In the competitive landscape of pharmaceutical software, a significant shift is occurring as Salesforce Inc. (CRM) challenges Veeva Systems Inc. (VEEV), once its partner, now its rival. Salesforce has secured over 40 customers for its forthcoming life sciences product, including a major player among the top three global pharmaceutical leaders, according to a Bloomberg report citing Jeff Amann, Salesforce’s executive VP for industry-specific software lines. These customers include some that are transitioning from Veeva, signaling a potentially disruptive change in the market dynamics.
Veeva has long dominated the sector with an 80% market share in pharmaceutical-focused customer relationship management [CRM] software. With an estimated annual revenue of $2.72 billion for the year ending January, Veeva not only provides CRM solutions but also offers tools for drug development tracking and data analytics. Historically, Veeva’s CRM was built on Salesforce’s platform under a non-compete agreement that allowed Veeva to flourish by focusing solely on life sciences without direct competition from Salesforce.
However, this alliance ended in late 2022 when Veeva decided to move away from Salesforce’s platform to develop its own suite of applications, sparking Salesforce to counter with its own life sciences product. This strategic shift by Veeva prompted Salesforce to engage more aggressively in the pharmaceutical sector, capitalizing on customer inquiries about not wanting to switch platforms due to Veeva’s departure from Salesforce’s technology.
The market reaction was swift; Veeva’s shares experienced a decline of more than 3% on Tuesday to close at $217.43, while Salesforce’s stock gained $0.45 to $344.43, reflecting investor confidence in Salesforce’s strategic moves. Salesforce, already a leader in general CRM software, is looking to penetrate further into the life sciences industry, where its core product has yet to dominate. The company’s recent focus has been on innovation, introducing AI agents and enhancing data integration capabilities, which have been pivotal in securing some of the largest deals in their latest quarter.
Currently, Salesforce is intensifying its efforts, rapidly expanding development teams for its life sciences product, which is slated for a September launch. Amann noted that they are in active discussions with many of the world’s leading pharmaceutical companies, indicating a strong push to capture more of Veeva’s market share.
On the other side, Veeva is not standing still. Despite losing one of its top 20 customers to Salesforce, Veeva’s executive Paul Shawah remains confident, telling Bloomberg that most of their large clients, including giants like GSK Plc (GSK) and Novo Nordisk A/S, have reaffirmed their commitment. Veeva is also actively developing its new CRM independent of Salesforce’s infrastructure, which was previously restricted by their agreement. This move, the report notes, allows Veeva to explore new areas like customer service and patient management that were off-limits before.
However, Veeva’s Shawah cautions potential defectors about the readiness and cost of Salesforce’s product, asserting that Veeva’s long-standing focus on life sciences gives it an edge in optimization and possibly more competitive pricing. He emphasized Veeva’s ongoing advancements in CRM technology, tailored specifically for the complexities of the pharmaceutical industry.
This rivalry between Salesforce and Veeva illustrates a classic battle of established market dominance versus the innovative push of a new contender, with significant implications for how pharmaceutical companies manage customer relations, data, and compliance in an increasingly regulated and competitive environment. The outcome will likely influence not only market shares but also the technological evolution in pharmaceutical CRM solutions.
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