Devs have been championing the benefits of the SaaS (software as a service) model of application delivery for years now.
The main thrust of the argument for SaaS is that it can free businesses from costly upgrade cycles, reduce on-site IT needs, and slash upfront spending.
All of those things are of course, true.
The idea is to create and provide hyper-specific SaaS solutions suited for individual industries – and it’s a trend that’s gradually taking over the market. Here’s an overview of everything you need to know about vertical SaaS.
Horizontal vs. Vertical SaaS
To get started, it’s first necessary to understand the difference between horizontal and vertical SaaS – because it’s not just jargon. Horizontal SaaS refers to internet-delivered software meant to serve one specific set of business needs. In the above examples, QuickBooks handles business accounting, Office 365 takes care of word processing, spreadsheets, and data management, and Salesforce is an all-in-one CRM system.
What’s important is to realize that they’re the kind of solutions that aren’t industry-specific. For example, small businesses of all stripes use QuickBooks, and just about everyone on Earth has used Microsoft Office at one time or another. SaaS solutions like those have their purposes, and they market to the widest possible audience.
The Advantage of Vertical SaaS
On top of that, vertical SaaS solutions have the ability to be far more nimble in their development. By targeting a single industry, they are much more able to add new features that users want because their entire user base would have a need for them. The companies that provide such solutions can also spend far more time and resources on their software since they don’t need to worry about marketing their product to several disparate industries. For the companies that use the software, that means a more attentive provider that intimately understand the industry they’re serving.
Where the Market is Headed
As their growth continues, some of those natural advantages mentioned earlier should help vertical SaaS businesses cement their positions as the go-to solutions in a variety of industries. At that point, their momentum and in-industry word-of-mouth should propel them to even greater heights. From a pure business perspective, that’s great news. It means that no matter what industry you’re involved in, there’s likely to be a targeted, useful SaaS solution that can handle every aspect of your company’s software needs.
The Bottom Line
The key takeaway here is that we’re about to see some new players emerge in the SaaS space, and they’re likely to come in the form of vertical solutions. It’s an indication that software industry entrepreneurs are starting to see the value of capturing whole vertical markets and serving them to the greatest possible extent. That should also make it possible for all kinds of new startups to get up and running in a variety of industries with fewer technology costs and less planning time – because much of the work will already be done for them. Any way you look at it, it’s a positive development for everyone involved, and should lead to a new renaissance of new business development economy-wide.
Photos licensed via contributor’s Adobe Stock subscription, by Tierney, wladimir1804, and WrightStudio.