Difference Between Horizontal and Vertical Market Software (With Table)

Computers typically use certain application software to complete specific tasks. The extensively utilised software is divided into two subgroups: vertical market software and horizontal market software. Currently, the majority of e-markets have structures based on vertical market software. The horizontal market, on the other hand, is progressively growing.

Horizontal vs Vertical Market Software

The difference between horizontal and vertical market software is that horizontal market software focuses on broad categories that straddle industry boundaries, such as utilities, software, and power. However, on the contrary, Clientele’s core group is served by vertical market software, which also focuses on application development or speciality industry development. Thus, in the market, the demand for HMS or horizontal market software is quite high in comparison to vertical market software.

Horizontal market software or HMS is a kind of general-purpose software. This software spans nearly all or all of the numerous areas offered on the market. HMS (horizontal market software) covers a wider range of market domains. Horizontal market software is extremely versatile, and it may be used by a wide range of enterprises and industries. Some examples of HMS or horizontal market software are word processors, spreadsheets and CRM software.

Vertical market software or VMS is industry-specific software. VMS deals with a limited number of distinct sectors in the market. VMS, or vertical market software, focuses on a limited number of domains. In any other market, the software that belongs to the vertical market software has little or no use. VMS, or vertical market software, can be used to create applications for real estate, finance, retail, insurance, manufacturing, electronic, and transportation.

Comparison Table Between Horizontal and Vertical Market Software

Parameters of ComparisonHorizontal Market SoftwareVertical Market Software
Meaning and definitionThe software has a general purpose and cuts through almost all or various domains available in the market.A software that is industry-specific, which means it deals with only a few and particular domains in the market.
Deal with?A broader variety of market domains.Few particular domains.
Emphasizes onUtilities, software and electricity, cross-industry boundaries.Development of applications or niche industry serves clientele’s core group.
Flexibility and usageHighly flexible, other businesses and industries use them.Almost no use or have limited use in any other market.
ExamplesCRM software, word processors, spreadsheets.Real estate, banking, retail, insurance, manufacturing, electronic, transportation programs.

What is Horizontal Market Software?

Horizontal market software or HMS belongs to the family of general-purpose software. It also cuts across practically all or all of the diverse domains accessible on the market. HMS, or horizontal market software, covers a wider range of market domains. Horizontal market software focuses on broader categories that straddle industry boundaries, such as utilities, software, and power.

This software often makes use of applications of specific technology to undergo automation of their day to day functions and business processes. They manage their customers better in terms of business relations. This is what called a horizontal market approach. The applications they develop can be used in restaurants, banks or insurance firms as well.

The software in the horizontal market software category is quite versatile, and it may be used by a wide range of enterprises and industries. HMS, or horizontal market software, includes things like CRM software, spreadsheets and word processors.

What is Vertical Market Software?

An industry-specific software is called vertical market software. However, these software deal with some particular and limited domains in the market. Vertical market software, or VMS, focuses on a limited number of domains. Clientele’s main group is served by vertical market software, which focuses on application development or the speciality industry.

In any other market, the software that belongs to vertical market software has essentially little or restricted application. VMS, or vertical market software, includes applications for real estate, finance, retail, insurance, manufacturing, electronic, and transportation. This software address only a limited amount of providers and clients. Similar methods are used for better marketing strategy by developing similar solutions.

They do not focus on a bulk but rather any one industry. Either telecommunication industry or finance or even transportation. The reason why a single application can not serve various purposes can be well understood by citing an example. The software made for banking purposes can not be managed for retail outlet services or in any other industry, as it was specially designed for a particular sector.

Main Differences Between Horizontal and Vertical Market Software

  1. A software having a general-purpose and which cuts through almost all or various domains available in the market belongs to the family of horizontal market software. On the other hand, software that is industry-specific, which means it deals with only a few and particular domains in the market, is called vertical market software.
  2. Horizontal market software or HMS deals with a wider variety of market domains. On the other hand, vertical market software or VMS deals with only a few particular domains.
  3. Horizontal market software emphasizes wider categories such as utilities, software and electricity, which cross industry boundaries. On the other hand, vertical market software serves the clientele’s core group and emphasizes the development of applications or niche industries.
  4. The software that belongs to the horizontal market software category is highly flexible, and a variety of businesses and industries can make use of them. On the other hand, the software that belongs to vertical market software have almost no use or have limited use in any other market.
  5. CRM software, word processors, spreadsheets are some of the examples of HMS or horizontal market software. On the other hand, applications build for real estate, banking, retail, insurance, manufacturing, electronic, transportation programs are examples of VMS or vertical market software.

Conclusion

The packages of application software constitute a diverse and a whole variety has the potential to run specific tasks. To accomplish a particular task, computers usually make use of certain application software. The software that is widely used is categorised and classified into two subgroups- horizontal market software, and another is vertical market software. The former is a narrow concept and hence differs from the latter, which covers a wider concept.

These categories are composed of applications that are more flexible and hence comes under the horizontal market segment. They have a wider approach which is opposed by its counterpart, vertical market software. In the current scenario, maximum e-markets follow structures according to vertical market software. However, the horizontal market is also expanding gradually.

References

  1. https://ideas.repec.org/p/drm/wpaper/2007-13.html
  2. https://dl.acm.org/doi/pdf/10.1145/792704.792720
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