Source : Free On-Line Dictionary of Computing

vertical encoding
     
         An {instruction set} where a field (a bit or group
        of bits) of the instruction word is decoded (either by
        {hard-wired} {logic} or {microcode}) to generate signals to
        control the {functional unit}s, as opposed to {horizontal
        encoding} where the instruction word bits are used as the
        control signals directly.
     
        With vertical encoding, which combinations of signals and
        operations are possible is dictated by the decoding logic; the
        instruction field can only select one of these preprogrammed
        combinations.  This has the advantage that many control
        signals can be generated based on only a few instruction word
        bits and only valid combinations of control signals can be
        generated, e.g. only one source driving a {bus} at once.  An
        {instruction set} may use a mixture of horizontal and vertical
        encoding within each instruction.
     
        (1995-04-23)