Siding is typically installed in horizontal courses that overlap each other (like shingles on a roof), in order to shed water. Proper overlapping of layers in the building envelope - sheathing, flashing, housewrap, siding - is the key strategy for keeping water out of the structure. Vertical seams are more difficult to keep weatherproof.
There are siding products that provide an attractive vertical look - a bead-board or tongue-and-groove look is common. They are typically available in sheets, and they definitely require careful installation, with particular attention to flashings and edge treatments.