Is the concept of a “Software category” dead?

At Cloo, we analyzed over 100,000 software products and about 3 million software reviews. Naturally, with such vast numbers, we needed a way to bring order to this chaos, and using “software categories” seemed like the obvious solution. The concept of categorizing software was designed to organize the business software domain and help people find the right solutions. However, we quickly uncovered some fundamental issues with this concept.

First, there are simply too many categories. G2 has around 1,600 categories, while Capterra has a still mind-boggling 400, with new ones being added regularly. It's nearly impossible to keep track of these categories, let alone understand them all. Our friends at one of the major review sites confirmed that customers lost track of the concept of categories a long time ago. Now, it’s mainly a source of confusion.

Secondly, many products span multiple categories. Some software, like Rippling, is listed under as many as 28 categories on major review sites. While it makes sense that software can serve multiple functions, it becomes problematic when a product like Rippling, primarily an HR platform, is also listed alongside “endpoint management software.”

This brings us to the third issue with the concept of a “category.” At its core, it’s an artificial construct, dependent on how humans and companies choose to categorize things. Many products are miscategorized, under-categorized, or over-categorized.

Why does this happen? Monetary incentives and vendor relationships often play a significant role. It’s in a vendor’s interest to be listed in as many categories as possible to maximize their chances of being discovered, even if it comes at the expense of the user experience. Vendors with good—often paid—relationships with listing websites tend to appear in more categories.

A striking example is tawk.to, which ranks #4 in the Live Chat category by the number of websites using it. Despite having rich CRM, knowledge base, and other features, it’s only listed in the Live Chat category on G2. In contrast, Intercom, ranked #5 by the number of websites, is listed in 14 categories on G2. The likely difference? Intercom is a G2 customer, as indicated by the paid features on their profile, while tawk.to likely isn’t.

So, what can we do instead of relying on categories? With the advent of Large Language Models, we can enable people to search based on what truly matters to them. It’s now possible to create queries like:

• “What’s the best software to help prevent phishing at my medium-sized law firm?”
• “I’m looking for software that can find leads and their mobile numbers in the cement industry in southern US states and integrate with my Salesforce CRM.”
• Or even, “My cafe sales are declining; can I address this with software?”

This kind of next-generation software search is something we’re working on at Cloo. This doesn’t mean the concept of a category is obsolete, but it will play a less central role. It’s time to stop confusing software buyers and start helping them find the perfect solution in minimal time. If you’d like to be among the first to learn about Cloo’s launch, leave your email below. We're launching in November!

And finally, if you've made it this far, here is our interactive tool that lets you explore how different software solutions relate to each other and how we've categorized them. Dots of the same color belong to the same 'cluster'—a concept broader than a category. We're excited to unleash the power of this analysis to help people find the best-fitting software.