All right. Thank you all for coming. Good to see a lot of familiar faces, some new faces. And thank you, everyone, on the webcast that's joining us as well. My name is Rick Lund.
I head up IR, Treasury and Corporate Development here at Veeva. Please don't hesitate to reach out to me either in the wake of this event or if you ever need anything in the future to learn more about our company. Some quick logistics. Let's see, please silence cell phones, if you would. If you didn't notice on the way in, the bathrooms are just down the hall, past the registration desk where you checked in and in that hallway, there's a sign.
In terms of questions, please hold all those to the end. We've got kind of a block of time at the end where we'll do consolidated Q and A with everyone on the management team. This is the agenda that we've got today and looking forward to sharing additional insights, thoughts on Veeva and where we're headed in the future. Okay. Now, finally, bear with me for the obligatory disclosure here.
Okay. During the course of today's presentations, we will make forward looking statements, including statements regarding trends, our strategies and the anticipated performance of our business. These forward looking statements are based on management's current views and expectations and are subject to various risks and uncertainties. Actual results may differ materially. Please refer to the risk factors included in our most recent filing on Form 10 Q, which is available on the company's website at viva.com under the Investors section and on the SEC's website atsec.gov.
Forward looking statements made during today's presentation are being made as of today, October 2, 2009. If the presentations are replayed or viewed after today, the information presented may not contain current or accurate information. Veeva disclaims any obligation to update or revise any forward looking statements. In the presentations, we will also discuss certain non GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can found in the appendix of today's presentation, which will be posted as a PDF on our website.
And with that, I will pass it off to our Founder and CEO, Peter Gasser.
Good afternoon, everyone. How's everybody doing? Good. I see some good folks, see VIVA folks over there. I see a lot of new faces and old faces.
Thanks for being here. It wouldn't be much of an investor and analyst conference without you. So that's very good. All right. What you'll hear me talk about today, sort of the summary before we get started is how we're becoming a strategic partner to a very important industry, a very big and important industry to society and we're becoming a very strategic technology partner.
You'll hear about what we call the Veeva Way. That's our business model and that's about our culture and our operating model that we've developed that gives us this growing profitable business over the long term. You'll hear about some new markets that we're getting into and some traction in existing markets and how we're developing leadership position in these markets. And then we're going to dive a little bit into innovation, specifically innovation around the software. So we're going to touch on a few innovative areas of software and actually you're going to see a little bit of software code here.
So I know that will excite you guys. Start with our vision and values. I show this slide many times every quarter. I show at the start of every board meeting, every significant large customer meeting, management team meeting, company leadership meeting and you can actually learn a lot about Veeva, where we are and where we're going and how we got here by this vision and values, it's a very operative thing. So vision is where we're going, we're building the industry cloud for life sciences, software data, professional services, network of partners that helps the life sciences industry get more efficient and effective.
So that's what we're doing. How we make decisions along the way are our values and their stacked rank. Number 1 is do the right thing, that's about having the right morals, honesty, integrity, do the right thing while other people are not looking, right? It's about being not only about the money, we're about having a profitable growing company that's doing the right thing for our customers, society and our investors. Customer success is quite very important to us, right, and it has three parts.
It's first for the people at our customers, they need to be able to depend on us. We need to come through for them. And then it's about the companies, the companies in life sciences, the large life sciences companies all the way to the small biotechs, our products need to provide ROI and be dependable for them. And then the third customer is really the industry itself And we feel that that is a customer of ours. And we have to make the industry authentically get better over time.
So that's customer success. Employee success is a little more straightforward. That's for our people. They need to it needs to be a place where they can do their best work. They can enjoy it.
They can grow. They can be challenged. They can look back at the end of their Veeva career and think, wow, that was a good one. So that's what we're after, employee success. And then speed is to remind us to keep it going as we grow, right.
You have to keep that speed, that startup speed and that's hard. You have to fight sense of gravity to do that. So that's our vision and values. We make large decisions based on our values and small decisions based on our values, very operative part of EVA. Now let's talk about our operating model, Veeva Way and what we do there.
So our goal, we say strong growth and profitability. Our goal that's been our goal from the beginning really. I always thought, well, that's kind of the way you run a business. You have growth and profit and it's not that complicated. And we just started out that way and we've continued that way.
So this is our 10th straight year of growth and profit. That's pretty good. We got profitable actually in our 3rd year of the business. And we're very disciplined about the markets we get into, we get into big markets, the right size markets, the right markets, we get into them with a purpose of being the leader over the long term, and you'll see that in our performance. Then when we pick a market, we want to innovate there.
You always have to innovate in technology, otherwise you're getting to the same place as somebody else was 5 years later than they did. So you always want to innovate and you have to keep going and achieve that product excellence. When we first started the company, we always said, well, we'd like to have not very many products, but the products we have should be the clear leader and they should be excellent. And that's retained true over the last 12 years. And then customer success, we talked about that as a value.
It's very important to our business model because we do reference selling. We make customers happy and successful. We pollinate that knowledge to other customers. That's how we grow the business. So that's the Veeva way.
Now Veeva soon that will be have 3,000 people. And that seems like a lot when you think 12 years ago it was 2 people in my front lawn, right? So 3,000 seems a lot. Well, why not the garage? My wife, she believes that's for parking cars.
So we started the company actually in the lawn, not even the garage. And when I look back now over that, the greatest asset we have is these almost 3,000 people that work together. They have this shared vision and shared values. They have the shared way of working, the operating model that they all know. They have the right skills for what they're doing.
That's super hard to replicate. I don't know how I would replicate that. That's a labor of love that's it's really hard. It's a beautiful thing. I really like being part of it.
I would be daunted if I had to replicate it because it's very complex. That's our greatest asset. I wanted to touch on one interesting thing also, we call it Generation Viva. That's a really great thing that we're doing for the industry. We formalized this about 3 years ago, Generation Viva.
This is about hiring straight out of college, which we started to do roughly in 2011 in a minor way. And about 3 years ago, we branded this program and we really stepped on the gas there. So this year, we'll bring in about 150 people straight out of college, a mix in U. S. And Europe and in consulting and engineering.
And we have a very structured program and career path for them that's based on learning while doing. This program is a great gift to the industry because it's developing the future leaders of the industry. So I couldn't be more happy about this program. We do an off-site with this group, 1 in Europe, 1 in the U. S.
Every year. This year it was in Denver. Last year it was in my hometown of Portland. And that's where you really see the depth of skill and talent that we're developing in Veeva. And that's going to be a gift that keeps on giving.
I get a charge out of it when I see parents, people my age and they're, oh, yes, I want to get my son, my daughter into Generation Viva, because I know that will it's a good place to work, it's a good future and it's a company with good values, which becomes very parents have that kind of perspective, right? When you're 22, 23, it's hard to have that. So I really feel that Generation Viva is really something good we're doing overall for society and the industry. And well, this year maybe 150 people, Generation Viva next year probably 200. Okay, so that's enough about our vision values culture, let's talk about some financial stuff if you guys are interested.
I think you probably are. So we reached 1,000,000,000 dollars our target goal, we put that out in 2015, and we reached that 6 quarters ahead of time. So that's pretty good and pretty good execution by the Veeva team, about $500,000,000 of that is in commercial cloud, a little more than $500,000,000 is involved. We have a strong profit margin. So that's what we've done, and we it was a very aggressive goal when we set it out, and I'm very pleased that we hit it ahead of schedule and still have room to grow and still have the tight feeling with our employees and our customers.
But as we look forward, the thing we want to look forward is to is 2025. We started focusing on the 2025 goals. Towards the end of last year at a board level and a strategic level and we started to really put some operational things in place this year And these are our financial targets. So for calendar year 2025, we are planning to targeting a $3,000,000,000 revenue run rate, about $1,000,000,000 of that in commercial cloud, about $2,000,000 of that involved and still strong profitability. So a couple of points on that.
This is mostly organic revenue and this is mostly inside of Life Sciences. So these are our financial targets and there's many, many things, operational targets that we need to do to meet these financial targets, and that's some of the things I'll talk about next. So when we talk about our revenue target and our 2025 goal, it's not just about the $3,000,000,000 This is a slide that I've started to show this year in Veeva. Now when I show it, I don't say $3,000,000,000 I put 10,000 people, because that's the more operative team operative number to the Veeva team. How can we operate as a team of 10,000 people roughly in 2025?
Room to grow means when we get to this stage of 2025, dollars 3,000,000,000 revenue, roughly 10,000 people, we should have plenty of room to grow beyond there and you can't wait till you get there to figure out where you're going to grow. So that work is actually starting now. The work of what is our room to grow beyond 2025, surprisingly that work starts now. Still Veeva means when we get there at 2025, dollars 3,000,000,000 revenue, dollars 10,000 people, it still feels like Veeva. It still feels like that company that was 50 people, that was 1,000 people, that was 3,000 people, that was 10,000 people.
And what the essence of that is that it's a company that still has our values and still has a consistent set of values in the company, still has an operating model that people understand. But very critically, it's a company that can still change, because that's what can slow you down. Still Veeva doesn't mean constant. It means actually still able to change even when you have 10,000 people. So this is a slide that, oh, I guess this year I've probably shown, I don't know, at least 50 times to various people and it's a mantra and it's the goals that we're working for and then it's a lot of small things to get there in the goals, process things, customer things, training things, talent attraction things.
So these are our goals, what we call Veeva 2025. Part of that is growing to 10,000 people or so, right? And that's not easy, and we want to grow the right way. First, the team. It's how do we attract the right talent at scale.
We have to change our processes because we have to attract talent at a scale larger than we have before. So we're putting in new talent attraction and quite innovative talent attraction processes because the company that we become in 2025 is largely going to be determined by the people we hire over the next 4 years. That's going to become the culture of the company, that's going to become the feeling of the house. So we are putting a lot of effort into that, I'm putting a lot of effort into that, the whole management team and even the Board putting effort into that. We have to have big goals, goals that match the size of the team and that's what I'm very excited about.
It's harder to manage a big shift for sure, but you can accomplish more. You have to have the right goals. There are certain things that a 10,000 person company can accomplish that a 50 person company cannot. And yes, it's harder to coordinate, but it's very satisfying when you do. It's like a big orchestra.
It's more complex than just playing on your own, but it's more satisfying. And then we have to keep our speed, that comes with the speed value. There's a lot of process things we're doing and will do to retain our speed, break down problems into smaller groups, limit the number of layers in meetings, celebrate the experts in the company, we have a thing in the company that we call, we have managers and experts. And managers are what they are, managers, experts are the non managers, and we will get we will get on people that, hey, there's no experts in this meeting. There's only a bunch of managers.
So that's kind of how we're no, I would say that's one of the ways we're trying to retain our speed. There are many process oriented things. I guess my point is, you can't just say keep your speed. There are things you have to do. There are process things that you have to do to do it.
It's very intentional. Autonomy is critical when you get to 10,000 people. You have to have autonomous groups. The people we want to attract, they operate better in autonomy. They get a thrill out of they've got the ball.
