A range of industry-specific challenges, from various regulatory requirements to fragmented technology stacks, have led today’s B2B software buyers to expect vendor solutions that are custom-fit for their distinct needs. In response, software companies are increasingly “verticalizing”—adapting their products, marketing, sales, and ecosystems to specific industry use cases—rather than relying on the broad applicability of “horizontal” products.
Our research finds that the trend of verticalization is accelerating, with more than 40% of software companies increasing their verticalization efforts in existing industries and almost a third expanding to additional industries.
- The most important aspect of verticalization to customers is expertise.
- The impact of verticalization spans the entire sales cycle—affecting deal size and deal velocity and creating a competitive edge.
- The right partnerships can be tremendous accelerators in verticalization for software vendors.
- B2B technology providers have a major opportunity to build sustainable advantage through a clear, industry-focused approach.