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Types of software solutions

• Vertical Market Solutions
• Comprehensive Off-the-Shelf Solutions
• Comprehensive Off-the-Shelf Solutions Coupled with Third-Party Add-On Solutions

Vertical Market Solutions refer to products that are designed to meet the specific needs of a particular industry; for example: insurance, hotel, hospital, restaurants, etc. The vertical solutions are designed specifically for the industry having unique features related to the industry. Check out verticals solutions on iPOTT.

Comprehensive Off-the-Shelf Solutions or horizontal solutions or functional solutions refer to products that are designed to meet the needs of a wide variety of industry and business situations for example retail, distribution, job costing, services, consolidations, manufacturing, and much more. Eg: ERPs, CRMs, CMMs, etc. Check out the functional solutions on iPOTT.

Comprehensive Off-the-Shelf Process Solutions or Process solutions or horizontal process solutions Of the many processes in an functional a software covering one single process is a process software. Eg. If ERP covers entire finance along with other processes in a business and Bank reconciliation software is a process software. Check out or process related software to see if they can intergrate to your exisiting software.

Comprehensive Off-the-Shelf Solutions Coupled with Third-Party Add-On Solutions refer to off-the-shelf solutions with one or more separate add-on modules added in to complete the solution. For example, you will see many end users couple the top off-the shelf packages with the following popular third party add-on solutions: Crystal Reports for report writing, FRx for financial reporting, Abra for human resources and payroll, Best! There are number of add-on which can get added on to your existing software. Check out our tools to see if they can be plugged into your application.

The story does not intend to criticize the vertical solutions. It is to warn that the vertical solutions need more careful selection than horizontal solutions

STORY ABOUT VERTICAL SOLUTIONS: The following story describes my current impression of the vertical software industry

The story of two guys A & B who have a acounting software product, which I will call Super Software.. Years earlier a push had been made to create and sell this accounting package. However, because of missing features, missing modules, poor technological design, lack of a distribution channel, and the disappearance of investors - the product has all but folded. These two guys come across a gentleman who owns a boat marina, and this gentleman explains "if I could find an accounting software product that would keep track of the name of the customer's boat, the slip number where that boat was parked, whether that boat has been re-fueled, and whether the customer's trailer is kept on the premises - I'd buy that product". Motivated by the prospects of making the sell, A & B run back to their garage and work feverishly to add these requested features to their product. They show up on the boat marina doorstep a few months later to demonstrate their product's new "boat marina specific" features. The boat marina owner shouts hallelujah and snaps up the product - "Presto", a new vertical market solution for boat marinas is born. Over the next several years, A & B continue to add functionality to their system specific to the boat marina industry. They also adjust their promotional materials and verbiage to position their product as a boat marina solution. In reality, the newly improved product may indeed have some neat features, however the inherent limitations, which kept the product from success in the first place, are still there. For example many, many vertical market solutions suffer from old technology, proprietary databases, lack of financial reporting, lack of corporate support, poor performance on a local area network, no customization tools, weak security, higher price, full of bugs, and a host of other problems.

Despite the multitude of limitations, boat marina owners across the land continue to purchase the Super Boat Marina solution for two reasons. First, they erroneously assume that they should purchase a solution specifically built for their industry. In reality, they allow a few impressive features to sway them. The second reason that boat marina owners continue to purchase Super is that they are unaware of the product's shortcomings until well after they purchase the system - by then it is too late.

Over the past fifteen years, I've talked to hundreds of businesses across the country that have told me about their nightmare experiences with vertical market solutions. I wish I had documented these stories. In each case, three prominent themes rings permeate their stories - 1) missing features; 2) bugs; and 3) "I'll never do that again".

There are explainable reasons as to why vertical market solutions tend to be very poor options. It is very hard for any company to dominate an industry for a wide variety of reasons. Think about it. How big is the market for accounting software solutions for say - insurance companies, 100,000 companies, or 200,000? - I really don't know. But I do know that a given insurance industry accounting software solution would need to own a sizeable amount of that market in order to generate the resources to support the product. Meanwhile off-the-shelf comprehensive products have between 7 and 9 million prospective customers out there. These products do not need to dominate a market in order to generate a base of 20,000 to 30,000 customers, which is normally needed to ensure profitability and longevity.

This same principle affects the products' dealer channel as well. While there may be a sufficient number of insurance customers nation-wide to support the product, there may not be enough insurance customers in many markets to support a reseller of that product. This principle makes it very difficult for any vertical market solution provider to develop a distribution channel. The result is that most vertical.

This same principle affects the products' dealer channel as well. While there may be a sufficient number of insurance customers nation-wide to support the product, there may not be enough insurance customers in many markets to support a reseller of that product. This principle makes it very difficult for any vertical market solution provider to develop a distribution channel. The result is that most vertical market solutions are sold and supported only by the manufacturer of those products, or by only a handful of resellers.

The problem of a limited distribution channel gives way to another problem in that most customers want to buy accounting software solutions from a local company, so the company is nearby to provide support and assistance.

Conclusion:

I am not a big fan of vertical market solutions. I find that while many vertical market solutions seem to be the best solution up front, closer inspect reveals many problems and weaknesses. I've heard many tales of vertical product nightmares, and I've experienced a few myself. In general, I think that customers should avoid vertical products like the plague. Yes, there are a few good vertical solutions, but 98% of them seem t be giving the other 2% a bad name.

Author: J. Carlton Collins