If they drop the ball, it's going right to the floor. Those are the people we want in the company that creates innovation. So we have to have autonomy, especially for our start up new business areas that creates the energy and innovation and we constantly say we're okay with some inefficiency. That's not our goal is not an efficiency goal. Our goal is an innovation and a customer success goal.
So you can't have it both ways. Speaking of innovation, a lot of people would say, yes, it's about technology and that's true. And we do focus there, but it's also about the operating model, which is how do we sell? How do we compensate? How do we run meetings, how do we attract talent, how do we do professional services, how do we do customer communications, all of those things about our operating model, we have to innovate there.
And then bringing in new people with new ideas and knitting them in fast to the company, that's a critical way you get innovation. I think if you don't focus on these things, your innovation will slow down. If you do focus on these things, I think there's no reason why it will slow down. All right. Now I've talked about Veeva, our operating model, our principles, sort of how we do our work.
Now let me talk specifically about our industry, the life sciences industry and how we're getting to be a very strategic partner to a very large growing and critical industry. So being you know about technology and you know about this evolution of the cloud. I'm old enough to actually have lived this evolution. I started off as a programmer at IBM on the mainframe PeopleSoft in the early days of cloud at Salesforce and then starting Veeva, the industry specific stuff. I've lived this evolution.
And what we've seen is software has gotten much better, much more important, much more critical, much more valued, much more variety because of the cloud. It's just turbocharged the software for sure and the proof is in the pudding on that. Medicine is right now undergoing a similar kind of evolution and dramatic. And when you think about it, medicine deals with human life, that's more dramatic than software, right? We are now doing some things that relate to human life that are pretty amazing and touches all.
Starting out the old days, right, you, hey, I chewed on this bark, it made me feel better, let me chew on more of that bark, right? Natural herbal medicine then kind of refine that stuff into then small molecule medicines that we could produce from chemicals. Then we get into large molecules, injectable organics that can target very specific diseases. And when actually when Veeva started in 2007, the bulk of the revenue in life sciences was actually in the small molecule, actually was in 2,007. Now the largest part of the revenue is in the large molecule.
Small molecule is still important, but the large molecule has been with a growth and is bulk of the revenue. What we're moving into now is precision medicine and that won't go so fast as cloud software, because we're dealing with something a bit more profound and complex. We're dealing with human life. We're dealing with ethics. And we're dealing with like workings of a complex mechanism like the liver or the brain or how do cancer cells work, very complex processes, but it's a revolution.
Precision medicine means very targeted therapies to a very specific issue with a very specific patient, sometimes fixing the DNA target or targeting that cells specifically with a cell therapy or gene therapy, stuff that 50 years ago you definitely would have thought that was science fiction. Now we have companies with approved medicines that are cures, absolute cures and the payment cycle is different. Well, you have to pay us over 5 years because this is a cure. It's not a one time it's not an ongoing medicine. You do this injection, your blindness is cured.
Okay, how do you want to pay for that? What's the value of that medicine? So this is going to be a complete revolution in medicine and it's going to cause more technology dependence when you do this because it creates obviously a prolifera of medicines because you're going to be able to target more unmet needs and it's a more complex medicine. So this is a fundamental change for the industry, actually for society as well. So it's important to have the context.
This is the change that our customers are going through. But again, it is much more gradual than the software change because it has to be. So large and growing industry, this is a $2,000,000,000,000 industry. When we started in 2007, the statistics said this is a $1,600,000,000,000 industry. Now it's a $2,000,000,000,000 it's still growing at 5%.
So that's a really large industry and it's very important to what it's doing, still growing. So we want to be the main technology partner to this very large industry. It's kind of something new. Before cloud, you couldn't do this and Veeva is sort of at the vanguard of creating an industry cloud. So some sense we're inventing it as we go along.
I remember when I started in 2007 and I told my some of my friends what I was doing, they said, wow, that's really small. You're making like software for a very specific industry. And I thought, no, it's actually not small and everything large starts small. I still feel that this industry called for life sciences actually underestimated still, strangely enough. So software and data professional services, that's what we're doing and we're making solutions that work for the R and D side, the drug development side of life sciences, the medical side and the commercialization side, because that's what our life sciences customers do.
They develop products, they have to bring them to the clinical trials phase, get them approved for sale and then they have a certain period of time to commercialize them before the patents come off. That's the way the model works. We're the 1st vendor to 1st technology partner to do things that span all of these areas, never been somebody before like that. I would say we're still in the early days becoming a strategic partner, but we're definitely in the leadership position. We will have to work hard to retain that position, keep our humility, keep that customer success going, but I really like where we're at so far.
When I talk about being the strategic partner to the industry, here's some of the things I think about, about constantly innovating, constantly innovating. When we're talking about becoming the strategic partner, you have to push yourself to innovate. The innovation push won't come from the outside. We have to push ourselves. That's our responsibility to innovate.
Every product needs to be excellent and that's just relentless. That's part of our DNA. It means putting the right product people on things and keeping them on it and keeping the iteration and having product processes that are scalable and that's something that Veeva has perfected. We are a multiproductline, multicodebasedcompany And we can do it excellence in parallel. And that's pretty hard to do.
A lot of software companies can't do that. But I feel good about where we're at there. We also need professional services excellent. This is our people that interact with our customers, our account executives, our professional services people, billable consultants, our customer support people. We have to take the long term view industry doing very important things.
It's not suitable for the strategic partner of this industry to take a short term view or a quarterly view. It's just not suitable. It always has to be long term. And we have to have the trust. We have that trust now with our customers and it helps a lot.
It helps us be close with our customers, get new ideas for new products. It helps us ramp early products because of that trust. They believe in Veeva. We have to retain that trust by delivering every time. So that's something that is precious.
We've earned it over 12 years. We have to keep it going. So what does this add up to? It actually adds up to a benefit to society. We are helping the life sciences industry get better.
That's going to help society for sure. Life sciences is the technology of healthcare. When you think about it, a doctor 100 years ago when a patient came in with breast cancer, their job was let's make that young mother feel comfortable. Let's make her feel comfortable. Let's get the father ready and that's what we have to do.
The doctor would have felt pretty helpless because there's nothing they can do and they want to give care. It's the medicines, it's the technology that can fix these things. And that's what the life sciences industry is doing. It's a real benefit to society because it can fix people, right? It can get them healthy and suffering, reduce cost, medicines, technology can reduce cost in healthcare.
So we're really proud to be part of that. We want to be essential to every life sciences company and appreciated by every life sciences company. Those two things sometimes don't go together, but we've had that goal for many years, be essential, be appreciated, appreciated by life sciences company. Therefore, it's actually a benefit to society. I would say the whole Veeva team is pretty energized by that.
Veeva is not all about the money. Yes, we do make financial results and we keep an eye on that for sure because you have To provide a benefit to society, you have to be a business that's well run. But we really believe in this benefit we're bringing to the world. All right. So that's the high level picture of how we operate our industry, our benefit to society.
Now I'll talk a little bit about products. You'll hear more about products from Paul and Avril, but I'll talk about our products starting in the commercial area, that's sales, marketing and medical. That's commercial cloud. That's our product suite for the commercial area. It's anchored by our CRM product that's built on salesforce.com.
That's where we started. That's our home state. We have great market share there and great customers and innovation. We've added new products in there, territory alignment products, our commercial data warehouse, Nitro, our AI product, Andi. We have products around the review and approval of content, both commercial content with promo mats and medical content.
We have our reference data offering with And and our customers use these products to engage with their customers, their HCPs, their healthcare providers, their healthcare organizations, their key opinion leaders, the payers, the pharmacies. These are the customers of our customers and our software suite and our data suite helps them engage effectively with their customers. And that's getting more and more complex as the medicines get more and more complex. That's a very complex thing to do. Our software helps them do that.
I'd like to touch on something else that's really important to life sciences and that's the situation with IQVIA. So IQVIA is a company they have sort of a near monopoly in what's called sales data, particularly in the U. S. And Europe. They gather the sales and performance data that the industry is measured by.
And there, if you look at the top pharma companies, basically all of them using IQVIA. It's kind of a it is a monopoly. They're attempting to extend this data monopoly to software. So if you look at the new Veeva products, Veeva Network, Nitro, Andi in the commercial area, they don't let this IQVIA data be put in the Veeva software because they have their own software and they want to extend that monopoly. Now this is a novel concept.
You couldn't do this before cloud software. You couldn't extend a data monopoly to software because it didn't make sense without cloud software. You sell the data to Pfizer, Pfizer puts it in their software, whatever Pfizer bought the data. But since this cloud software is operated by a 3rd party, Veeva, they're using restricted access to their data to extend this monopoly. That's really bad for life sciences.
That's bad for people that are dying of unmet needs today, because it's slowing down life sciences, bad for patients, increased health care costs. So this is not a good company. The history of this is 2014 IQVIA bought or IMS at the time bought a company that had some software. Therefore, they started putting restrictions in there. Veeva tried to work this out for 3 years.
I tried personally to work this out pretty hard for 3 years, because I didn't want to file any legal action. You want to work this out, because the legal action doesn't help the customers. 2017, we realized, hey, IQVIA, which was IMS at that time, they don't want to work this out. So we filed antitrust action in 2017 about Enviva network. We filed another one in 2019 around Nitro when it would became clear they would block nitro.
Trout date is expected in 2021 or 2022. We got a little bit of bad luck of the draw. We got assigned a district in New Jersey where they have a lot of cases backlog and they have some judge appointments that they haven't been able to do. So yes, this will take from maybe 2017, maybe all the way to 2022, it's a 5 year battle. But we have consistency and we'll see this thing through because it's the right thing to do for the industry.
The effect on Veeva so far is that network, NITRO and Andi, they're really stalled for our customers that use IQVIA data and many, many, many of them do. There are some that can use alternative data sources in certain regions, in certain therapies of medicine, they don't need the IQVIA data, and that's where we're having good success with Nitro and with Andi and with Network. Core CRM is not directly affected because that started long before IQVIA put in these restricted policies. So it's not practical for them to change that now. And this doesn't affect Development Cloud because this is commercial data from IQVIA.
So this is not positive for the industry and you'll see Viva calling out IQVIA on this. What can you do about it? I guess you can put pressure on IQVIA in your own way. You can call them out about it and don't encourage them from doing this, don't support it. All right.
Now let's talk about some positive things going forward after we talk about IQVIA. Crossix, we just recently announced that acquisition that was last Thursday. So it's very fresh news. What about cross 6, that will be a game changer. It's a data science play first and foremost.
It's about patient data in the U. S. Founded in 2,005. These are expert they were doing data science before the term data science exists. They've got hundreds of terabytes of patient data going back multiple, multiple years.
They've got data on 90% of the people in the U. S, 70% of the subscriptions in a very innovative privacy safe way, about 200 people based in New York. What do they do with that data? Their main product is called DIFA. It's a platform that helps life sciences companies measure and optimize their marketing campaigns, be that media or digital marketing.
And that patient oriented marketing and digital marketing is a big number for life sciences companies, individual life sciences companies themselves in the U. S. Can spend 100 of 1,000,000 of dollars on marketing. And as you could realize, that's kind of complex, because when you're marketing a medicine, you're marketing it to a really real subset and you're trying to get to them and it's hard to identify that subset and it's hard to identify what's working. So that's what the DIFA platform does.
