The business is growing, budget has been allocated and the different teams have all agreed it is time to go and look for a company-wide solution. But once you start looking for different company-wide software solutions you will notice a distinct difference between so-called ‘horizontal’ and ‘vertical’ solutions.

Horizontal and vertical software solutions

A horizontal software solution is broader in nature and aims to serve a wide space of the market, through different industries. Oftentimes this means that the solution can handle most of the basic functionalities that are required. However, more industry-specific challenges are not addressed in the standard solution because of the general purpose of the solution to serve a wide array of markets.

In contrast to a horizontal solution, a vertical solution is targeted at a specific industry to serve its distinct needs and tackle its unique challenges. This means the addressable market will be more defined and the software solution is made to serve mainly within this particular industry.

A trend of the last years is the rapid growth of vertical software solutions as the market size has nearly tripled in size. And this rapid growth makes sense. Why? We have listed 3 key reasons to go for an industry-specific software solution.

1. Industry knowledge and experience

A vertical solution is backed by industry experts that know the common terminology, business processes, economic climate, compliance and regulations common to the industry. Consequently, ensuring all the essential features are addressed in the software and implementation. Through repeated experience with businesses in the same industry, key functionalities can be developed and best practices can be derived to increase efficiency and relevance of the software offer. In addition, with the industry expertise and best practices from the vertical software provider, possible issues can be identified, business processes can be optimized and fast alternatives can be offered, thus increasing customer satisfaction. The familiarity with similar businesses and software end-users together with continuously following relevant industry trends and innovations, offers an important foundation of information that can be bundled into the software solution and following updates.

2. Industry specific functionality

Instead of a ‘one size fits all’ solution that will cover just your basic requirements, a vertical solution will provide the functionality that is unique to your industry to ensure your business can deal with today’s and future challenges. Furthermore, regulatory changes and trends in your industry are well-known and important to the software vendor to keep their product competitive. This ensures that the vertical solution is kept up-to-date to support your future needs. Combined with previous implementation experience from similar businesses that allows to improve the software functionality based on customer input.

3. Extend the role of IT solution to business solution

With the intelligence gathered from multiple businesses in the same industry, the software vendor from an industry-specific vertical solution can oftentimes become more than just an IT provider to your company. As they have seen and analyzed numerous similar businesses, they can think along beyond just your IT software and help consult on different business processes based on the derived best practices and expertise from similar customers. Not a bad extra to get from your IT provider, right?