


By considering these factors, organizations can make more informed decisions that balance immediate needs with long-term strategic goals, ensuring that their software development approach aligns with broader business objectives. Quantifiable data, such as the cost differences (traditional coding being generally more expensive in the short term but potentially more flexible in the long run) and time-to-market efficiencies , support these considerations, providing a factual basis for this crucial choice.

Factor

Traditional coding

Low-code platforms

No-code platforms

Development costs

High (up to hundreds of thousands)

Moderate (lower, tens to low hundreds of thousands)

Lower (often under tens of thousands)

Time to Market

Longer development cycles

Faster development and deployment

Quickest to market

Maintenance and Upgrades

5-20% of initial cost annually

Varies; potentially lower but subscription fees may apply

Generally lower; subscription model common

Scalability and Flexibility

Costly and time-consuming to adapt

Easier to scale and adapt but may have limitations

Limited scalability and customization options

Talent Availability

High demand, higher labor costs

Less reliance on specialized skills

Minimal technical skills required

Technology Obsolescence

High risk due to rapid tech changes

Lower risk; platforms often updated by vendors

Lowest risk; platforms typically kept up-to-date by vendors

Vendor Dependence

Low

Moderate

High

Customization and Integration Limitations

Low (highly customizable)

Moderate limitations

High limitations

Security and Compliance

High control, high responsability

Dependent on the platform, shared responsability

Dependent on the platform, shared responsability

Long-Term Operational Impact

High flexibility for long-term strategies

Moderate flexibility

Low flexibility

Total Cost of Ownership (TCO)

Potentially high due to ongoing maintenance and scalability costs

Lower initial costs but can increase with scalability and customization

Lower initial costs but may increase with additional features and scalability

This table now provides a more comprehensive view of the cost and risk factors associated with each development approach, aiding in a nuanced decision-making process.


Industry analysis and experts insights


According to a report by IDC, the worldwide low-code, no-code, and intelligent developer technologies market is expected to grow at a compound annual growth rate (CAGR) of 25.2% from 2022 to 2026. The report also predicts the market will reach a total revenue of $22.6 billion by 2026. Another report by Statista states that the global low-code platform market is expected to reach approximately $65 billion by 2027. In addition, McKinsey has identified low-code/no-code platforms as one of the top technology trends for 2022.



Conclusions


Several key insights have emerged in concluding our exploration of the cost-risk analysis for traditional coding versus low-code/no-code (LCNC) platforms. While LCNC platforms offer appealing upfront cost savings and swift deployment, they bring hidden complexities, particularly in customization and vendor dependency. These include potential higher costs for advanced features, complex integrations, ongoing maintenance, and the strategic risks associated with vendor lock-in. On the other hand, traditional coding offers greater flexibility, scalability, and control over security and compliance despite its higher initial investment and longer time to market. Ultimately, the choice between these approaches should consider the total cost of ownership and align with long-term strategic goals. This decision is crucial in today's rapidly evolving technological landscape, underscored by significant market growth projections and industry expert insights. Organizations must weigh immediate benefits against future constraints and costs to effectively navigate their digital transformation journey.



 


corebapp.com, established in Bucharest in 2019, is a pioneering cloud-native no-code platform enabling the creation of complex business applications without coding. Launched in 2023, it offers a full no-code experience with secure integration, simplifying development for medium to large businesses in industries like construction, healthcare, and finance. corebapp.com stands out for its flexibility, scalability, and ease of use, empowering non-technical users to build enterprise-grade applications efficiently. Headquartered in Bucharest, Romania, corebapp.com continues to innovate in no-code solutions, focusing on flexibility, scalability, and security. Learn more at corebapp.com.

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