It helps life sciences companies measure and optimize their marketing campaign to save them 1,000,000 rather than not knowing, hey, is this banner ad campaign working or is my website working or is this article or microsite on WebMD working? How would you know unless you can measure it? Well, this marketing is seen by which people, which people go to then visit a specialist, which of those visits end up being a prescription or not. There's a lot of things to it and that's what they do. It's a very well run business, about $70,000,000 revenue, so growth and profit and margin.
It's the type of business that we like. They really have an A plus customer list. They're the leader in this market. They sort of invented this market. They sell to the brands, the brands and pharmaceutical companies, not to the companies, actually to the brands.
They have about a little over 200 brands that they sell to from some of the best companies from small biotechs to large companies. If you look at why cross X, well, first, what does it bring? First, data science domain expertise. That's something that was not part of the DNA of Veeva, right? It's professional services, it's cloud software, yes.
They're going to bring the data science to Veeva. So very excited about that. They also are experts in patience and privacy and selling into brands. Veeva doesn't sell into brands today, this company does. They have a shared culture and that's critically important to us.
When we do an acquisition, we absolutely won't go forward unless we have a shared culture. Why? Well, our greatest asset is that feeling of 3,000 people that can easily be destroyed if you do if you put an injection of the wrong culture. So every acquisition will be put up against that filter and we wouldn't go forward if it doesn't meet that filter. This is a company that shares our culture.
We've known about them for a long time. My co founder, Matt Wallach actually was original investor, one of the original investors in KrawSec way back in 2,005. So these are known people to us with a common culture and the reception of our customers have been very, very positive because prosthetics working with data science and marketing and brands, Veeva working with technology and sales and operations, there's a really obvious crossover there. There's many, many things we can do together. So very happy about Cross6.
As we look forward, it's pretty simple. Cross Slicks today 200 brands, they have a main flagship product FIFA, which does patient marketing optimization targeting. The growth opportunity is more brands. We could get up to 500 brands or so in the U. S.
And more products, they will put more products in this platform. So the growth is straightforward, more brands, more products, more customers, more products. As far as specific product plans, that's something we're refining. We're going to announce that over the coming year or so. All right.
So exciting times in commercial with our progress there, also with our acquisition of Crossix. It's also really exciting times in the R and D area for Veeva. And that's where we have the development cloud. This is an integrated suite of applications, content applications, data applications, they're all on a common platform, Veeva Vault. We started with this vision in 2012, right, that was 7 years ago.
This thing is deep and broad and hard to build and you need a certain kind of platform to do it. This is not a thing that you it's not like developing a small Internet app for a teenager. This is 100 and 100 and 100 of objects in the data model, multiple applications, how do they fit together, thousands and thousands of hours. The industry has actually never seen anything like before. Nobody has attempted it before.
A set of products does this breadth of things from safety to clinical data management to regulatory systems, quality manufacturing, nobody has attempted it before. And in fact, when Veeva started this in 2012, it was hard to get people to understand. They said, well, what do you mean about that? Because what we have is we have content management system here, Documentum, and we have a bunch of other apps over here and that's what we have. So how do you replace this and how do you replace that?
And we said, well, that's Development Cloud. Don't think of it that way. And now this is becoming accepted in the industry. It's still early days. Some of these products are very early.
Safety has a grand total of 11 customers, right? So it's very, very early, but we're really pleased with the progress. It was a bold vision when we started it. We didn't know if it was going to work. It turns out it really worked.
We have the right product strategy and the pieces are all fitting together, very happy about that. But it's about early days here. It's very early days for Development Cloud. And this is a very mission critical and very sticky, very long term set of applications. So it's all about execution now, product excellence in every product, customer success on every project, continual relentless customer service.
So our path is really clear about Development Cloud. We just have a lot of work ahead of us for the next 10 years. All right. So we've talked about commercial and we talked about R and D. Now let's talk about innovation, some product oriented innovation.
First of all, AI, we've really made great strides in AI over the last year. And the way we think about it is pretty straightforward. We will develop AI applications and we have done so far. Andy, which is our commercial AI application to guide the field force into their next best action. And Safety AI, Safety dot ai, which we just announced, and that is for the automatic assembly of an adverse event, doing some things that humans with medical degrees have to do, okay, read that text, figure out what kind of problem with what kind of medicine that is, that safety AI.
So these are brand new applications that could not have been developed without AI technology. That's what we call AI applications. These are our first two and there will be more from Veeva over the years for sure. And then there is also embedded AI. And that's where AI features and capabilities are embedded in existing applications.
So I'll just mention a couple claims linking that's for our promotional materials management application. I load up a brochure, the AI says, oh, okay, I can find which medical claims you're making and I can link those to the claims you've already made and is this right? If so, press a button. Because when you submit to the FDA, you clearly have to say what claims are you making and what's your supporting material. That was done manually.
But because a large portion of the industry uses our promo maps application and we have the data, we can start to assemble that and we can start to do that for customers. In this case, that our customers are going to get for free and that's how you develop trust, not for free, they pay us an ongoing subscription for promo mats, but there is no upcharge. Approved notes is a similar thing in CRM where for years the industry has not allowed pharmaceutical sales reps to write notes about their doctors. They're worried about compliance related things. Approved notes is the processing of those notes, flagging any compliance things, understanding the sentiment.
So that also will be delivered in CRM. So AI can be very powerful in an industry, particularly because you know the problem you're solving. It's not some general thing, it's very specific. And you have the corpus of data, which is the foundation of AI. Paul and Avril, they'll talk a bit more about these things in their section.
Okay. We have talked about AI, another area of big innovation is industry networks. That's connecting applications together across companies and industries to help an ecosystem operate better. That's pretty transformative. That could not be done obviously without cloud software.
There's no way to accomplish that without cloud software. This will be in our future for sure and we're already getting started in a particular area with the industry network. That's our clinical network. This is our 1st industry network. Here is where we're actually connecting different industries.
Sponsors, those are sponsors of a clinical trial. Those are life sciences companies. Large pharma companies, small biotech companies, they sponsor clinical trials and that's critically important. Research sites execute them and that's a very different industry. These might be the clinical research arm of UPenn of Penn Medicine, of UCSF, of MD Anderson, as well as other small research sites around the world.
There are many thousands of these research sites. AHRQ and then there's contract research organizations, which help the sponsors do what they need to do. The clinical network is the way to connect these different industries and automatically pass data and documents together across the clinical network. So we will sell software to sites, we will sell software to sponsors, we will sell software to CROs and we will provide the clinical network to make it happen. In some ways, you can think of it as a very specialized business process oriented EDI type network.
And we think this will really revolutionize the clinical trial process. That's going to get more therapies to patients that need them. You're going to hear a bit more about this, especially what we're doing with clinical research sites in Averil's area. Last area of innovation we'll touch on today, we just I just picked a few sample ones. Clinical data management, this is a very critical area, relatively new application for Veeva.
This is about collecting the patient data for clinical trials. Person in a clinical trial, they have to be measured for data, what is their blood pressure, their temperature, the size of their tumor, the color of their skin, how are they feeling, etcetera. That has to be measured to see if the medicine is working and oftentimes it's a blind trial. It's measured against the placebo. We started in that area in 2016 because the industry needed an innovation.
They had a couple of existing players in there for 10 plus years really stagnated, really, really not true cloud. So we started with this, electronic data capture, EDC. That's about capturing the data, monitoring that and coding, coding the clinical data. Hey, it's a headache, okay, well, there's 18 different types of headaches. How do you code?
What type of headache are you talking about, right? So you can get it into a form that is analyzable, very important stuff and that's what the industry was doing. But what wasn't happening was that's just part of the data for the clinical trial. That doesn't say about the labs data, the imaging data, the patient reported data, all this other types of data. How are you going to analyze all that?
And where is the central repository for this data after it's all collected? Well, the answer is life sciences companies and services partners have been building that critical application over and over again for each company for 10 years. So when and the life sciences industry was just accepting it. That's how it is. Well, that's how it is.
That's how it's done. You just have to do it that way. We looked at it and said, no, we're going to build this thing, an application that we call data workbench. That's for cleaning and reporting on all the clinical trial data, not just what's captured in the patient forms. And this every life sciences company needs for sure and they all have to build it themselves and it's all not that good.
So the question would be then why? Why is that done? Why hasn't innovation come to that area? Partly it was because the incumbents didn't push themselves, but partly it is, it's a very industry specific problem, but it needs really cutting edge technology. And generally, you don't find that in the same company.
You find that cutting edge technology in the Amazon, the Google, the salesforce.com, the Workday. You don't find that type of technology in the industry specific company, but in Veeva you do. I mean, my I guess I came from PeopleSoft and Salesforce dotcom, so they're by definition. But we're a mix of people that understand the industry and understand technology. So when we looked at solving this problem, we thought, oh, there's actually a core piece of technology missing why you can't build this.
What you need is actually a clinical database, not a relational database. When you try to build that application on top of a clinical on top of a relational database or a file system, you end up in a blind alley. You cannot get it done reasonably. It doesn't work. The complexity comes through.
It's not meant for that. It's not meant for this type of application. So we realized, wow, to solve this problem, we're going to have to create a piece of system software, an actual clinical database with a clinical query language, not a structured query language of relational database, but a different query language. So now I'm going to show I promised I'd show you some code. Here you go.
I'm going to show you some code. This is a query actual from a customer, actual from a customer, a problem that you would ask from a corpus of clinical data in a study, you want to say, hey, are there overdue visits? Are there overdue visits by a patient that's still active in this trial? Because I want to monitor that and I want to see what sites there are and I want to get after those sites. So traditionally that was done with this warehouse of clinical data built on top of a relational database and you did it with SQL in a relational database and SaaS programming.
SaaS is a programming statistical language. This particular one we analyzed from the customer, this was 280 lines of SaaS code and multiple, multiple SQL queries. Now the problem with that is, I'm a retired programmer. If I wrote 280 lines of code, I bet I had at least 14 bugs, right? Some people more, some people less, very unusual to write 280 lines of code not have bugs.
That's a problem in clinical trials. And not only that, it's very expensive to do that and slow. This query can be done in 6 lines of CQL code. You're not going to make an error there and you're going to do it very fast. When I started my current software, I was working on the early mainframe in relational database, early relational database in the mainframe And we would show people, man, you can do select from where, oh my God, that's much faster than reading the file and picking out the bits and bytes and it's great and it was true.
This is that same revolution for clinical data. So you will see that code inherently knows what is the relationship between a patient and a study and a visit and a data item on a form. What is that relationship? And it knows that. And it knows that data elements inside of a clinical database don't just have the data, they have the status of the data.
And that's a critically, critically, critically important thing. So if you don't have those things built into your database, you are writing SQL queries till the cows come home. And you're trying to basically envision you have a board and you've got a nail and you're trying to get the nail into the board. And what you have is a saw. And so you put the saw on its edge and you keep bang, bang, bang and getting it right, trying to get that nail in there.
You've just like, okay, that's what's done. And then somebody comes along and says, well, hey, I got a new thing called a hammer. You just it's heavier, it's bigger, just hit it and it goes in. That's what this is. It's that fundamental.
