When Veeva successful navigated its initial public offering back in 2013, it made history in the technology industry. It was the first time a company whose product was entirely built upon the Salesforce platform would reach this milestone. It was a significant validation point for Veeva, but perhaps an even more significant one for Salesforce itself. When Marc Benioff and Parker Harris started Salesforce a decade or so ago, no one would have suspected it would create a movement and ecosystem and essentially reinvent the way technology is delivered. But it did, and it has.

And so, when Salesforce announced its focus on growing from its $10 billion annual revenue figure to $20 billion recently, much was made of the opportunity that Salesforce has to achieve that goal by leveraging vertical offerings. As I wrote in a post reflecting on the goal:

The reality is that there is only so much growth that a vendor can gain out of a horizontal platform play. Eventually it takes deep vertical strategies to attain the next level of revenue, and one of the key strategies that Salesforce is going to rely upon is creating highly targeted solutions in key vertical industries.

It was timely, therefore, to spend some time recently chatting with Veeva Systems CEO, Peter Gassner. I’ve watched Veeva from a distance but hadn’t had a chance to really catch up with them post IPO. With a run rate climbing close to three-quarters of a billion dollars and a product offering that has broadened of late, it was good to get the low down. In terms of his history, Gassner has a varied past. Proud of his Computer Science degree (and using it to justify the fact that he’s not “just” a business guy, but a card-carrying geek, as well), Gassner had stints at IBM before joining PeopleSoft to work on database research. He ended up running the platform at PeopleSoft before joining Benioff at Salesforce when it was only a tiny organization of some 200 staff. Like at PeopleSoft, he built the Salesforce platform and that left him busy until leaving in 2007 to start Veeva. Gassner says that he’s been in training for 20 years for the CEO role, and the Veeva timing really felt right for him.

Why life sciences?

But if the CEO gig felt right, what was it that made Gassner decide that an industry vertical generally, and life sciences specifically, was the one to target? Gassner explained that he wanted to find an opportunity that, in his words, was “non-obvious.” Everyone thinks that the opportunity to sell technology to the life sciences market is small, but in fact, there is a lot of value there. Life Sciences is a $1.7 trillion industry that is increasingly reliant on technology – Veeva wants to be the most strategic technology vendor in the sector. And there is breadth within life sciences – lots of specific use-cases that Veeva can tick off, one at a time.

Why the Salesforce platform?

Gassner had, in previous roles, built platforms himself. He was well aware of the pain involved in building a platform from scratch and was keen to find a way to avoid reinventing the wheel. But here’s the thing, leveraging another company’s platform only works if that platform is geared towards what you’re looking to do. In the case of Veeva, a company that was looking to create a CRM-like tool for life sciences businesses, the Salesforce platform, built as it is upon the Salesforce CRM, made sense.

Gassner sees a contrast with a company like FinancialForce which is also built on top of Salesforce. They are, as he put it:

…built on top of CRM and hence not really geared for ERP. Salesfroce was the right tool for what Veeva was building, but probably a more difficult tool if you’re wanting to build ERP. In 2007 I probably wouldn’t have built on top of Salesforce if I had been building an ERP

Broadening the platform

I wanted to get an update on what Veeva has done to broaden its offering post IPO. Gassner explained that Veeva has two distinct parts of its business: the core CRM built around Salesforce and Vault, a product that actually existed at the IPO, but was a tiny part of the business. Vault is a content management platform and is now 40% of Veeva’s revenue. Vault will be, as Gassner sees it:

A second act for Veeva which is even bigger than our first act

Interestingly, Vault is built by Veeva themselves. I asked Gassner about this strategy of building in-house and whether it was an attempt to de-risk the business from being built on someone else’s platform. Gassner was adamant that wasn’t the driver for the technology decisions around Vault. As he told me:

We wanted to move into content management, and asked ourselves what is best platform we could use? We evaluated open source tools such as Alfresco, and contemplated building it on the platform we knew best, Salesforce. Nothing really worked – there was no tech or business model fit. So we decided to get busy and build our own platform.

Vault would seem to be a taste of things to come for Veeva – Gassner indicated that, as an application company, they’re keen to broaden their franchise. At this point, while Veeva is largely focused on life sciences, they will continue their nascent (at this time) steps to broaden that market. In particular, Gassner pointed to process management opportunities as one are that they are already seeing success and will continue to do so – chemical manufacturing, consumer packaged goods and the like.

One thing Gassner can’t see Veeva doing is moving into being a platform company in the way that Salesforce has. As he stated:

We’re not creating a platform for other independent software vendors to build upon but rather one that systems integrators and customers themselves can extend and integrate

On the road ahead

Gassner wants to build an enduring company. Veeva is at a $700 million run rate today and growing fast. They’re also (unusually) profitable returning 20-30% – enough to keep Wall Street happy and allow Gassner the breathing room to execute. His aim is to reach $1 billion run rate at or before 2020 and use strategic acquisitions to turbocharge that growth via an influx of technology and people.

Veeva is a pretty interesting company to watch and the future, as it both deepens and broadens, looks promising.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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