What is vertical SaaS and why is it the future?

What is vertical SaaS and why is it the future?

The SaaS industry is constantly changing. By 2023, the market is supposed to touch the $60 billion mark with a CAGR of 9% from 2019. When SaaS started, most enterprises focused on covering a wide range of industries (horizontal SaaS). Microsoft 365 and Slack are some of the prime examples.

However, vertical SaaS has been gaining traction over the last few years, where providers focus on catering to niche industries. Now, the question arises, how does that change the status quo for the existing players?

What is Vertical SaaS?

In contrast to its counterpart, Vertical SaaS focuses on a single industry to cater to its distinct needs. It can be designed to solve a single problem or a pyramid of issues in a narrow market. The marketing approach is also a bit more conservative in Vertical SaaS as the target companies are extremely well-defined.

When it comes to commerce, a Vertical SaaS solution provides all the functionalities of modern software, including –

  • Product management capabilities
  • Powerful search engine with flexible navigation
  • Streamlined checkout and cart competencies with order management
  • Promotion, pricing and bundling
  • Integrated web management and omnichannel support
  • API extensibility
  • Analytics

But, the real differentiator of Vertical SaaS comes from the idea that all the components are trained, trimmed and fashioned for a specific industry vertical.

The Business Benefits of Vertical SaaS

Faster time to value

The advantage of approaching a specific industry is that the moulding or last-mile customizations can be considered from the very beginning. This essentially reduces IT spending with a worry-free IT infrastructure.


A native, pre-packed integration from the get-go allows both the providers and users to consider all the possibilities with the industry’s most important products. For instance, in the niche of eCommerce, it shall be ERP, billing, payment providers, marketing and governance systems.

Unlimited Scalability

Vertical SaaS brings auto-scaling to the table, i.e. the ups and downs of the infrastructure can be supported without shelling out additional resources on monitoring and tracking. This also leads to frequent updates with seamless upgrades and immediate innovation.

Cheaper Acquisition Costs with Quick Adaption

Due to the highly targeted character of the Vertical SaaS solutions, they facilitate up to 8 times cheaper customer acquisition costs. Plus, they can be adapted to the user-base demands more easily. This flexibility can be translated into decreased churn and further upsell opportunities with the current customers.

The Future of SaaS

 SaaS is leaning more and more towards industry-specific vertical solutions because they serve an enterprise’s unique needs. As the concept develops further, AI, blockchain API and mobile SaaS products can be seen dominating their respective markets.

The expectations of performance and availability have risen significantly. The choice is either using software that can provide holistic support in every area of the organization or finding something that can. Vertical SaaS solves this problem once and for all.

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