Created with Mandar Kulkarni and Manish Chhabra for Elements of Software Management at Carnegie Mellon University. Business prognosis created for Veeva Systems, a profitable SaaS company focused on the Life Sciences industry.

1. Veeva Systems
BUSINESS PROGNOSIS
By: Mandar Kulkarni, Manish Chhabra, Patrice Hall
October 17, 2016
ELEMENTS OF SOFTWARE MANAGEMENT

2. Veeva Systems (VEEV) is a
SaaS company focused on
the life sciences. Veeva’s
vertical focus created strong
growth, but Veeva faces the
challenge of declining revenue
growth and growth limitations.
Will Veeva be able to
leverage its strengths for
future success?
ILLUSTRATION SOURCE: VEEVA.COM

3. Internal Analysis

4. ● First cloud-based SaaS
for life sciences
● Built on Salesforce
Force.com platform
● Virtuous iteration cycle,
Every 4 months
Focused Growth
DATA FROM SCOTTRADE.COM
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

5. Chart source:
Slideshare: 2015 Emergence Capital
Industry Cloud Forum, Veeva CEO
Peter Gassner
Expanding Use of Veeva Products
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

6. Strengths give Veeva the ability
to pursue opportunities
● Multi-tenant cloud technology
● Financial health
● High LTV:CAC ratio
Strengths
VEEVA OPERATING MODEL (MILLIONS)
VEEVA REVENUE FROM SUBSCRIPTION
VS. PROFESSIONAL SERVICES
LTV
$4,500,000
CAC
$653,000
LTV:CAC
6.89
Charts created with Google Sheets,
using data from Veeva 2016 Annual Report
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

7. ● Leadership & team experience in life sciences
● Market leadership in Life Sciences vertical:
○ Global presence
○ 60% share for CRM
○ Preferred brand status
● Established customer base with a high switching cost
● Cloud & Multi-tenant architecture allows for non disruptive
updates and reduced maintenance hassles
1
Sustainable Competitive Advantages
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

8. ● Declining YoY
revenue growth,
risk of saturation
● Dependence on
Salesforce means
barriers to growth
& flexibility
2
Weaknesses
DECLINING REVENUE GROWTH
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

9. Market Analysis
& Trends

10. ● Addressable market size
○ Life sciences: $1.6 Trillion
○ SaaS: $38 Billion
○ Veeva: $5.5 Billion
● Vertical-faced SaaS
● Only company that targets this
market exclusively
2016 2018 %
Growth
Life
Sciences
$1.6T $1.63T 6%
SaaS $38B $90B 28%
Veeva $5.5B $6.05B 25%
RELATIVE SIZE & GROWTH
Analysis: Life Sciences Market
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

11. ● Veeva’s revenue growth
by geography
○ 47% of revenue outside
United States
○ Increasing foothold in Asia
● Total number of Veeva’s
customers are 450+ and still
growing.
Geographic Growth
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

12. DATA SOURCE: VEEVA SYSTEMS
UNITED STATES
2016: $339 BILLION
2020: $550 BILLION
EUROPE:
2016: $140 BILLION
2020: $220 BILLION
INDIA:
2016: $20 BILLION
2020: $50 BILLION
CHINA:
2016: $108 BILLION
2020: $200 BILLION
Market Growth Opportunities
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

13. ● Growing pharma market in India, China
○ Indian Pharma market $50 billion and China Pharma market
$200 billion by 2020.
● Growing market needs products to - maintain
operational excellence, manage clinical trials,
electronic records & content management
● Lack of any integrated CRM products
● Facilitate regulation compliance
Geographic Penetration Opportunities
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

14. ● Mergers in life sciences
● Govt. pressure on drug pricing
● Multi Channel Marketing
○ Veeva to deliver MCM over next 5 years
● Life sciences industry moving towards electronic record
keeping
● Data protection and security
Market Trends
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

15. Life sciences customers:
● High customer lifetime value ($4.5 M)
● High cost of changing vendors
● Low churn rate with only one customer
(Genentech) leaving Veeva system
3
Customer Analysis
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

16. Prognosis
& Desired State

17. Revenue Growth
● 25% Revenue growth YoY
● $647M Revenue by 2018
Product Growth
● Build new products
● Upsell
● Penetrate into competition
● Leverage rich data
Geographic expansion
● Attractive new markets
(India & China: $20B & $105B in
2016, $55B & $167B by 2020)
● Strategic acquisitions
● Increase Sales and Marketing
investments
Prognosis: Veeva’s Health in 2 Years
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

18. Revenue Targets
● $1B by 2020
● Meet expected 25% YoY
increase in revenue target for
next 2 years
● An aggressive investment in
M&A, R&D, S&M
● Resulting drop in retained
earnings, increased revenue
from market expansion
Desired State in 2 years
Market capture
● Life Sciences vertical
○ Increase footprint by investing
in R&D and Sales & Marketing
○ Product integration &
Multichannel marketing
○ Product development w/ data
& predictive analytics
● Adjacent verticals
○ Launch Veeva Vault in
adjacent verticalKulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

19. EXPAND TO
HEALTHCARE
EQUIP/SUPPLIES
Adapt products
To target Health
care equipments
and supplies
industry
CREATE A
CONSUMER
PRODUCT
App that manages
all of a user’s test
results & records
in one place,
collaboration with
doctors &
insurance
NEW EXPANSION
WITH CURRENT
CUSTOMERS
Create new
products for
supply chain
management or
administration in
life sciences
TARGET
HOSPITALS &
DOCTORS
Create products
that target needs of
SMBs in life
sciences:
hospitals and
private practice
offices
TARGET HEALTH
INSURANCE
VERTICAL
Adapt products
and/or acquire to
target health
insurance industry
Opportunities to consider
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY

20. ● Increase S&M for Veeva Vault
○ Vault: growth engine for Veeva
■ Upsell Vault to existing CRM
customers
■ CRM & Vault Integration
● Increase spending in R&D and
Sales & Marketing
● Predictive and data analytics to
solve unmet needs
Recommendations: Product Expansion
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

21. ● Enter the health insurance vertical and
capture market share
○ Health insurance TAM: $13 Billion
○ Leverage industry experience
● Explore Health care equipment &
supplies industry
○ Industry value: $678B
● Capture SMB market
● Renegotiate Salesforce agreement
VERTICAL EXPANSION
PLANNING (MILLIONS)
CURRENT CASH
AVAILABLE
ACQUISITION
BUDGET
SALES &
MARKETING
Recommendations: Market Expansion
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY

22. Conclusion

23. Veeva has the capabilities needed to meet its
goals. The company strategy will maintain its
financial health for the next two years, making it
an attractive investment. To reach and exceed its
revenue targets, the company should more
aggressively pursue areas of potential growth.
Conclusion
Kulkarni, Chhabra, Hall | CARNEGIE MELLON UNIVERSITY SILICON VALLEY