- SA author Suhail Capital reports major Veeva Systems (VEEV -5.7%) client Genentech/Roche has dropped the company's cloud CRM software platform in favor of a custom product that leverages Veeva partner Salesforce's (CRM +3.6%) Force.com cloud app development (PaaS) platform.
- Suhail points out Genentech was the first major company to sign up for Veeva's life sciences-focused cloud CRM solution (back in 2007/2008). It believes Veeva lost less than 2K seats, and that the move "appears to be consistent with Roche's global initiative to standardize on the Salesforce.com platform."
- The author had previously argued Veeva's strategic partnership with Salesforce, through which Salesforce allows Veeva to use its infrastructure and provides it with "platform level functionality" in exchange for a fee (believed by Suhail to be ~20% of subscription revenue), limits Veeva's future growth, since it restricts the company from offering sales automation software to non-pharma/biotech companies.
- In addition, Suhail suspects Veeva will have to likely make a "big financial concession" to Salesforce when its current deal expires next year, given its dependence on Salesforce's platform.
- Pac Crest is defending Veeva. The firm points out Veeva and Salesforce have a non-compete agreement, and thinks the latter is motivated to see the former succeed.