Is it possible to develop plug-ins on an Appian cloud instance or an a local developer instance is a must have ?
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You must use a local developer instance to develop a plug-in. The local installation contains the necessary java libraries and also allows you to test your plug-in locally before you deploy it. Once you create and test your plug-in locally, you can submit your plug-in for cloud approval before the cloud team will deploy it to your site. See the Cloud FAQs for more information.