The main differences between a horizontal application and a vertical application are:
Target Market and Scope
- A horizontal application has a broad target market and can be used across many different industries and business types. Examples include word processors, spreadsheets, email clients, web browsers, etc. that are useful for almost any business.
- A vertical application is designed for a specific industry, business type, or niche market. It addresses the unique needs and requirements of that particular vertical. Examples include banking software, retail point-of-sale systems, legal practice management software, etc.
Functionality and Features
- Horizontal applications provide general functionality that meets common needs, but may lack specialized features for any particular industry. They aim to appeal to the widest possible audience.
- Vertical applications include specific functionality and modules to support business processes, regulatory requirements, terminology, and best practices of their target industry. The feature set is tailored to the vertical.
Customization
- Horizontal applications are usually less customizable since they target a broad market. Some configuration may be possible.
- Vertical applications are often highly customizable and may even be custom-built from the ground up for a specific vertical. The ability to tailor the application is key to meeting the precise needs of the industry.
Expertise Required
- Horizontal application vendors can succeed without deep subject matter expertise in any particular industry.
- Vertical application vendors need significant domain knowledge and industry expertise to build an effective solution. Vertical apps are often built by those with direct experience in the target industry.
Summary
Horizontal applications aim for a wide audience across industries, while vertical applications are optimized for a particular industry or niche market. The key distinction is the specialization and focus of vertical apps compared to the broad appeal of horizontal solutions.