Created with Kevin Hsu,Prasen Shelar, Xinzhao Ma, and Zhongwu Shi for Foundation of Software Management at Carnegie Mellon University. Business forecast created for Veeva Systems, a SaaS based pioneer in the Life Sciences industry.

1. Veeva Systems
Software Business Forecast
Team : Take It Light!
Kevin Hsu, Prasen Shelar, Xinzhao Ma,
Sanghmitra Shrivastava, Zhongwu Shi
11-Dec-2017
1

2. Veeva, “The” Life of Life Sciences
Offers Cloud based:
● Customer relationship management (CRM)
● Regulated content management solutions (VAULT)
Collaboration with Salesforce:
● $500M agreement until 2025
Customers:
● 600+
● Largest pharmaceuticals and emerging biotechs
2

3. ● Stock trading based on rate of growth
Impacts:
● Quarter 3 revenue projections below
investor expectations
● Price per share dropped in quarter 2
● 24% growth outlook this year
Revenue Growth Downfall - 62% to 31% in 3 years
3
Q2-Q3 5.5
Q3-Q4 2.9
Quarterly %Growth
Lowest Quarterly
%Growth since IPO

4. Veeva’s Forecast for the next 2 years
4
Focus on
increasing YoY%
Revenue Growth
Market expansion
outside North
America
Focus on other
verticals in Life
Science industry

5. Business factor-1
Expand Product Strategy to Mitigate Weaknesses
and Leverage upon Strengths
5

6. “The Fading CRM” - Veeva’s Cash Cow
6
● Subscription accounts for 80% revenue
○ ~90% of this is derived from CRM
● Veeva CRM market getting saturated
○ YoY subscription revenue % slowdown
○ CRM Customer saturated
○ Relying on add-ons
■ MyInsights
■ Approved Email

7. Dependence on Salesforce means Barriers to
“Growth” and “Flexibility”
7
Salesforce: Veeva
Infrastructure for
"platform level
functionality"
20% of its
subscription
revenue
Growth limitations for Veeva:
● Restricted CRM from entering new sectors
○ Non-pharma
○ Biotech

8. Dependable Hero in Life Sciences
Financial health:
● Zero debt
● Free-cash-flow margin:
20%+
Sustainable competitive
advantage
● Superior brand loyalty
● High switching cost
Market leadership in Life
Sciences vertical
Expertise in regulations
compliance
8

9. R&D- Road to Innovation
Business Factor-2
9

10. Expansion Opportunities in Veeva Vault
10
● Reducing the
industry’s
reliance on
paper, pencils
and
spreadsheets.
● Data protection
and security
● Electronic
record keeping
● Can be used in
any business
with a quality
control
department.
Signed up one of the world’s
largest consumer packaged
goods companies.
In the past year, Veeva
Vault nearly doubled its
customers.

11. Yes, you are doing it right!
● 18% of total revenue spent on R&D in 2017
● 2% YoY increase compared to 2016
● Investing in Veeva Vault Clinical Suites:
○ Vault EDC
○ Vault eSource
This trend of increase in R&D
investment should continue.
11

12. Immediate Growth Potential in Life Sciences Market
Business Factor-3
12

13. Cloud Revolution in Life Sciences Market
Life Science industry ● Electronic record keeping
● Constantly changing laws and regulations
Saas IT model
Reduced internal IT
costs
Improved regulation
compliance
Improved collaboration:
● Outsourcing partners
13

14. $7B Addressable Market Opportunity
2017:
$6.32B
2019:
~$7B
2.7%
CAGR
Asia Pacific 5%
Europe and other 10.6%
Global
healthcare
industry
growth rate
● $7B market opportunity
● Untapped market outside NA
14

15. Around $2T Territory still Unexplored
$2T Life sciences
industry in 2019
$7B Life Sciences
software market in
2019:
Veeva’s Addressable
Market
$60B SaaS
enterprise
application market
in 2019
% CAGR
15
Life
Sciences
6
Saas 17.6
Veeva 2.7

16. The Road to Success…
16

17. Use 600+ customer base to introduce new products
17
R&D and S&M Investments
● Upsell Vault to existing
CRM customers
● More personalized industry
solutions
Predictive and Data
Analytics
● Solve unmet needs
● Leverage industry
experience
Put more layers to the
existing CRM
● Supply chain management
or administration work

18. A lot in store in India and China
Geographic penetration opportunity:
● Lack of integrated CRM product for Life
Science industry
● Growing market needs:
○ Content management
○ Managing clinical trials
○ Maintain electronic records
○ Compliance and quality management
18

19. Untouched verticals in Life Sciences
19
Health insurance
vertical is a low
hanging fruit
Market share:
$13B
Health care
equipment and
supplies industry
Market share:
$678B
Need of a
consumer application
● User’s test results and
records all at one
place
● Collaboration with
doctors and third party
services.

20. Key Takeaways
20
Aggressive
investment in
R&D may not
fetch quick
results.
Subscription
model: Difficult
to clock in
uber-high
revenue growth.
Longer-term
outlook :
Veeva
continues to
innovate
● Win over
customers
● Explore new
regions and
sectors