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(Bloomberg) — Salesforce Inc . says it is picking up several large clients 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 one of the “world’s three pharmaceutical leaders,” have signed agreements 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 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 an estimated $2.72 billion in annual revenue in the year ending in January, also makes tools to track drug development and analyze data.
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, allowing Veeva to thrive without competition from its larger peer. At the end of 2022, Veeva announced it was ending the deal, which would allow the company to build a broader set of apps.
This spurred Salesforce to develop a competing offering and begin trying to capture customers. “When Veeva made the decision to go their own way, a lot of those customers came to us and said ‘we don’t want to go,'” Salesforce’s Amann said.
Veeva shares fell as much as 4.7% on Tuesday. Shares of Salesforce were largely unchanged.
In recent years, Salesforce, the leading maker of customer management software, has seen revenue growth slow. In an attempt to expand, the company has recently started offering AI agents and emphasizing its data integration product. Life sciences represent 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 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.
