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Morningstar | Veeva's continued rollout of new cloud products bolsters its competitive advantage.

Veeva Systems was the first mover in providing CRM services specifically designed for pharmaceutical companies, and we believe the firm’s niche position, top-tier software, and operation-critical services will allow it to enjoy long-term economic profits on par with a wide moat firm. Veeva’s minimal client churn, substantial market share, and growing appeal outside of the life sciences space bolster our view of the firm as a market leader in the space.Veeva currently has two business segments, Veeva Commercial Cloud, its vertically integrated CRM products, and Veeva Vault, its horizontally integrated content and data manager. The Commercial Cloud products can manage all forms of interaction between a biotech company and its customers. This product portfolio is built through a partnership with Salesforce on the Salesforce1 platform. We estimate Veeva has grown its biotech CRM market share to at least 70%. Furthermore, by operating in the life sciences vertical, Veeva has developed software specifically tailored to these firms, thereby reducing its customer acquisition costs and increasing cross-sales with over two thirds of revenue growth in fiscal 2018 coming from existing customers. We expect Veeva Nitro, a newly announced cloud-based data warehouse offering dependent on the Veeva CRM platform, to strengthen this segment with AI-driven data analytics capabilities.The firm’s Vault platform offers a unified, customizable cloud product and benefits from substantial switching costs. This has been a boon to the firm, as increased need for regulation and quality control, especially in healthcare, warrant more sophisticated content management solutions. We believe Vault has the potential to attract additional customers outside the life sciences, such as chemicals and consumer packaged goods, and drive solid growth over the next few years. Looking ahead, we expect Veeva’s level of innovation, capacity to identify underserved industries, entrenched position, and ability to increase its total addressable market through new product launches to endure.