The Role of Low-Code in Application Development Strategy: Pros and Cons

From an article by Simone Mink (Mendix), January 2, 2024

Modern enterprises face the ongoing dilemma of whether to develop custom software or purchase ready-made COTS solutions. With evolving technology, this decision has become more nuanced. The way we build tailored applications has changed, enabling higher ROI and faster time-to-market. This article explores the “build vs. buy” debate in detail, with examples from organizations that have taken both paths.

Buying Software: Pros and Cons

Over the past two decades, companies have leaned heavily toward COTS solutions—and with good reason. They’re faster to deploy, cost-effective upfront, and backed by proven track records. However, even the best COTS products have limitations. Around 53% of projects exceed budgets by nearly 189%, and on average, 31% of them get canceled.

COTS is designed for mass appeal, addressing common needs such as ERP or claims processing. That broadness is its biggest weakness—delays in updates, limited customization, and vendor lock-in are common challenges.

Advantages of COTS

• Fast to deploy and use for common business needs

• Lower initial investment and predictable costs

• Proven track record of successful implementations

Disadvantages of COTS

• Limited flexibility and customization

• Expensive modifications and licensing fees

• Features that may not align with organizational needs

• Vendor dependency for updates and maintenance

When to buy:
If you need a straightforward, quick solution without much customization, COTS can work well. It ensures predictable costs and faster deployment but may fall short as business needs evolve.

Building Custom Software: Pros and Cons

For organizations with unique requirements, building can be attractive. Custom software provides flexibility, integration with IT infrastructure, and strategic differentiation. However, development talent is increasingly scarce—software engineering roles now take 80+ days to fill, compared to 42 days for non-developer jobs.

Advantages of building

• Tailored precisely to business needs

• Easier integration with internal systems

• Greater differentiation from competitors

• Ability to update as requirements change

Disadvantages of building

• Higher upfront costs in time and money

• Longer development lifecycles

• Dependence on scarce, expensive developer talent

When to build:
If your organization requires a mix of capabilities that COTS cannot deliver, has available resources, or needs long-term scalability, custom development may be the right choice.

The Low-Code Alternative

Low-code platforms provide a middle ground between building and buying. Gartner predicts that by 2025, 70% of new applications developed by enterprises will use low-code or no-code technologies.

Advantages of low-code development

• Faster development cycles

• Encourages collaboration, even among non-technical teams

• Better alignment with Agile workflows

• Full control over app lifecycle

• Potential for long-term cost savings

Disadvantages

• Still requires skilled talent and time, though less than traditional coding

• Higher initial costs than COTS, though ROI improves over time

Mendix advantage:
With its strategic alliance with AWS, Mendix makes it easy to integrate advanced AWS capabilities into low-code solutions.

Build vs. Buy vs. Low-Code: How to Decide

1. Assess how much customization your business needs.

2. Conduct a gap analysis of COTS solutions.

3. Evaluate scalability and flexibility.

4. Analyze total cost of ownership for hidden costs.

Rule of thumb: If a COTS solution fully meets your needs, buy it. If not, low-code provides a flexible, cost-controlled way to build solutions that align closely with your business strategy.

Real-World Examples

• North Carolina State University used low-code to build an application (REPORTER) in six months for under $1M, compared to $3–10M quotes from COTS vendors.

• Saga Healthcare (UK) used low-code to build SACHA, a home-care scheduling system, in six months for under £250K—saving 97.9% compared to a £12M vendor quote.

The Best of Both Worlds

Mendix also offers adaptive solutions for ISVs, combining the benefits of ready-made software with the flexibility of low-code. This hybrid model avoids the pitfalls of rigid COTS customization while allowing organizations to adapt solutions to fit like a glove.

“With Mendix, you gain access to highly customizable COTS solutions. You get the benefits of ready-to-use capabilities with the ability to tailor them perfectly to your organization.”
— Jethro Borsje, Director of Ecosystem, Mendix