SaaS adoption is snowballing. A recent Harvey Nash survey revealed that SaaS was voted the most important technology in helping achieve business goals.
Metrics research found that organizations with more than 1,000 employees use over 150 SaaS applications 🙌
Products within the SaaS industry serve an immense number of functions. While some are intended to cater to the specific needs of a particular group of users, others help a hugely diverse client base, providing solutions to a broader market. This critical distinction has resulted in two key SaaS models: vertical and horizontal.
If you're thinking of becoming part of the SaaS industry, you'll need to clearly understand these two different models and determine which one is right for your business. Simply put - the better your understanding of these services, the higher your chances of success are.
The 7 Key Differences Between Vertical and Horizontal SaaS
Scope of Industries and Market Size
The vertical SaaS business model is an end-to-end solution designed for the needs of a specific sector. These solutions' software features are specially designed to streamline particular industry operations. On the other hand, horizontal SaaS solutions are less industry-personalized and more problem-oriented. Their increased applicability across several industries sets them apart from horizontal SaaS.
Customer Acquisition and Retention Approaches
In the vertical SaaS model, acquiring customers takes less time and effort than in horizontal SaaS. As you can imagine, if only a few businesses offer solutions to a niche problem, customers will likely choose a business and stick with it. Make sure you have a look over our SaaS customer acquisition guide, as it might come in handy.