Salesforce Stokes Veeva Fight by Snagging Drug Customers

(Bloomberg) — Salesforce Inc. says it’s taking multiple large customers from former partner Veeva Systems Inc. in a mounting rivalry to sell software to the pharmaceutical industry.

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More than 40 customers, including a “top three global pharma leader,” have inked deals to use Salesforce’s soon-to-launch life sciences product, said Jeff Amann, executive vice president of Salesforce’s industry-specific software lines. Some of those customers are switching from Veeva, he added.

For pharmaceutical-focused customer relationship management software, Veeva is the “well-entrenched incumbent” with more than 80% market share, wrote Dylan Becker, an analyst at William Blair, in a November note. The company, which will generate an estimated $2.72 billion in annual revenue in the year ending in January, also makes tools for tracking drug development and data analytics.

Veeva’s customer relationship management product was historically built on Salesforce’s platform. The two companies had a kind of nonaggression treaty dating to 2007, which let Veeva thrive without competition from its larger peer. In late 2022, Veeva announced it was ending the agreement, which would allow the company to build a wider suite of applications.

That spurred Salesforce to develop a competing offering and begin trying to poach customers. “When Veeva made the decision to go on its own way – many of those customers came to us and said ‘we don’t want to leave,’” Salesforce’s Amann said.

Veeva’s shares fell as much as 4.7% on Tuesday. Salesforce’s shares were virtually unchanged.

In recent years, Salesforce, the top maker of customer management software, has seen revenue growth slow down. In a bid to expand, the company has recently begun offering AI agents and emphasizing its data integration product. Life Sciences represents a rare industry in which Salesforce’s central product isn’t yet saturated. The new product figured in some of the largest deals signed in the most recent quarter, Salesforce said on an earnings conference call.

The San Francisco-based company is currently staffing development teams at “a very aggressive rate” for the life sciences product, which is scheduled to debut in September, Amann said. The company is “in active discussions” with many of the largest pharmaceutical companies to use the product, he said.

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