Business model of OutSystems

Customer Segments

OutSystems has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at firms of all industries and sizes.

Value Proposition

OutSystems offers five primary value propositions: accessibility, cost reduction, performance, risk reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. Its application delivery platform spans many computer industry areas, including low-code development platforms, rapid application development (RAD) platforms, mobile application development platforms (MADP), and application platform-as-a-service.

The company reduces costs in a variety of ways. It offers a basic level service for developers for free and offers a free 30-day trial for enterprise customers so they can explore the solution in advance.

The company demonstrates strong performance through tangible results. Specific positive outcomes for clients include the following:

• SATA Group Airlines used OutSystems’ solutions to enhance development of mission-critical applications, resulting in a reduction in delivery time by 30%
• FICO used OutSystems’ solutions to improve its operations, resulting in a reduction in development hours by 75% and a 3x increase in go-to-market rate
• XDx used OutSystems’ solutions to build a new tracking/analysis business application, resulting in a 70% faster turnaround time to deliver change requests
• MAIN Energie used OutSystems’ solutions for a variety of development projects, resulting in an acceleration in delivery time by 4x – 5x

The company reduces risk by maintaining high quality and security standards. It has received certifications from Microsoft Azure, SAP, Oracle, and Amazon Web Services.

The company has established a strong brand due to its success. It bills itself as having the leading low-code platform for rapid application development. It manages the complete application lifecycle of large portfolios at more than 600 enterprises in 43 countries across 22 industries. Its prominent customers include Siemens, EMC, HP, Warner Bros., and Randstad. Its platform has overseen the development of over 100,000 apps with a cumulative seven million end users. Lastly, it has won many honors, including the following:

• CODiE Awards for Best Mobile Application Development Platform and Best Cloud Platform as a Service
• Stratus Awards for Best Platform as a Service
• Everything Channel's CRN Award for Top Cloud Computing Vendor
• Recognition as one of 20 “Red Hot B2B Tech Companies to Watch“ by IDGConnect
• Recognition as a “Leader“ in the Forrester Wave and Gartner’s Magic Quadrant

Channels

OutSystems’ main channel is its direct sales team. The company promotes its offerings through its website, social media pages, and participation in expos, summits, forums, and conferences.

Customer Relationships

OutSystems’ relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a “Learn” section that includes useful resources such as white papers, eBooks, documentation, and videos.

Despite this orientation, there is a personal assistance component in the form of phone and online support, and training in the form of public and private courses and webinars. There is also a community element in the form of a peer forum and a co-creation element in the form of an “Ideas” section where visitors propose suggestions that the company considers for its products.

Key Activities

OutSystems’ business model entails maintaining and updating its platform for its customers.

Key Partners

OutSystems maintains partnerships with firms that leverage its solutions to build custom enterprise-grade web and mobile applications. Specific partners include Deloitte, Truewind, Sense Corp, Persistent, 2Display, Asentex, Endurance IT Services, Highland Solutions, and Kobargo.

Key Resources

OutSystems’ main resources are its human resources, who include the engineers that maintain and update its platform, the sales employees who promote it, the training employees that provide instruction, and the customer service personnel that provide support. As a startup it has relied on funding from investors, raising $55 million from five investors as of February 2016.

Cost Structure

OutSystems has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a variable expense.

Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

OutSystems has one revenue stream: revenues it generates from the sale of subscriptions to its platform.