Now this is early days and this is a core piece of technology. It will be available for the 1st early adopters to start working around with towards the end of this year. This is going to take a few years to be gets this robust. But as you can tell, very excited about this one. This will help clinical trials.
The platform, that's also very innovative area for us, right? That's our core platform that we build things on Vault. It's content and data. It's an enterprise cloud platform like other companies have. It's for rapid application development, has integrated reporting and dashboards.
But it's special in its own way. It's really suited to what we're doing. So content and data, this platform can do video coding and decoding, right? It can take the text out of a video. It can take the text out of an image.
It knows about Adobe InDesign files and it can render a 5,000 page PDF so that that thing views within 2 seconds around the world because it chops it up into a whole bunch of images etcetera. So it's very, very good at content and then it's very good at data as well. That's an unusual mix. That's needed in life sciences because it's a lot of content. Right now Vault manages over 100,000,000 very critical documents and our customers are viewing around 1,000,000 of those critical documents every day.
These are the most critical documents in the industry. That's why content is so important to Vault. It also has very robust workflow. Workflow very configurable with a really good audit trail and that's needed on these critical documents and data. It's also organized around search.
Everything is put into the search engine. That's just how it works. Everything is searchable. Content, data, it doesn't matter. Any single thing you put involved is in the search index.
It's in stored consistency in a relational database for sure, but it's also in a search index. It's validated and that's critically important for life sciences. FDA requires that. And then a very interesting part is, it is a low code environment for our developers and for our customers to customize, but it enables the last mile. And that's critically important when you're doing an industry specific solution because 80% of your value will be in that last mile of complexity that's only 2% of the code.
And you have to enable that. So the Vault platform enables that both our customers and our developers right down at the Java level. It's not a high level language, etcetera, right down at the Java level. So our customers can upload real Java to our servers, not some proprietary Veeva language, whatever, etcetera. They can upload real Java right to our multi tenant servers.
That's a very innovative thing that we have a very significant patent on. That I wasn't when we decided to do that, I wasn't sure if we could actually do that. But we did it, very happy about that. I have proof it's working now. All right.
So as you can tell, I'm pretty excited about life sciences, right? And Veeva overall and the things we're building and the employees and the team, it's really a lot of fun. Let's turn to outside of life sciences. So the basics, this is our product. These are our product offering outside of life sciences.
It's the quality area, quality 1. So document control, QMS training. Regulatory, that's as you would expect registrations of products and all the things that go into that with all the governments around the world. And then our newer product claims, managing a claim, My cosmetic does this, my chemical kills these types of insects, etcetera. This product is 98% organic.
That's a claim in the true sense of word. We serve the chemicals, consumer goods and cosmetics industries. Claims are actually really important here, because especially in consumer packaged goods, if you make a claim it's and if it's not correct, not substantiated, your competitor can stop your advertising. Then you have to re level your product. It starts a whole cycle.
It's really, really important that you have proper control of your claims. So these are the industries we're going after and the products we're going after them with our progress. So we're still in the early adopter phase. We're targeting large enterprises really. And we're making progress with these customers and I feel good about it because we're getting more larger customers.
So we now have 4, 7 figure customers. Last year at this time we had 1. We have 40 customers who are concentrating on the U. S. And Europe And we're really learning from our customers.
So for example, our claims product that was developed sort of hand in hand with one of our early customers. We've already had quite a few customers express interested in it, start progress on it. We're becoming a strategic partner to these companies. And that's what Veeva is all about. That's the Veeva way.
So I'm very pleased with our progress. I'll give you just a couple of case studies to give you an idea. So this case study about a top 5 CPG company. We've been working with this company for maybe 3 years or so. They were one of our earliest customers outside of life sciences.
They started actually in a very small area, a relatively small area, they were working with the Vault platform and then they started working with our QualityOne application, now they're rolling out a regulatory application, They started working with on claims very early and now they're starting to roll that out. So we've replaced multiple, multiple, multiple legacy systems, particularly in the Quality 1. They had a multiple of systems at each manufacturing plant. So we're probably, well, I don't know, we might be halfway through the different plants replacing the systems, regulatory is not as far along. So they've really embraced us as a partner and we're growing with them and they're growing with us.
Chemical company, top 30 chemical company. This is specifically around the regulatory area, actually into just one of their divisions. This is a large company and this is in one of their particular divisions has to do with agrochemicals. Here we've replaced 7 custom systems in the regulatory area. We're managing over a 1000000 documents that are pretty sensitive documents.
And we've had a partnership with this customer. For instance, in this particular industry, when we got into it, we realized, wow, when they submit this to the regulatory authority, they need a very specific format of PDF that we don't see in the life sciences. It's called a PDFA. It's a PDF archive format that will continue to be readable for 100 of years. They really need that, okay?
We had to change our software. That's what we do. We go to the last mile and we solve these things for the customer. Now that's a small example, right? There are many, many, many of these things you have to do.
So there we're becoming known as a strategic partner because this application is live now, 1400 users, 45 countries. And we were recently invited back to a strategic supplier meeting where and they only think of SAP and Veeva in those ways of a strategic software supplier. So we're very early days, but they see the potential. What do they see? They see a company that's able to be customer focused and execute in their industry and they see the Vault platform.
And so they see good potential there and they're eager to partner. So if I look ahead in life sciences, it's really enterprise focused, that's our DNA. And a lot of in these industries where we're targeting, that's where the bulk of things are. That's where the bulk of the companies that need these systems are in the enterprise. We got to expand our reference customer base and improve our products all the time, focus on that product excellence.
So excited about life sciences and that's what's ahead. So I'll stop the same way as I started with our key highlights. We're becoming a very strategic partner to this really, really important industry that is growing. Software industry has not seen something like Veeva before. We have our Veeva Way, which is a very sustainable business model that's understood by 3,000 people and growing.
And we have a track record of picking the right markets, really going after them and establishing leadership position. And I hope I've given you some insight into something that we rarely talk about, which is our actual software DNA infrastructure, how we innovate in software, it's not the norm. All right. Thank you very much. And with that, let me call up Tim Cabral to give you an update on our financials.
There you are, Tim. I thought we lost
Thank you, Peter. Good afternoon and thanks for all of you joining us today. Over the next few minutes, I'll talk mostly about the $3,000,000,000 revenue run rate target that Peter disclosed, our history of strong execution and the opportunities we have in front of us to meet that goal by 2025. So as you've seen this year, Veeva continues to execute very well. Since our early days, as Peter discussed, we have delivered a unique and powerful operating model of strong growth and profitability, this being our 10th year.
With the $1,000,000,000 revenue run rate target met, the team is looking towards the next chapter of growth and the goal of $3,000,000,000 in revenue run rate by calendar 2025. In looking at that target for Veeva, it's important to understand that we're in the very early stage of a number of interesting large market opportunities within life sciences, and as Peter just talked about, outside of life sciences. And lastly, our strong innovation engine, which Paul and Avril talk a little bit about, has allowed us to nearly double our TAM, our total addressable market, since we went public, sending us up for long term sustainable growth. This graph shows the results of a large opportunity, a strong product fit, focus on customer success and disciplined execution. These factors have enabled us to deliver the 10th year of strong revenue growth and profitability.
Our last our latest guidance for fiscal 2020 includes roughly 25% top line growth or total revenue growth and nearly 38% in operating margin. Drilling into our operating model, we see strong leverage in the business as gross margin has improved by 400 basis points over the last 2 years as Vault has grown rapidly and become a much larger part of our revenue. We continue to see efficiency of primarily serving 1 industry, coupled with our disciplined go to market approach and our sales and marketing spend. And lastly, the effectiveness of the Vault platform allows for material innovation and new product introductions, while still only spending in the mid teens as a percent of revenue for R and D. As some of you may remember, at our Analyst Day in 2015, we set out to achieve an aggressive set of goals, namely getting to a $1,000,000,000 revenue run rate by calendar 2020.
With the steady growth of commercial cloud and the strength of the Vault business, we've achieved this goal 6 quarters early as Peter mentioned. Looking forward, we now see a path to be a multi $1,000,000,000 company, namely getting to $3,000,000,000 in revenue run rate by 2025 and line of sight to grow from there. This represents roughly 19% in compound annual growth rate on total revenue from here. Vault will be the biggest growth driver nearly quadrupling, while commercial cloud will continue as a steady grower and should roughly double by 2025. As we think about getting to this goal and room to grow, we'll continue to look for investments that will drive customer success and future revenue growth.
Our focus in the future is the same as today, which is building a business with a strong combination of growth and profitability. When we look at our path to $3,000,000,000 it really starts with the overall and growing market opportunity we have in front of us. The size of our commercial cloud and Vault within life sciences TAM is healthy at $8,000,000,000 with Vault growing more than 2 times we became a public company. For the outside life sciences opportunity, we've become more focused on the 3 end markets Peter just shared, but we've expanded our product offering across QualityOne, RegulatoryOne and claims as we build deeper relationships. This focused opportunity still represents north of $1,000,000,000 in TAM for Veeva.
And with the announcement of our acquisition of Crossix, this adds another $1,000,000 in market opportunity in patient data and analytics and our TAM now is north of $10,000,000,000 dollars The product portfolio we've built over time and the growing areas we can deliver customer success and value drives market opportunity we discussed on the last slide. What's more, this slide continues to show that the larger portion of our portfolio is from products that are still in the very early innings, giving us confidence in the path to the $3,000,000,000 in revenue by calendar 2025. While innovation is a very important part of the model, our go to market approach has also been part of our success. As we've seen with CRM and Promo Mats and eTMF and some other products, we have a blueprint, which is predicated on customer success. Our focus on building a great initial product, working closely with our early adopters, learning from their experience and success and then moving into the wider market with strong referenceable customers and an even deeper product fit has been a hallmark of our journey to date.
When we look at the key revenue growth drivers, we see that the go to market model is working effectively. While Vault customer counts have nearly doubled in the last 2 years across these key business areas, allowing Veeva to continue to work with some of the most amazing enterprise and emerging companies in life sciences, customer count increase is really only a small part of the growth story. Our focus on customer success and product excellence helps new customer adoption, but more importantly, it drives existing customers to adopt more Vaults within both the business process they are in or entering new areas of the business as they march towards using Vault across the drug development cycle and the commercial areas. Over the course of the last 5 years, we've seen customer count grow by 10 times, but the number of Vaults being used in the industry grow by more than 15 times. The other key growth driver for our Vault business is the growing value of a single Vault within each customer as they expand their use of any individual products across new regions, drug product areas or new teams.
The culmination of both the cross selling of new vaults and the increased use of existing vaults is displayed in this cohort analysis, where we can see the annualized subscription revenue growth clearly outpacing the increase in the average number of vaults. Both of these strong metrics show our focus on customer success is really paying off. These same drivers are seen in the commercial cloud business as well. As we've helped the industry move from face to face interactions to multichannel interactions, the metric below denotes strong adoption of our CRM product, our CLM product and approved email. And with a strong early interest in the rest of the commercial cloud portfolio and the exciting addition of the Cross6 offerings, we're confident in the commercial cloud business achieving $1,000,000,000 in revenue run rate by 2025, as you saw in my earlier slide.
