With its Healthcare Cloud, Veeva Shows the Power of Industry Clouds
October 28th, 2013 By: Jason Verge
Cloud isn’t always one size fits all. By specifically targeting the healthcare and life sciences industry, Veeva has established a clear leadership position in a potentially lucrative niche where few other players have gained major traction.
Veeva is a profitable cloud computing service provider specializing in healthcare and life science. The company counts big names such as Novartis AG, Merck & Co., Eli Lilly and Co and Bayer Healthcare AG as customers.
On Oct. 16 Veeva raised about $194 million after its IPO was priced at $20 per share, well above the expected price range. The first day of trading was a massive success, with shares nearly doubling during Veeva’s debut, hitting a high of $39.64 and valuing the company at nearly $5 billion. Shares of VEEV closed Friday at $43 in trading on the NYSE.
What is the company doing to enamor both investors and its customers?
Profitability, Revenue Growth = Win on Wall Street
Veeva is unique because it is a cloud provider with profitability and high growth, with revenue rising from $29.1 million in 2011 to $129.5 million in 2013. The company cites lower customer acquisition costs, efficient marketing and focus.
“What is it we’re doing differently? It’s this notion of industry cloud,” said Matt Wallach, co-founder and president of Veeva. “Veeva is specifically tailored to life sciences, a vertical that can’t use ‘one size fits all’ types of cloud offerings. We’re a beneficiary of the whole move from client/server to cloud. We have deep applications n specific areas within one industry. Big Data that is something that is possible with cloud computing. Another benefit is the level of functionality. All of our R&D is super-focused on what we can do in this industry.”
The company has three product lines, but the best example of Veeva’s vertical cloud approach is its customer relationship management (CRM) offering, which uses the platform from Salesforce.com essentially as the big database. “It’s better than a database, but for us it’s just a backend,” said Wallach. “Starting from the data model, The CRM is much more built from the ground up.”
Infrastructure from Salesforce.com, Data Centers from NTT
“While the CRM uses Salesforce.com as the backend database, our two other product lines, we’ve built from the ground up,” said Wallach. “”We can’t use AWS for this. We have managed data centers from NTT. They keep up the hardware side, we keep the software side running.”
The company has data centers in the US, a data center in Japan, the same building as Salesforce.com. Wallach says there will be a data center in 2014 in Europe, most likely in the same building as Salesforce.com.
The architect behind Veeva’s infrastructure is Mitch Wallace, who set up all of Salesforce.com’s internal systems and was managing their data center infrastructure. “Having set up the world’s largest Software as a Service Infrastructure, Mitch is unimpeachable,” said Wallach. “We took the best possible cloud expert.”
“Multi-tenant cloud is a fundamentally better for both us and customers,” said Wallach. “By having all of these applications targeted at one industy, we become the innovation engine for the customer.”