Horizontal software refers to an application that can be used across several industries. Classic examples of horizontal software are word processors, spreadsheets, and web browsers. We can hardly think of any sector that has no use for these applications.

Horizontal software is primarily developed with no specific market or industry in mind. They are designed to be used by a wide range of users. In contrast, vertical software refers to applications specifically designed to solve a problem within a specific industry.

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Read More about “Horizontal Software”

The term “horizontal software” may sound new to people outside the business and tech industries, but we have been using them ever since. In fact, you are reading this on a web browser, along with thousands of other people from various industries.

What Are the Other Names for Horizontal Software?

Horizontal software has been called by different names. Among them are:

  • Horizontal market software
  • General-purpose applications
  • Productivity software

Regardless of what they’re called, the main idea is that they are helpful in a wide range of industries. For example, people working in the manufacturing, commerce, and financial sectors use word processing software, web browsers, and accounting software.

horizontal software

What Is Vertical Software?

Vertical software refers to applications developed for a specific purpose, industry, or profession. Farm management systems are examples of vertical software. They help people in the agricultural sector record, monitor, and analyze farm and crop conditions.

Unlike word processing applications and other horizontal software, farm management software can only be used in the agricultural and related industries.

What Are the Differences between Vertical and Horizontal Software?

When talking about horizontal software, we often discuss them in contrast with vertical software. In the software context, these terms don’t refer to directions. They are business models that dictate the software provider’s business plans.

We discussed the differences between vertical and horizontal software below.

Target Market

One of the main differences between vertical and horizontal software is the number of audiences they target. Horizontal software has a broad audience, while vertical software only has a limited number of users.

This distinguishing factor leads to more differences, such as how they are sold, how much they’re priced and marketed, and many more.

Marketing Strategy

Horizontal and vertical software can employ a mix of business-to-business (B2B) and business-to-customer (B2C) marketing activities since they can target end-users and companies.

However, their marketing focus differs. Horizontal software aims to attract as many users as possible and may focus on lead generation.

On the other hand, vertical software only has a limited number of users, so attracting new users may not be a priority. Instead, they aim to build lasting relationships with existing clients.

Growth Potential

Horizontal software companies tend to grow more than vertical software vendors since they can sell to anyone, regardless of industry. In contrast, vertical software users are limited.

What Is Horizontal Software-as-a-Service (SaaS)?

Horizontal software-as-a-service (SaaS) falls under the umbrella of horizontal software. However, horizontal SaaS solutions are delivered via the cloud or over the Internet instead of being downloaded and installed on user devices.

Like horizontal software, horizontal SaaS targets a broad audience. Some examples of horizontal SaaS solutions include:

  • Customer relationship management (CRM) platforms
  • Marketing solutions
  • Accounting solutions

What Are Some Examples of Horizontal Software?

We have mentioned word processing software, spreadsheets, and web browsers as examples of horizontal software. By now, you may already have several other products in mind. A few examples are:

  • Project management applications
  • Human resource management (HRM) systems
  • Bookkeeping applications
  • Cloud storage systems
  • Financial management applications
  • Billing and inventory management systems
  • Payroll management systems
  • Generic mobile applications
  • Operating systems (OSs)

These are just a few examples of horizontal software. There are more since it is the most common type of software. Almost all applications downloaded onto your phone belong to this category.

For instance, your banking application may sound like vertical software. However, it wasn’t specifically created to be used by banks but by banking clients from all walks of life. In contrast, the financial software used by banks to monitor deposits, assets, and lending programs are an example of vertical software. They are developed to be used only by banks in their operations.

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Horizontal software is the most common business model employed by software companies. These products are used by several people across industries.

Key Takeaways

  • Horizontal software refers to applications designed to be used by a broad range of users from different industries.
  • Examples of horizontal software are web browsers, word processing software, and OSs.
  • Horizontal SaaS refers to horizontal software delivered over the Internet or via the cloud.
  • CRM systems are examples of horizontal SaaS solutions since they are used across industries.

Other interesting terms…