(Bloomberg) — Salesforce Inc. says… It is attracting several large clients from its former partner Veeva Systems Inc. There is increasing competition to sell software to the pharmaceutical industry.
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More than 40 customers, including the “big three leading global pharmaceutical companies,” have signed deals to use Salesforce’s soon-to-be-launched life sciences product, said Jeff Amann, executive vice president of industry-specific software lines at Salesforce. Some of those customers are switching from Veeva, he added.
For pharma-focused CRM software, Veeva is “an established player” with a market share of more than 80%, Dylan Baker, an analyst at William Blair, wrote in a November note. The company, which will generate annual revenue of about $2.72 billion in the year ending in January, also makes tools for tracking drug development and data analytics.
Veeva’s CRM product has historically been built on the Salesforce platform. The two companies had a kind of non-aggression pact dating back to 2007, which allowed Veeva to thrive without competition from its larger counterpart. In late 2022, Veeva announced that it had terminated the agreement, which will allow the company to build a broader range of applications.
This prompted Salesforce to develop a competing offering and begin trying to poach customers. “When Veeva made the decision to go its own way, many of those customers came to us and said ‘We don’t want to leave,’” Salesforce’s Aman said.
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 revenue growth slow. In an effort to expand, the company recently began offering AI agents and emphasizing its data integration product. Life sciences represent a rare industry in which Salesforce’s central product has not yet been saturated. The new product was featured in some of the largest deals signed last quarter, Salesforce said on an earnings conference call.
The San Francisco-based company is currently hiring development teams at a “very aggressive rate” for the life sciences product, which is scheduled to debut in September, Amann said. He said the company is “in active discussions” with several major pharmaceutical companies to use the product.
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