(Bloomberg) — Salesforce Inc . says it is getting many big customers from former partner Veeva Systems Inc. in a growing rivalry to sell software to the pharmaceutical industry.
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More than 40 customers, including a “three global pharmaceutical leader,” have signed agreements to use Salesforce's soon-to-launch life sciences product, said Jeff Amann, executive vice president of Salesforce industry-specific software lines. Some of those customers are switching from Veeva, he added.
For pharma-focused customer relationship management software, Veeva is the “well-entrenched leader” with more than 80% of the market, Dylan Becker, an analyst at William Blair, wrote in a November note. The company, which will generate about $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 the Salesforce platform. The two companies had a non-aggression pact of sorts 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 have allowed the company to build a broader set of apps.
This prompted Salesforce to develop a competing 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 go away,'” Salesforce's Amann said.
Veeva shares fell as much as 4.7% on Tuesday. Shares of Salesforce were almost flat.
In recent years, Salesforce, the leading maker of customer management software, has seen revenue growth slow. In an effort to expand, the company has recently begun offering AI agents and highlighting its data integration product. Life Sciences represents a rare industry in which Salesforce's core product is not yet saturated. The new product was among some of the largest deals signed in the most recent quarter, Salesforce said on an earnings 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.