Let me close where I started as well. The business continues to deliver a strong combination of growth and profitability, the basis with which Peter built the company and is set up well to deliver on the new long term revenue and margin goals we discussed today. As you'll hear from Paul and Avril, we have a significant runway for growth with the product portfolio we have today and the innovation engine that we have built. With that, let me turn it back to Rick.
All right.
Thanks, Tim. We're going to take a quick break. We'll call it excuse me, let's call it 10 minutes, so we can stay on track. So we've got light snacks and drinks in the hallway here. And if you would, just please be back in your seats, let's call it 225.
Thanks.
All right. Good afternoon. Welcome back. Thanks for joining us today. My name is Paul Shawwa and I'm responsible for commercial cloud strategy at Veeva.
Here we go. All right. So I'm going to get to talk to you a little bit today about commercial cloud. I'm going to update on a couple of things. One is our products and how they fit together.
All of the products that we have in commercial, we call all of those commercial cloud.
And I'll
talk about how those are solving some of the biggest challenges that the industry is facing today. I'll spend some time giving you a little bit of an update on the business. We'll break commercial debt cloud down into a couple of smaller pieces to give you a sense of what's driving the business, where the growth is coming from, what the future looks like. But I'll spend the majority of the time on of the things that Peter talked about, which is driving innovation and customer success, because that's really the engine for maintaining our leadership but also growing our share as we think about expanding and growing into our number for 2025. I want to get started by talking a little bit about what's happening in the industry.
And Peter shared this idea that the life sciences industry is shifting to more precision medicines from small molecule to large molecule biotech ultimately to more precision medicine. And that shift is actually happening. I use the word specialized medicine, it's a little bit more of a generic term. Precision is more precise, getting down to a very individual patient level based upon their genetic makeup. Specialized medicine is a little bit broader for kind of broader patient populations, but 9,500 drugs are in the life sciences pipeline today, more or less.
So it's a very robust industry with a very significant pipeline. This includes everything from Phase 1 all the way through to Phase 3. So a very wide pipeline of drugs, we all know that not all of those drugs end up getting approved, but it's a vibrant industry that number has been growing pretty consistently year over year. So that number continues to get larger. What's interesting is that about 3 quarters of the drugs in the pipeline are believed to be novel or 1st in class.
1st in class means there are unique way of treating a specific disease different than any of the drugs on the market today. And what that typically means is they are more targeted, they are more specialized in terms of how they treat a disease and oftentimes a step change in the value that they have in terms of treating patients. And last year as an example, the shift is a metric to think about where we are in this shift to precision medicine. We're obviously in the very, very early days, but last year alone, there were 59 drugs approved by the U. S.
FDA and about 42% were considered precision medicines. So exactly meaning that 42% of those drugs had a biomarker where there was a test that you would do to see what kind of treatment you would have for that patient. So we're seeing this shift happening in the industry, as Peter talked about, is going to take many, many years. The reality is this shift is impacting how life sciences companies take their drugs to market because taking a small molecule medication that may treat 100,000,000 patients and is priced at a couple of $1,000 a month or year is wildly different than taking a gene therapy that may treat tens of thousands of patients that may be priced at $500,000 The way you take those drugs to market is very, very different. So it's impacting everything from the stakeholders, the people that life sciences companies talk to and engage with, where it used to be more disease focused and now it's shifting.
It used to be really all about the prescriber, the doctor that you went to see. And then it was about the doctor and the payer and all of the stakeholders, the thought leaders, the people that would give advice on that, the best way to treat a disease and it's shifting now to be more about the patient. We're also seeing the impact on how drugs are reimbursed as well. Treatments are being reimbursed. Traditional model being reimbursement based on fee for service.
So you do a service, you prescribe the drug, you get reimbursed for that. And over time, that shifted to paying for value. Life sciences companies spent a lot of energy on justifying the value that their drug creates to the overall health care system. Will a drug replace costs in the broader health care system and that's called health economics. And over time, we're going to see that shift to being paying really for outcomes.
Did the drug deliver the benefit that you expected? Now value in health economics doesn't go away, but we'll also see more of a focus on real outcomes. And then in terms of go to market, the primary focus has been on the stakeholder and understanding where they are in the journey of understanding the disease and the drug that a company may offer and trialing and getting used to that drug and then thinking about the ways to reach that customer via will be more infused with information about the patient. So a medical center may be treating a population of patients who all have varying and different unique needs and the life sciences company needs to know what does that patient population look like, what stage are they in a treatment, so they know what services they need to bring to that medical center. So we'll start to see that shift.
They need to bring to that medical center. So we'll start to see that shift. What's interesting is it's not a it went from A to B to C. It's actually additive because when you look at the portfolio of a large life sciences company, they have products that span small molecule, that span oncology treatments, rare diseases, digital medicines, gene therapies. So all of those may exist under the same a single roof of a life sciences company.
So it's the complexity that they have within the company itself means that they need to be able to be flexible and operate in multiple different ways based upon the product that they're selling into the market. And from an impact standpoint, it means that companies need to think differently about their go to market. They need more data, more visibility. Now there's happens to be a whole lot more data today in the life sciences industry than there was access to 10 years ago with things like we saw with cross sex where they have access to 300,000,000 lives in the U. S.
Market, for example, and 100 and 100 of terabytes of data, that data is now becoming more available and accessible to life sciences companies. That's just one example. And how do you use that data as part of the commercial process becomes a really significant component. So there's this kind of expanded need for data visibility and being able to have data that you can use in a consumable way, right. Data just volumes of data is useless unless you can actually do something with it and make sense of it.
Greater speed and agility, so this data changes, patient lives change, treatments change literally daily. So life sciences company need to be able to shift their resources. They need to be able to detect what's happening in the marketplace and take some action on that really quickly. So speed and agility becomes more critical as we're seeing this greater shift to specialized medicines. And then those two things have generally been at odds with this idea of compliance.
So compliance has often been the enemy to speed and it's been the enemy to visibility and transparency in the industry for a long, long time. And we're going to turn we're flipping that concept on its head. I'll give you some specific examples about how we're going to use technology to enable compliance just as part of the process, kind of you get it for free when you do things differently in a different way with technology, you get it for free. So I'll try to make that concept tangible for you. The way that we help the industry address some of those needs that I just talked about, greater access to data, speed and agility, greater compliance is with commercial cloud.
So this is what you saw Peter shared this picture with you. I think of it as 3 big blocks, intelligent engagement. That layer and you saw some of the products there, actually put those up, intelligent engagement is about connecting all of the people and all of the ways that you would reach your stakeholders, your customers, your field sales teams, your account managers, your field medical teams,
all of the people
that touch all of the different stakeholders of a company and giving them all the information they need so that they can do the best and the right thing for that individual customer. That's what we think about when we talk about intelligent engagement and that's fed and needs to be fed by data. And that's what we have on the bottom is one of those foundational pieces, but it also needs to be fed by content because as the treatments for patients become more specialized and become more targeted And as the diversity of the types of patients that you're treating becomes much broader because now remember it's a treatment for an individual not for a broad population, your need for data grows, your need for content grows and the need for that content to be more specific grows. So we have to help the industry with the velocity of that content, getting that content out much more efficiently and faster and more targeted and more precise to the individual needs. So this is how all the pieces fit together.
We call all this commercial cloud and the secret sauce, one of the secret sauce items at commercial cloud is that all of the products in commercial cloud work together. So a specific example, CRM is for the field team to engage customers and to communicate with customers to show them digital content, to send them email communications, to talk over remote meetings, for example, they need content for all of that. PromoMats is the engine that sources all of that content. We've connected those channels up together. We've connected PromoMats up directly with CRM, so they can do that with speed and they can do that with compliance.
Now most of the industry has much of the industry has both of those. So that's a huge advantage. If you don't have one of those pieces, it actually becomes a disadvantage because you don't have the ability to be as fast as nimble and in many cases as compliant. So we think of that as integrated and best of breed. Each of the individual applications is the very best at what it does.
And then it also works well connected with everything else. So what I want to do now is break commercial cloud down and I'll break it down into 3 big groupings, CRM and the add ons, then we'll talk about PromoMats. Remember, when we talk about Commercial Cloud, me as kind of the business owner, I think about PromoMats as part of the commercial side. And I'll talk about some of the new products. And I want to focus in on some of the innovation and customer success in each of those areas.
I'll start with Veeva CRM and the add ons. We'll do that grouping together. And a quick update on what's driving the business in CRM. So first really is our large enterprise customers continuing their global expansions. Many have gotten there, there are still many that have not.
And as they expand into oftentimes emerging markets, China, Latin America, still seeing significant growth. Sometimes they've operated on some of the old legacy systems that they may have made decisions many years ago to go with a localized vendor or localized system. They're now getting to the point where they're realizing they have to operate more globally and that transition is happening to Veeva. So we're seeing strength in emerging markets. We're also seeing small and medium sized companies, this idea of going all in on commercial cloud where 5 years ago they may have started with just CRM or just with promo maps.
And now what they're doing is they're buying multiple applications all at once. And what's driving that oftentimes is the launch of a drug, particularly if it's a pre commercial company, they need to have you need to have a lot of the infrastructure in place to launch your drug and they take what's called a cloud first strategy. We'll hear a little bit more about that later. But cloud first, Veeva first, it just makes it really easy and they're putting the right pieces in place to have a really successful launch. And I'll share a specific example with you.
But this is the most important event for a pre commercial company is the launch of their first product. It needs to work and it needs to work flawlessly. And this is why the vast majority over the last couple of years, the vast majority of product launches have been launched using Veeva. And then the 3rd area is this is momentum we're seeing with some of the add ons. So you've seen some of the names on the previous slide.
These are products like Align, in Events, Proved Email, Engage Meeting, we're seeing continued strength with the add ons. One trend that I think we are in the early stages of seeing, which I think is going to help us as we think about our growth hitting our targets in 2025 is the strength of the add ons and the shift from regional decisions to global decisions for the add ons. So if you think about what those add ons are replacing, they're replacing multiple different systems in multiple different markets. And many companies often make a decision in a region or a single country and they'll switch over to Veeva for that particular add on. And then they have success and it grows out to other countries, to other regions and then it eventually becomes global.
And we're seeing that with our large enterprise customers. In some cases, we're starting to see signs that those decisions are being made at a global level. Now the deployment may still happen over time, but the decisions are happening in a more centralized way because they're recognizing it's just more efficient, it's better for the company to move faster through that. So I think that's a trend we'll see over the next, I would say, play out over the next 3 to 5 years and we'll certainly have an impact on how we think about hitting our targets for the future. So I wanted to give you one, Peter talked a little bit about innovation, a common theme for Veeva really across all of our products, commercial and R and D and outside of life sciences.
This is part of the DNA. It's how we think Peter drives that, has driven that culture within the product organization. And this is one specific example. Context. Enterprise software, CRM systems in particular are fundamentally part of their job is to enable the sharing of information.
