Vertical SaaS has become a popular and effective way for companies to provide solutions, enhancements, or change management engagements in their industry verticals.
It's changing the way many companies sell their services and support customers in various market segments.
This post will discuss the three primary models of Vertical SaaS.
The first type is "supplier-centric," which means that all data is controlled by one company (the supplier).
The supplier might outsource the cloud infrastructure to a third party, but it is their data, and they choose which apps can access it.
An example of this would be what Salesforce has done with its Force.com platform - they have created an extensive library of pre-built apps that can talk to each other via APIs and a set of tools that let developers build apps quickly and easily.
The second is called "decoupled," where the data is created by one company but controlled by another (the consumer).
This allows the supplier to be the "single source of truth" for all CRM-related data while still allowing consumers to use their tools and workflows.
An example would be DropBox - they control all user-generated content and allow access to it via APIs.
Dropbox users can share their content easily with other apps and services, but ultimately it is all stored in one place.
The third model is called "consortia," and this is where all the content comes from many different places (the consumer), but someone else controls access to it (again, not the consumer).
For example, let's say that 40 companies come together to build a service for collaborating on design ideas.
The consumers are the companies themselves, but a controlling company makes sure everything runs smoothly and secures all user-generated content.
A classic example of this was Facebook before Facebook opened up its API to third-party apps.
It was just for Facebook's internal use until they finally saw it as an opportunity to generate revenue (everybody wins!).
But, Vertical SaaS is not meant to replace traditional software.
Companies like Salesforce and SAP would never declare that everyone in an organization can use their platforms - they are intended to serve a very defined purpose and one industry extremely well.
This means that traditional software should still address other non-CRM-related business functions (like budgeting or manufacturing).
This model provides companies the power to address their needs with a set of tools and workflows that they control (the supplier).
The vertical SaaS model may not be the right solution for every business, but it works well for some.
Further reading: https://bit.ly/3jcSXmY
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