Cloud computing has become one of the growing areas of technology with a variety of computing and storage options. Veeva Systems, symbol VEEV, has carved out an important niche, tapping into the growing pharmaceutical and biotech industries with their specific needs for data and client information. Veeva's June 2013 announcement of its intention to conduct and IPO has provoked interest across the tech stock community.
Veeva Systems was founded in 2007 by its current CEO Peter Gassner. A twenty-year veteran of the software industry, Gassner brought his experience at IBM's (NYSE:IBM) relational database development research department to solving the problems of pharmaceutical companies and new life science industries.
The company has a young and energetic leadership team that looks for new ways to serve their customers in an ever-changing environment. The team has continued to find innovative ways to provide information management and communication methods that lead the cloud computing field. With their customer relationship management feature and mobile deployment option, Veeva has created single applications that manage their clients' complex needs. The company took on tech giant Oracle (NASDAQ:ORCL) to provide better, more specialized services for clients in the pharmaceutical and life science industries. The company is based in Pleasanton, California.
Veeva Systems plans to offer 13 million shares of common stock to the public during the week of October 14th. The price is expected to be between $12 to $14 per share. Last year, the company generated revenues of $120 million and has over 150 customers, including leaders in the pharmaceutical industry such as AstraZeneca, Novartis and Eli Lilly and Company. In 2008, the company received the backing of venture capital company Emergence Capital for $4 million. Tech investing is expected to continue to increase for Veeva's client industries, making it a good bet for success in the future.
Veeva has positioned itself to move ahead in the medical cloud-computing field with its current strategy. Spending only 25 percent of its revenue on product promotion and with a proven record in product quality, the company is expected to use the money from the IPO to expand its client base and create additional applications to serve the needs of their niche market. We recommend this cloud IPO if it prices in the expected range of $12 to $14 or slightly above and if the size of the deal is not increased.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This article is neither a recommendation to buy or sell shares, and investors should always do their own research including reading the S-1 and meeting with their financial adviser.