That just kind of makes sense. If you have a CRM system, you have multiple people talking to a customer, you want to share information. Within life sciences, there's regulations that say if you write the wrong thing in the CRM system, if you say something that's a claim that you shouldn't make like XYZ product cures cancer, that's not compliant and you can get into a lot of you can have compliance or regulatory risks or fines from doing that. So what life sciences has done in some cases is they've forced their users to just have structured fields like drop pick from a pick list what answer you want to have or stop writing notes entirely. And that's not a great solution for the industry really because it slows the sharing of information down.
So what we're doing is using AI, we're calling embedding AI directly in the CRM to solve exactly that problem. We think we are using AI at the point of entry. So in this example right here, you actually see notes that were written by the sales rep in the field. And there's a word that's highlighted, the word complaint. And the AI engine is smart enough to pick that up and say, oh, that's not really the best word you should be using in a note.
We're actually going to make a specific suggestion to you. So it picks it up and it says, hey, when you see you wrote complaint, but did you really mean to say this, here's a suggestion on an alternative that you may want to think about. So in real time, it's addressing that specific text that user wrote. It also not only does it in real time, it also sends this data back up to home office. So if there is something that gets through, you can start to report and put proactive measures in place to stay compliant.
This is actually more compliant than or will be more compliant than forcing users to not write notes at all in the CRM system, because what happens is instead of not writing notes in CRM, they write notes somewhere else. And that's just as much of a compliance risk, not a compliance risk for CRM, it's a compliance risk for somebody else, but it's still a risk. So now if you're able to put it all into one place, allow the sharing of that information and track and measure and make sure that they stay within compliance, you get the benefits of both sides. So this is innovation that it's just part of the subscription, it's part of what our customers get when they buy in Aviva. I want to share 2 more examples.
In CRM specifically, this is part of CRM, we call this dynamic attributes. I want to I need to set a little bit of the context first of this to understand what we're doing here. It looks like a screenshot of a healthcare account. In this case, it's a specific individual. Traditional enterprise software cloud, enterprise software gets updated.
The customers will roll out new releases or functionality, typically monthly, sometimes quarterly, It's often between those cycles. Now the speed of the business doesn't operate on monthly or quarterly query all of my customers and find out how I want to query all of my customers and find out how many patient lives are represented in every oncology center that we call on. I want to have the field go get that information today. I want to tell them what that is and I want to have all of that populated today. Well, when it takes a month or 3 months to get that into the system, that's just too long.
And oftentimes, you run into data governance issues and challenges like that. And a lot of times, you don't want to fully clutter up this enterprise software system with just random thoughts by the business. So what they do is they go out and they use Google Docs or they use Excel spreadsheets and they create an account silo, they create some attributes and they go distribute it and they get everybody to populate it. And now they've created a silo and by the time you know when you do that 5 or 10 or 15 or 50 times, you have all these silos and none of that data is connected. We're solving this problem.
We're putting we're empowering the business user to literally create account attributes today. Right now, They have the ability to create specific attributes that they want to new data elements that they want to learn about that account directly in Veeva CRM and roll that out to the field immediately. So the field can start populating that information and having visibility and access to that information without relying and waiting for those long, long cycles. And we're keeping that data, we're storing it and we're going to make it accessible so you can report on it. So we're going to replace all of these disparate Excel spreadsheets and Google Docs and help our customers move at the speed that they need to move at.
This is a breakthrough. It feels like something that it's something that the business has pushed for and now they'll have access to with dynamic attributes. So this is a really significant deal, especially in markets like oncology where literally minutes and hours and days matter to patients. And if there's information that they need to get, they need to get that information right away. And then we're giving them the ability what we're calling My Insights Designer.
So now that they can capture this new set of information, we're giving them the ability to create visualizations of that data. So the same business user who said I want to get new insights about my customer will now have the ability if they know how to use Excel, we're designing it to be so simple that if you can use Excel, you can create a new visualization for your team. So now the CRM system becomes even more valuable because it's not only a mechanism to put information in, it's a mechanism to get information out in a very easy to consume way. So these are just three examples of some innovation. There are many others that we're doing in CRM.
Last year, we talked about a number of different ones like Sunrise UI and the user interface. This innovation never stops. This is part of DNA. It's part of how we continue to drive success with our customers and adoption. I want to pivot over to PromoMats and share some of the same kinds of innovation that we're doing there.
First, a quick update on how the promo mats business is going and what are some of the drivers are there. First is, last year we talked about and for the last couple of years, we've been talking about concepts like digital asset management being embedded into the content management system. So as you know, Promo Mass is for the creation and approval of digital content for a life sciences company in the digital asset management system we built in that's highly unique. Our customers are using digital asset management. They're also using this concept of the brand portal.
We talked about that one last year. Brand portal provides individual marketing teams a way to organize all of their content globally for a particular brand. So users can access, can search and find content very, very easily. These are going viral within companies. 1 top 10 enterprise customer, they wanted to try the brand portal and they tried it for one particular brand and it worked for that brand and other brands saw it just from hallway conversations.
They said, hey, look at what we're doing over here and they showed them the brand portal and before you knew it, it was available to pretty much all of the brands in the company, over 20 brands at the company had adopted the brand portal and started sharing. It's that powerful, it makes finding and accessing information much, much easier. And this is about content efficiency. It's about finding, reusing, getting that content to market at much lower cost, much more efficiently. Remember, because now in this digital world where you have to treat, you have to provide more specialized content, more tailored, you have to be faster at getting content through the system.
Our customers are also thinking about using promo maps as the foundation for all of the digital content and digital assets that they manage and using it as a way to get that content to market faster. Last year, we also talked about Vault Digital Publishing. So not only the approval of content in the publishing to Veeva channels, but the publishing to non Veeva channels like websites, HCP professional sites, doctor websites that doctors may go to, brand.com sites. So the content we now that gets approved in Vault exists in one place in Vault, gets published out to all of these websites. And if they want to make a change to that content, they go to Vault and they change that content once.
If they want to withdraw that content, they withdraw it from Vault once and it gets pulled down from all of the websites that that content is used in. This is a breakthrough as well. And it speeds the time to market and it dramatically improves compliance. So one of our customers thinks about this as real time compliance. So this is relatively new involved and we have a number of customers starting to use it.
And they're using words like game changer, real time compliance, saving them a lot of time from having to track down where all of that content exists. And if they want to change something, which happens often, the hassle of changing at multiple different times in multiple different places. And then with Vault, we're also seeing expanding leadership a lot of because of what we've just talked about, but companies who haven't fully gone global with Vault yet are expanding and standardizing their content processes and standardizing on Vault Permats across all of their marketplace. So that's been driving a lot of the if you've been following content has been particularly strong over the last couple of quarters, a lot driven really by the innovation that's happened over the past couple of years and that will continue to happen. I'll give you one specific example on the Vault side.
This one Peter also referenced. I'll take it one level down so you get a picture of what it actually looks like. We're embedding AI again into Vault Promo Maths. So last time I talked about embedding AI in a CRM, we're embedding into the Promo Maths. We'll do it through other applications as well.
This is a screenshot of a piece of content that would be used by a sales rep in the field to sell to a doctor. In this case, it's before that content is approved for use in the field. It's in the approval process. And what they need to do is go through this process of claims linking, taking that claim, the claim that Peter talked about some claims in the consumer goods space. This is a claim in the life sciences space, which is similar.
So the claim that it has highlighted here, it says, Colacap proven to reduce cholesterol levels in teenagers and young adults. So that's a claim. It's proven to reduce cholesterol levels. That claim needs to be linked to the source, the reference material that that came from. It may be a clinical paper or some clinical study.
Now there the challenge is that there are 100 and 100 or 1000 of claims and 100 and 100 and 1000 of reference documents that need to be linked together. So the challenge for a life sciences company today is 1, how do you find all of those claims and a massive Web site or a significant sales aid, there may be 5 or 10 or 50 or 100 different claims that you make. You have to find all of us first. So they pay an advertising agency, a human being to read through the whole document and find where those claims are. They have to find them.
Well, you can imagine there's human error in that. They may read something and they may think it's not a claim or they may miss it. So you have to find all of them. And then once you find them, you have to find the right reference document and link those two things together. You can imagine that takes 100 and 100 of hours across a large global enterprise pharma company, it takes 1,000 and 1,000 of hours to do all of that work and it's error prone.
What we're doing is we're using AI to help with that process. So first step is identify the claims. You may not be able to see it on the chart here, but there's something called suggested links in the upper left hand corner. You hit a button and what it will do is it will highlight automatically as it has done on the screen everything that it thinks is a claim for you. And it will allow you to say yes, it's a claim or no, it's not.
So it will find it for you and then it will suggest exactly which reference to link it to, happens automatically. Again, this will save companies tens of thousands of hours in time in terms of finding these claims and links and also helping them be more compliant. So just some examples of innovation that have a real impact on how our customers, the processes that they do and their ability to be compliant. I'll transition to the last big area. So we talked about CRM and the add ons a little bit about promo mats.
I want to give you an update on some of the newer products which we've announced starting with Nitro. So Nitro, we are seeing great success with early adopters. So some of the early customers that have moved to Nitro are doing quite well and that value is kind of growing over time with them. And we're also focused on building the product out, continuing to innovate in the product, expanding the number of connectors that we have, expanding the number of data assets that it connects to and really kind of going deep in product excellence. As I think about 2025 with Nitro and Andi, these will be critical drivers.
Peter mentioned the anti competitive behavior that's impacting Nitro, that's real. It's impacting Nitro, it's impacting Andi. But we're in this for the long term. So we will continue to innovate. We're going to continue to push through.
And what we're finding with customers is that it's super valuable. When they do this, it's the right solution for the industry. It's working. So companies want to integrate the content metrics that come out of Vault promo maps because they don't have access to that today. That's really hard for them to get today.
And with Nitro, we make that easier. So this Vault integration, that innovation is real and customers value that. The value that we talked about of keeping Nitro always current with the CRM system, that's playing out over time. It takes time to actually prove that out. And from our early customers who have now been deployed for many of them for months, they're seeing as they change their CRM system, Nitro automatically stays up to date.
Remember that was one of the big challenges of the data warehouse was keeping that data warehouse. It's easy to build it for day 1. It's hard to keep it current over time. And that is working as well. And then customers are also getting value out of AI.
So in terms of our early adopters, one of our Nitro early adopters is also an Andi early adopter and is going to use the data in Nitro to drive what they're doing with Andi. Others are using their own AI and data science internally on top of Nitro. And that's great. We build our products to be open. We want Nitro to be open to be able to use any sort of data science and or AI customer chooses.
That's what it's about is being open and we're enabling that. So that shift is really happening. In both cases, these are small companies. One is a small company who is using claims data to identify patients. So they're solving really complex problems, combining multiple different data sets together to find very specific patient sets.
So Nitro despite some of the challenges that are happening in the market is continuing to progress well. ANDI is a little bit earlier stage. We are focused on our first couple of early adopter projects, many of which a couple of which are happening, one is happening today, the next is happening within the month of October. So early projects are just getting kicked off. What's interesting here is the kinds of use cases that our customers are imagining for use with Andi.
