(Bloomberg) — Salesforce Inc. says that it is taking a number of large customers from former partner Veeva Systems Inc. in increasing competition to sell software to the pharmaceutical industry.
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More than 40 customers, including “three top global pharmaceutical leaders,” have inked deals to use Salesforce's soon-to-launch life sciences product, said Jeff Amann, Salesforce's executive vice president of software lines. n specific to the industry. Some of those customers are switching from Veeva, he added.
For pharma-focused customer relationship management software, Veeva is the “established incumbent” with more than 80% of the market, Dylan Becker, an analyst at William Blair, wrote 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.
Historically, Veeva's customer relationship management product was built on the Salesforce platform. The two companies had a sort of non-aggression pact dating back to 2007, which allowed Veeva to thrive without competition from its larger peers. At the end of 2022, Veeva announced it was ending the deal, which would allow the company to build a broader suite of applications.
That prompted Salesforce to develop a competitive offering and start trying to poach customers. “When Veeva made the decision to go its own way – a lot of those customers came to us and said 'We don't want to leave,'” said Salesforce's Amann.
Veeva shares fell as much as 4.7% on Tuesday. Shares of Salesforce were virtually unchanged.
In recent years, Salesforce, the leading maker of customer management software, has seen revenue growth slow. In a bid to expand, the company has recently started offering AI agents and emphasizing its data integration product. Life Sciences represents a rare industry where Salesforce's core product is not yet saturated. The new product was part of some of the biggest 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.