Veeva Systems by their own declaration is experiencing spectacular growth. In their latest earning call for Q3 2021 (from December 2020), they confirmed total revenue was up 34% year over year! The global pandemic certainly contributed to this growth by their own admission, but they have taken steps to ensure this streak continues. In our experience and analysis with Veeva, we see three main points to consider when starting or renewing agreements, because understanding their place in the market and the way they sell are just as important as their functionality.
Below we outline these three areas and offer approaches to help ensure you get the best value for money when Veeva’s engaged or considered.
Veeva’s Management and Salespeople…are probably not your friends.
Why do we say this? The common theme in Veeva negotiations, is their predilection to go ‘direct’ to Senior Management. They will foster and develop relationships with the most senior people in an organization, even when seemingly just for good customer relations. In addition, as with many industries, it can be a small community of leaders in the medical technology field. Said another way, people know people, and sometimes this is leveraged for the wrong reasons.
At the point in time, you are negotiating an agreement or haggling on price, they will attempt (and usually with good success) to go over right over the heads of middle or even senior management to the C-Suite to get what they want. Typically, what they want is a stifled negotiation wherein the C-Suite puts pressure on middle management to get ‘a deal done’.
So, before any meaningful negotiation with Veeva, prepare and forewarn your management and or underlings of what is to come. If you project a unified front and understand that businesspeople who are selling you something are not really your friends, you can likely minimize the impact of these tactics.
Leadership Team (LinkedIn links)
Background includes Peoplesoft, Salesforce, IBM, and currently on Zoom’s Board of Directors.
Responsibility includes sales and has background with Andersen and Accenture consulting.
Formerly with JDEdwards, Red Pepper Software, Oracle/Peoplesoft, and Medidata Solutions.
Before Veeva, she was CIO/COO at Knowledgeworks.
Market Respect and Financial Results
Another technology saying used to go something like, “No one ever got fired for buying IBM”. Certainly, that adage is no longer true, but in the modern age, there is a Life Sciences market dynamic growing around the sentiment that “You’re probably not going to get fired for buying Veeva.”
There are several alternatives to Veeva in the Life Sciences sector, but many now consider them to be the premium supplier of this space. Iqvia, Amplexor, Generis and several others are strong competition (see ‘Competitive Alternatives’ further down article).
That said, if Veeva is now operating as a Public Benefit Corporation (PBC), and is therefore contractually obligated to include its customers in its mandates of protection (not just its shareholders), how does it justify its incredibly high profits?
In 2020, Veeva generated $414,000 of revenue per employee, ranking it 2nd among the industry’s top 20 performers, just barely behind Salesforce.com, which ranked 1st at $431,000. However, Veeva beat everyone when it came to EBITDA performance, coming in at $169,000 per employee, besting even the highly profitable VMware.
At a 41% net profit margin, at best, Veeva customers are getting $0.59 of value for every $1.00 they spend. Hardly the outcome a declared protected constituent would expect.
Lastly, in their latest earnings call, their stated GAAP Operating Margin was 41%. That is impressive. All that is to illustrate, they are charging and premium for their product that is far above the market.
However, if you are not able or willing to pay a premium, then let’s move on to functionality, because you don’t have to pay more unless you really want to.
Where the competition may be falling short versus Veeva is their ability to bundle into a single integrated platform. This is attractive to many of their customers since they may not have the wherewithal to research, source, and implement functionality from more than one supplier. So, for many, ‘unbundling’ functionality can be a big ask.
In reality, Veeva’s capabilities can be unbundled and assigned different suppliers to great effect and savings. For those willing to manage a few suppliers rather than just one, the benefits can be many:
- You will most certainly pay less.
- Service from smaller, niche players is often better given their desire to win and retain your business.
- Requirements can be very specifically met by suppliers who are in the best position to meet them, rather than settle for a ‘bundled’ product.
- Flexibility is greater when you are less beholden or single threaded to a supplier.
What Others Say:
- “Easy to upload and track the status of review, remembers files, so can reference them later.”:
- “Workflow is clear, and it is easy to populate who you want to send the documents to.”
- “This program is full of the needed data to any salesperson who is trying to be better at his job.”
- “I use it mainly for workflow and distribution of approved documents.”
- “But when we moved to a global support, made by one of the ‘Big 4’, it was a nightmare to manage. Where I was disappointed it is about reporting.”
- “Workflow specific rules, and triggers are (a bit) more difficult to develop.”
- “As for many companies, I have reps on the road all week long, and depending on where they are, no 3G/4G connection. And sometimes no wifi in hotel.”
- “Sometimes there is a deviation between online and offline version, so I have to make a synchronization at least every day.”
- Secure database
- Easy workflows
- FDA compliant audit trails
- Ability to edit documents in Veeva
- More mobile friendly
- Perhaps and email approval ability
- Conga Contracts
- Nintex Process Platform
- Epicor ERP
Veeva Vault RIM:
- Certent Equity Compensation Management
- LogicGate Risk Cloud
- Oracle Risk Management Cloud
- ACTO Omnichannel Education for Life Sciences.
Ask some questions before you bundle all your ‘eggs in one basket’ with Veeva.
- Does our size justify a premium priced platform?
- What is important to us – specific functionality or a one stop shop?
- Can we explore APIs?
- If regulations are a concern, can we address those with other apps?
Once you answer all these questions, you may still come back to Veeva (or Management is telling you to come back to Veeva). But if that is the case, you should try to ensure there is at least a small part of the business where you can operate unbundled apps if only to have leverage them down the road in supporting alternatives.
Need Help with Any of the Following?
- Review, Selection and Sourcing
- Benchmarking and Pricing
- Ongoing Management
If you need more assistance with any of the above areas, please contact us here and we will connect you with a subject matter expert. We can assist from the research phase, through RFP, negotiations, final selection and implementation process.
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