This idea of surface and reimbursement issues, when you have a drug, a more specialized medicine, remember these are smaller companies with drugs that may be 100 of 1,000 of dollars in cost. When you have a patient that can't get access to that drug for another week or 2 weeks because they run into issues with their payer. 1, it impacts the patient and the quality of life of the patient, 1st and foremost. 2, it's a significant impact on their revenue because now it's a 2 week delay or a 3 week delay in a drug that costs 100 of 1,000 of dollars. So surfacing those reimbursement issues using AI and combining multiple different data sets becomes a really interesting problem for those companies to solve.
That's one of the first use cases one of our customers is trying with Andy. Targeting with claims data, So if you can find out, if you can use claims data about patients to find out who are the patient populations that you need to target, you can match those patient populations to the prescribers, the doctors or the accounts that those patients are linked to. And then you can know, you can better understand where to find those patients, where to allocate your precious sales and marketing resources. So they're using data that match multiple different datasets to do better targeting. And then they're using Andi for things like channel preferences, understanding how based on previous behaviors, how individuals want to consume information.
Do they best want to see a human being in person? Do they best want to interact via an email or a phone call or some other mechanism? So these are we're despite again some of the blocking that's happening in the marketplace, we're being innovative and our customers are being innovative about how they use Andi to solve real problems. So that's an update on some of the newer products. Want to transition over to a couple of real examples from 2 different customers.
I'm going to do one very large one, a global top 20 life sciences company and I'll do one very small one, a pretty commercial company and show you how they look a little bit different. The first one is the global top twenty life sciences company. This company operates in over 80 countries. They're very complex. They have 5 primary therapeutic areas like cardiovascular and oncology and a handful of others.
And they have across those therapeutic areas, they have more than 20 products. They've been around for a long, long time. They've been a Veeva customer since 2013. So as they think about their what they have accomplished with EVA over the last couple of years, it's been about changing how they go to market, transforming what their customer engagement process looks like. And they started in 2013 with CRM and CLM and they made a global decision.
They said we're going to move to Veeva CRM globally and we're going to do it for all of our countries and that's what they did. They spent the next couple of years doing that and harmonizing a lot of their processes. So they got all of the benefits of being on a single standard system across the globe. And they replaced a lot of legacy technology in doing that. So their first step was that all of that harmonization and getting that great foundation in place.
And once they did that, they thought of their business as now we need to interact differently with our customers. So they started adopting things like approved email. And they start with again with the add ons, they typically start in a market, a country. In this case, it happened to be the U. S.
Market for approved email and they tested it and it worked and they expanded it. And by now approved email is deployed globally at this company. And they needed to connect promo mats and headcoms to email into all of their other digital channels because again it's that really it's that digital foundation for them. The more content they need, the more efficient they need to be at doing content. So this stage in their cycle was about moving to digital and doing digital more efficiently.
So now they had a great foundation in CRM. They had a digital foundation. They wanted to use a lot of the data that they were generating to become smarter about what interactions they were doing with their customers. So they started projects with suggestions. And they actually started it before we did Andy, which was okay, but they used Veeva CRM suggestions as a way to surface the output of their data science.
And they started that in the U. S. Market and now they're in multiple different countries with suggestions. And then as they similar to many other life sciences companies are thinking about, they're always evolving their customer engagement model. And as healthcare institutions become more centralized, as they become more individual prescribers and targets become parts of broader hospitals and hospital systems and IDNs, they're rethinking how they engage their customers differently.
So they're going through this key account management process. And that's really driven the fact that their data wasn't good enough, their customer reference data wasn't good enough in terms of the quality of the data but also the relationships of which prescribers are part of which hospitals, which departments are parts of which hospitals and hospital systems, which is when they moved to open data in the US market and now since then a couple of other countries and looking at it to expand globally. But then also for Align, Align having the ability now that you know what your customer hierarchy looks like, who are the resources in your company that should be focused on those right targets. And that's what Align does. So hopefully this gives you a sense of a single very complex large life sciences organization, the kinds of transformation that they will go through, the stages that they'll go through and how the Veeva products support them.
Let's take a similar look. We'll do it for another example. We'll look at a small company. In this case, it's an oncology company. This company was pre commercial.
So they've been a customer of Veeva since 2015. Now they started on the R and D side of Veeva. They started with quality docs. They had great success there. They moved to regulatory.
They were an early adopter of our training product on the R and D side and they've been doing that since 2015 before they had any products on the commercial side. They just launched their first product in the middle part of 2019. It's an oncology product for multiple myeloma. Now in oncology what's often very common is you'll hear it's not oncology specific, but it happens more in oncology, this idea of being first line, second line, third line, even fourth line treatment for a disease because cancers are very complex and you may try something first. And if it doesn't work, you have to try the next thing and the third thing.
So there they have a multiple myeloma indication and it happens to be 4th line treatment in this case. So that means you've tried multiple things and that hasn't worked and they need to now they're on to their 4th option. So they just launched that in the U. S. Market.
They're hoping to expand their product globally. Let's take a look at what their journey look like for them. And notice here, I said there were customers since 2015. I'm focused just on the commercial side, because they knew us as a company from R and D. That's where they started with us.
And they had a great experience and they saw the vision of just kind of making things work and having a great launch and using Veeva broadly across R and D and commercial. So their first commercial products with us started in mid-twenty 18 with PromoMats and Medcoms. Sometimes it starts with CRM, sometimes customers start with CRM, other times they start with promo mats and medcoms. Those are the 2 most common entry points in AVEVA. Other times it's data.
They happen to start there because they were gearing up for the launch. And in advance of the launch, they needed to create all of their promotional content, they needed to create all of their scientific content and start the process of getting it approved because once they get the approval, they want to go quickly. They need to move with speed and move fast. So they started there and then they deployed Veeva CRM to their field medical teams, their medical science liaison teams. That's very common in a launch scenario.
Before you even launch the drug, you would take a set of medical specialists that would call on customers and educate them about the disease state and build awareness, not about the drug itself, but about the overall disease. So then they did that. And then they said, hey, they were one of our early adopters of Nitro. They wanted to have 2 things. 1 is reporting in place for when they did their launch and they wanted to get data feeds literally daily.
So NYCHA was a big part of supporting that launch process. But even more important than that was this idea that because they were 4th line therapy, they wanted to bring data sets together to find patients that have gone through 1st and second and third line, so that they can figure out where are the patients who are about to in need of a 4th line therapy. So they saw Nitro as the opportunity to bring multiple different data sets to enable that specific use case. They put Nitro in place and they put they're using suggestions as well with their own data science to match all of that data and generate those suggestions for the field team. And then they geared up for the launch with CRM and Align and Open Data and approved email pretty much all at the same time in the beginning part of 2019.
And then they had a very successful launch in July of this year. So it's a very different journey you saw for a pre commercial company who kind of went all in in a very compressed timeframe, all to drive a launch versus a global top 20 pharma company who over many years adopted many of those Veeva products in many cases starting in a specific region and then expanding globally. The common thread I would say across both of these companies and really across what we're doing in commercial, none of this happens if without the focus on customer success. This is a common theme. You heard Peter talk about this over and over and it's something we talk about over and over internally and it's really meaningful.
We don't move on until our customers are successful with their projects. So this may mean changing our product direction, building new features and capabilities, it may mean investing in services, it may mean new service offerings. Whatever that happens to mean for a very specific customer, this is what we do to get our customers live and happy and ultimately successful. This idea of leading through innovation, our customers have now come to trust and expect that when they make an investment in Veeva that continues to get better and better over time. We take that trust very, very seriously and that's what drives a lot of the innovation that we continue to invest in.
And hopefully you were able to get a snapshot of today when we talked about some of those innovative things that we're doing really throughout all of our applications. So that's where I spent most of my time. I did want to summarize what Peter talked about. I didn't talk about cross 6 at all. But this idea of the industry is moving to a more patient centric healthcare system As drugs and as medicines become more targeted and more personalized, the patient becomes more relevant in how you provide care, the patient becomes more relevant in how a life sciences company goes to market.
So we see the opportunity to put the patient at the center. And when I think about the commercial cloud business, enabling that data, taking that data and creating those integration points between what we have in cross 6 and enabling that within commercial cloud becomes really interesting and really exciting when you start to be able to think about the possibilities of putting patient data in a CRM system that allows you to go to market very differently. So that will be a key theme that you'll hear more about over time as we start to announce more specifically what those integrations and that roadmap looks like. So with that, I want to wrap up the commercial cloud side of this. And thank you again for joining and spending the afternoon with us.
I'd like to turn it over to Avril England, who's the General Manager of Veeva Vault and she'll walk you through Development Cloud. For
As I was looking at it all of you, I was thinking, imagine if your businesses were like theirs, where out of 10,000 tries, you only got one right. That would not be good. But that's the business they're in, one right of every 10,000 tries. So it's high stakes and it's high pressure, but it's also highly regulated. They have to perform this business of evaluating these drugs under heavy scrutiny from health authorities around the globe.
And it was easier in the days when it was just, oh, well, let's focus on U. S, Europe and maybe Japan. But now because of the emphasis on getting to market quickly and Paul talked about that how important speed is, they need to be in over 100 markets almost immediately, which means 100 plus sets of regulations and compliance rules that they must follow, very high risk, very high complexity and very demanding from a systems perspective. We'll talk about that. The next one is the changing business model.
There were in the traditional approach, R and D was done in a very insular fashion inside the four walls of the organization. And increasingly that business model doesn't scale. We see many of the pharma companies today leveraging contract research organizations, CROs to help execute their trials, either in all or in part. We have many customers who actually use contract manufacturing organizations, CMOs to outsource all of their manufacturing. And beyond just these contract relationships, we have many customers now doing joint ventures with one another because the treatments work better together or there's opportunities to compound those drugs.
But all of that requires a level of collaboration that is really unsupported by legacy systems. The cloud is going to be a key enabler in this kind of transformation to a collaborative approach and Vault will be a big part of that. Talk about that one. And last but not least is the conversation around precision medicine. Peter talked about the profound impact precision medicine will have certainly on society, but you can imagine with that profound change will also necessitate business transformation in almost all aspects of the development lifecycle.
The systems they have today won't support it. The processes they have today won't support it. We believe that there has a big transformation effort underway to support this move to different payer models, different R and D models, different clinical trial models. And Vaught will be a big help to them in enabling that kind of transformation. So let's look at the customer maturity model.
Oftentimes, we find customers come to us because they have a specific and urgent need in a particular area that might be compliance in the case of, for example, an agency comes to a customer and does an inspection on their trial master file and finds it incomplete. With that finding, the trial will halt if they can't remedy it. You can be sure that they're going to try and fix that as quickly and efficiently as they can. Or a small customer who needs to get started and knows they have to have their quality procedures and documents tightly wound together. Paul's example early of starting with quality docs.
Those specific needs often lead to a point solution and they want to get it in and get it in quickly. But if there isn't a pressing need and there's just a push to do it better, smarter, faster, they're looking for more of an efficiency play. And we see customers who are doing that are looking to get rid of brittle integrations or duplicate data entry into systems that are maybe related but different. So for example, if you're using the trial master file, but you also need to get out and collect, let's just say 80% or 90% of the documents in the study startup process need to be automatically filed. Today, some poor person who does study startup is manually collecting all those documents and manually sending them to someone probably by email to put into the trial master file.
