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Veeva Looks Beyond Life Sciences

We think the wide-moat firm has done well balancing innovation with profitability.

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 Veeva Systems (VEEV) was the first mover in providing customer relationship management services specifically designed for pharmaceutical companies, and we believe its niche position, best-in-class software, and operation-critical services will allow it to enjoy long-term economic profits on par with a wide-moat company. Veeva’s minimal client churn, substantial market share, and growing appeal outside the life sciences space bolster our view of the company as a market leader.

Veeva has two business segments: Veeva Commercial Cloud, its vertically integrated CRM products, and Veeva Vault, its horizontally integrated content and data manager. Commercial Cloud products can manage all forms of interaction between a biotech company and its customers. This product portfolio is built through a partnership with (CRM) on the Salesforce1 platform. We estimate Veeva has expanded its biotech CRM market share to 65%. Furthermore, by operating in the life sciences vertical, Veeva has developed software specifically tailored to these companies, thereby reducing its customer acquisition costs and increasing cross-sales; 66% of revenue growth in 2016 came from existing customers.

Vishnu Lekraj does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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