(Bloomberg) — Salesforce Inc. says it is acquiring several big customers from its 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 one of the “top three global pharmaceutical leaders,” have signed agreements to use Salesforce’s soon-to-be-launched life sciences product, said Jeff Amann, executive vice president of Salesforce’s industry-specific software lines. Salesforce.com 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, William Blair analyst Dylan Becker wrote in a November note. The company, which will generate annual revenue estimated at $2.72 billion in the year ending in January, also makes tools for tracking drug development and data analysis.
Veeva’s customer relationship management product was historically built on the Salesforce platform. The two companies had a non-aggression treaty of sorts dating back to 2007, allowing Veeva to thrive without competition from its larger peer. In late 2022, Veeva announced it would end the agreement, allowing the company to create a broader set of applications.
That prompted Salesforce to develop a competitive offering and start poaching 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. Salesforce shares were virtually unchanged.
In recent years, Salesforce, the leading maker of customer management software, has seen a slowdown in its revenue growth. In a bid to expand, the company recently began offering artificial intelligence 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 among 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 hiring development teams at “a very aggressive pace” 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.