TMW #192 | Is vertical the future of Martech?

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Is vertical the future of Martech?

Industry-specific software has gained in popularity over the last decade, but are vertical platforms the future for Martech?

Do you ever come across a piece of data or a chart that stops you in your tracks? Well, I certainly did the other day whilst flicking through G2’s latest State of Software report. Here’s the culprit…

Across all B2B software – predominantly SaaS – the category with the highest number of pageviews over the 12 months up to June 2024 was vertical, industry-specific software. This is somewhat expected as vertical software has the highest number of listings on G2, but the difference in pageviews is still stark, dwarfing the second largest category: horizontal Martech.

It’s not just pageviews where vertical SaaS is growing. The number of vertical SaaS unicorns – companies with a market cap of at least $1B – grew 40% in 2022. Public vertical SaaS companies continue to post strong financials. 

The G2 report doesn’t break down vertical software into its most closely related horizontal category (e.g. life sciences-specific marketing software), so it’s impossible to know the exact split of the Martech industry between vertical and horizontal. But, looking at where all the major Martech players – Salesforce, Adobe, HubSpot, etc. – started out, it’s clear that at first the industry was focused on building horizontal before it went vertical.

According to a Forrester report commissioned by Kantata, 89% of professional services organizations (PSOs) believe that vertical SaaS is the “way of the future” for their industry. Kantata is a PSO vertical SaaS vendor so take that number with a grain of salt, but it got me thinking: How does this trend towards vertical SaaS apply to the Martech industry? Is it relevant across industries? Is vertical the future of Martech?

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Stay Curious,

Keanu Taylor

Make sense of marketing technology.

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Want to share something interesting or be featured in The Martech Weekly? Drop me a line at juan@themartechweekly.com.