What does vertical mean?
A segment within an industry that is made up from similar customers and businesses. Vertical focus in a niche that can be marketed to in a manner that is similar to another vertical; the entirety of a business can be part of a vertical market, or can be simply one department within the industry. An example would be a company that creates accounting and payroll software for the internet industry. Vertical markets can not only be industry based, they might also be geographically based. This specialization provides companies in vertical markets some competitive advantages that more generalist businesses would not have.
Verticals in the business market are used in contrast to horizontals in the marketplace where the focus is of the business is diverted to a large number of customers, regardless of the industry. In business verticals, the vertical market caters to the needs of a specific group of people within an industry. This provides an advantage because the niche focused vertical business is more familiar with trends, changes, regulation and competition within the industry it serves. It can become more like a partner for clients, providing essential insights. Vertically aligned companies can often charge higher rates as well, due to their specialized knowledge about the industry they serve.