Veeva Looks Beyond Life Sciences
We think the wide-moat firm has done well balancing innovation with profitability.
Veeva Systems (VEEV) was the first mover in providing customer relationship management services specifically designed for pharmaceutical companies, and we believe its niche position, best-in-class software, and operation-critical services will allow it to enjoy long-term economic profits on par with a wide-moat company. Veeva’s minimal client churn, substantial market share, and growing appeal outside the life sciences space bolster our view of the company as a market leader.
Veeva has two business segments: Veeva Commercial Cloud, its vertically integrated CRM products, and Veeva Vault, its horizontally integrated content and data manager. Commercial Cloud products can manage all forms of interaction between a biotech company and its customers. This product portfolio is built through a partnership with Salesforce.com (CRM) on the Salesforce1 platform. We estimate Veeva has expanded its biotech CRM market share to 65%. Furthermore, by operating in the life sciences vertical, Veeva has developed software specifically tailored to these companies, thereby reducing its customer acquisition costs and increasing cross-sales; 66% of revenue growth in 2016 came from existing customers.
Vishnu Lekraj does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.