The quiet return of vertical software
AI makes industry-specific context more valuable, not less. The deepest workflows are becoming buildable again.
Horizontal tools won the last software cycle because standardisation created scale. Intelligence changes the equation: understanding a narrow workflow can now unlock automation that generic software cannot safely attempt.
The shift
The surface-level story is speed: more output, shorter cycles, lower production cost. The structural story is that the location of scarcity moves. Once an old constraint becomes cheap, the system reorganises around what is still difficult to obtain—context, judgement, authority, attention or trust.
That distinction matters because markets routinely overvalue the newly abundant thing during a transition. Capability is visible. Integration is quiet. Yet integration is where a possibility becomes a repeated behaviour and, eventually, an institution.
Where the leverage moves
The moat is a living model of the domain—its documents, exceptions, permissions, language and consequences. Vertical data becomes valuable when it is organised around action.
The practical response is not to chase every new capability. It is to identify which part of the value chain now moves faster, which part becomes newly defensible, and what kind of product can make that shift legible to a user. A good product is a theory of the new constraint made concrete.
The model to hold: capability diffuses; situated judgement compounds.
What I’m watching
Look beyond the obvious regulated categories. The next durable vertical products may begin in industries that still run on inboxes, PDFs and phone calls.
The most useful signals will not always arrive as announcements. They appear in changed pricing units, shrinking interfaces, new permission patterns and teams achieving outcomes that their organisational shape should not permit. Those are the moments when the future stops being a claim and starts becoming an operating fact.