Vertical (a.k.a. "Sidebar") navigation is a way of showing a persistent site or application structure along one side of the product.
The macOS Human Interface Guidelines define it by saying "a sidebar typically consists of a table view or outline view that lets people navigate and select items to act upon in the main portion of the window."
Vertical navigation is used extensively on the web and is becoming much more common, almost standard, on mobile via the slide-out "navigation drawer" pattern.
Vertical navigation, like tabs, is a member of Master/Detail family of patterns, which is described as "ideal for creating an efficient user experience by allowing the user to stay in the same screen while navigating between items."
Unlike tabs, vertical navigation is appropriate when the number of categories is not small, or is user-customizable (such as folders or tags in an email client). It is considered a "safe" navigation pattern because it is familiar, flexible, and doesn't take up much space. It is often used when there is no other obvious choice.
One primary reason not to use it is when horizontal space is constrained. This is why many websites (including this page) remove the vertical navigation for small screen sizes, replacing it with either breadcrumbs or the popular "hamburger" menu navigation pattern. The Material Design guidelines differentiate between four distinct variants, based on screen size and content: standard, modal, permanently visible, and dismissible.
Like tabs, vertical navigation should have a clear selected state, usually achieved by making the selected item bold and/or highlighted. A hover state can also be useful.