Salesforce Stokes Veeva Fight by Snagging Drug Customers
(Bloomberg) — Salesforce Inc. said it is taking many big customers from former partner Veeva Systems Inc. amid growing competition to sell software to the pharmaceutical industry.
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More than 40 customers, including “the top three global pharmaceuticals,” have signed deals to use Salesforce’s soon-to-be life sciences product, said Jeff Amann, Salesforce’s executive vice president of industry-specific software lines. Some of those customers are switching from Veeva, he added he
For pharma-focused customer relationship management software, Veeva is a “well-entrenched incumbent” with more than 80% market share, William Blair analyst Dylan Becker wrote in a November note.The company will generate about $2.72 billion a year revenue in the year ending in January, also makes tools to track drug development and analyze data.
Veeva’s customer relationship management products have historically been built on Salesforce’s platform. that terminates an agreement that would allow the company to build a broader suite of applications.
That forced Salesforce to develop a competitive offering and start trying to poach customers. “When Veeva decided to go its own way, a lot of those customers came to us and said, ‘We don’t want to leave,'” Salesforce’s Aman said.
Shares of Veeva fell as much as 4.7 percent on Tuesday.Shares of Salesforce were almost flat.
In recent years, Salesforce, the leading maker of customer management software, has seen revenue growth slow. To expand, the company has recently begun offering AI agents and emphasizing its data integration products. Life Sciences is a rare industry where Salesforce the central product is not yet saturated.The new product is included in several of the largest deals signed in the last quarter, Salesforce said during the earnings conference call.
The San Francisco-based company is currently recruiting development teams at a “very aggressive pace” for the life sciences product, which is slated to debut in September, Aman said.The company is “in active discussions” with major pharmaceutical companies to use the product, he said.
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