If those things were just together as one, that's much more efficient, better, smarter, faster. We find the majority of customers today are in the better, smarter, faster category. But they have big aspirations to move into a model of much more business agility, where it's not just better, smarter, faster, but preparing for change. They see change on the horizon, but in many cases at the departmental level, they're still burdened by a pretty complex system infrastructure and technology limitation. And there is an opportunity for them to reinvent themselves with a more holistic solution.
When you get past the departmental level and you begin to talk to heads of R and D, CIOs in these large pharmas, they are not talking about departmental solutions, they are looking at end to end development process. And the end to end development process requires a much different perspective than just simple departmental solutions. You need a connected single platform on which to really leverage that type of business transformation. So how does Vault help with that? The Vault Development Cloud really maps to the industry's needs and lays a path for where they're headed.
Yes, of course, the departmental applications that we talked about back in 2011, 2012, 7 years ago were focused on that point solution need, quality docs for quality, submissions for regulatory and the trial master file eTMF4 clinical. But it became quickly clear that to really drive efficiency, we needed to bring applications that could handle content and data together. So that introduced more complicated applications like the CTMS, clinical trial management systems in the clinical. It brought the quality management systems into quality. It brought registrations into regulatory.
That content into the data together was incredibly powerful. And it became clear to us at Veeva that if we could complete the suite, solve for the whole departmental need that we would really help our customers in more material ways. So that meant adding publishing to regulatory. It meant adding training into quality. It meant adding study start up and now payments, which we will talk about in the clinical.
Completing these suites in a more holistic fashion really gives customers at the departmental level a full solution that is completely integrated in a one stop shop. But the integrated development cloud is really where we know customers are going and we are paving a path for them to get there. With the development cloud, they can really tackle an end to end process. And we do that by adding in more of the development cloud processes. CDMS for all the clinical data management to go with clinical operations and safety solutions to handle all the pharmacovigilance activities that happen throughout the development lifecycle.
So we have the development cloud. We have 5 application families, anchored by an incredibly powerful platform. And we're continuing to innovate and invest in all areas from the platform to each of the individual applications, not just our new applications, but our existing applications as well. We persist and partner for product excellence by staying close to customers as both Paul and Peter talked about. Our customer success model means early adopters making them successful and building powerful products that will form the foundation for future reference selling.
What's true about this model as well as it doesn't just solve these departmental needs with fully integrated suites. It's really good for IT and we have lots of conversations with our IT brethren in these life sciences company that talk now about IT simplification. And it's interesting the conversations have changed from at first it was well we would never use the cloud because well that's scary in R and D to know actually we have a cloud first strategy what have you got in the cloud to actually we have a vault first strategy. Do you guys have one of those yet or are you building it and what's your timeline for delivery? And that conversation has dramatically changed in the 7 plus years that we've been working on Vault.
So I'd like to give an update in each of the areas starting with safety, our newest application family. Safety is an area where there was incredibly deep dissatisfaction with legacy systems. There's 2 dominant vendors out there, both of them are on premise, both have very expensive footprints, very rigid, very costly to upgrade. And when it comes time to do an upgrade, it's pretty easy to say, do I pay all that money for the upgrade or do I do something different? And when we announced our safety product several years ago now, I can remember going to customer meetings and having them say, when can I get that?
So we just announced it. We actually are starting building it now, but don't worry, it's coming. And I'm pleased to say it's here. And we have 10 customers already signed for safety and we have 4 of them already live with the product. They started their implementations in April.
They're live now in August. And we're using that opportunity again to continue to pursue product excellence in this area, get excellent market product fit and build a strong reference selling model for the future. But while we're doing that, we're also working on innovation in the safety area. And a particular area of innovation is a new product that we're working on called Safety AI. So what does Safety AI do?
It uses natural language processing and machine learning to take all of the inbound information that you might get about a safety issue. It could be in a text, in an email and what's called an E-2B case form XML and it can analyze all that information and consolidate it into cases that are ready for review by a person. And then talking with some of our early customers, they may have an example would be 500 people in an offshore location that are responsible for basically coming through this information to create the cases for review. They felt that with this kind of technology, they could drop that number of people from 500 to 200. So it will be a really powerful tool in the safety arsenal to really expedite case intake, make it more timely, make it much less costly and as you can imagine make it much less error prone as well by taking at least some of the human intervention out of the equation.
Let me talk now about Vault Regulatory. Vault Regulatory is a tough business because they have traditionally had to service the needs of every health authority around the globe. And to do that what they have done historically is put people and process and systems in the regions to make sure that they could satisfy those health authority requirements. But what that's led to is a situation where when you want to ask a super simple question, where are my products registered? That was a surprisingly difficult question to answer.
There would be phone calls and emails out to all these different regions. What have you got? What can you tell me? Send it back in an email? Can I merge it?
Can I have it reviewed? It would take weeks to get what is likely an error prone result for where are my products registered. It became increasingly clear that regulatory right for transformation and that this regional approach was not going to be a way to scale the business in the future. That created a huge opportunity for Viva Vault to help solve that problem. With Veeva Vault, they have one solution and that solution can be used and tailored for every region, but it's one global solution that does answer the question, where are my products registered.
We've seen strong adoption both in SMB and in our enterprise top 20 customers. But what's particularly interesting is the demand as soon as they got into using submission, submission archive and registrations in tandem and those products more in tandem in regulatory than any of our other applications came the desire to quote complete the suite. So in the regulatory environment, what you have to do is collect a bunch of documents, put them through an authoring process and then take them out of whatever application you're authoring them into send them to a publishing tool that then sends them off to the health authority. And then when you get them back from the health authority, you put them back in the system. It seems rather disjointed.
Pretty amazing if you think about the idea of while you're collecting the documents, you're publishing them, you're checking them for validation, you're assembling them. And when it comes time to actually send them to the health authority, they're already basically published. And that's the notion of continuous publishing. Never take them out, send them through the gateway electronically, entirely de risk the process. So we've been working really hard on continuous publishing for regulatory.
And on the SMB side of our business, the small to medium sized customers, where there's a focus largely on U. S. And Europe, they've been able to publish already 400 submissions to the FDA and are seeing a ton of benefits. Our large enterprise customers, especially the top 20 pharmas who operate in all markets need all the ECTD support for every single region and we expect to have that by the end of 2020. And that's when you'll see the enterprise customers begin to adopt publishing.
Quality departments, this is a group as you can imagine probably. The quality departments are probably the most conservative of all of our departmental users in the R and D suite. And they are traditionally focused on solutions that are spread across different manufacturing sites. Now what's interesting is that in the last 18 months, we've really see a change in the momentum of their interest involved. And I think it's led primarily by their desire for modernizing their systems.
We now have 10 of the top 20 pharmas using quality docs, which was a considerable increase just over the last year. In addition, we've had great traction on our new products. We talked a little bit about QMS, which is the quality management system. It's used to handle inbound deviations, complaints, audits and inspections from 3rd parties and even internal. And that particular product now has over 100 customers including 2 of the top 20.
In addition to QMS, we've added at the end of last year, we added a training product. Vault training is not just about training delivery of course in a highly compliant environment. What training is all about is managing who gets trained with which material and how often based on the role that they have. So it's a complicated training matrix and it tracks whether or not you are current in terms of training people for the roles that they're in. Vault Training does all of that and of course because it's tied to quality docs, it manages the content as well.
We have 15 customers already. That product became available at the end of last year and 6 of them are already live using Vault Training. The last product in the training suite that's new and exciting is called Station Manager and it's a tablet based application. It works on both iOS and Android. And it attaches itself to the shop floor to actual workstation on a manufacturing floor.
And it's particularly I smile because here's what you have if you don't have station manager. You have quality docs and you print out a whole bunch of documents and you file them into a whole bunch of binders. You may have to laminate the paper if it's really in a kind of messy or wet location. And then you send those binders out to the shop floor to be filed as the work instructions for whatever that manufacturing area is. And then if you need to change that work construction, you have to I mean, it's really archaic for the level of sophistication of the manufacturing shop floor.
I mean it's really archaic for the level of sophistication of the manufacturing shop floor this work construction thing is pretty bad. With Station Manager, you attach the tablet to the workstation and when the SOP is approved, it automatically just shows up on the tablet. And if you need to change it, then you put the new one out there by pressing a button in quality docs, which you're already using to author and approve those SOPs, standard operating procedures and out they go. So we're seeing already a ton of interest on Station Manager and I think it is the first step to get Vault even closer to the shop floor. So pretty exciting evolution for quality.
Clinical operations, sometimes called the crown jewel in the dev cloud suite. In clinical trial operations, we really started with eTMF as a solution for compliance. But there's been a huge desire inside clinical operations to break down what have been traditional silos. And of course, when we talk about the department clinical operations, when you look carefully inside, there's a group of people who only do study start up. There's a group of people who do document management or record retention.
Those are the librarians that track all the ETMF stuff. And then there is a group of people that do the site monitoring. They go out during trials and they make sure that the sites are operating properly according to the protocol that's been established. Those 3 groups often operated incredibly autonomously even though the information being collected was fundamental to all three groups. We now are seeing much more interest in breaking down those barriers to become more agile in the clinical trial process because clinical trials are going to be changing and they know it.
So we have 6 of the top 20 customers have added study start up into their eTMF application, which means half of our eTMF top 20s now have study startup as well. We're also doing a ton of innovation in CTMS. And this is a good example in the clinical trial management systems where documents and data together are powerful. So think about when a clinical research associate has to go out to a site and monitor them. The first thing they do is send them a letter that says I'm coming and here's what I need to look at.
And then when they get done the visit, they have to write up a report that says this is what I looked at. And then they send the site back letter that says here are the follow-up activities. The way we handle it inside Vault is, you plan a site visit as a set of data. I'm planning a visit. These are the people that will attend.
These are what I need to look at. Vault will automatically generate the letter and file it in the eTMF automatically because that's why working together works. That letter can actually be sent to the sites using Vault 2 if that's how you got it connected. But the nice part about having it as a document is if I want to say, oh and by the way how is your son doing, I am looking forward to seeing you next week, you can edit the letter slightly. That's kind of cool.
And then when you complete your visit report, again you do it as data. What happened when I was there? What was my checklist? What was I supposed to work on? And all of that also creates the final report which has to be filed in the eTMF to be compliant.
This is some of the magic of documents and data together. CTMS is an excellent example and it's why we now see over 50 customers using CTMS today. And we have one of the top 20 also doing a CTMS implementation and I'm sure it's one of what will be many. The last area that I want to talk about specifically in new apps relative to clinical operations is our payment application. With the traction we had on CTMS with our early customers, it quickly we quickly got feedback that what they wanted support for is the payment process.
So clinical trial management connects very closely with clinical data management. So where you're tracking what subjects or what patients have registered, where are they in the process and what activity is the site taking on behalf of the pharma to execute the trial. And the pharma companies have to pay the sites for the work that they do. They pay them sometimes by the procedure or by the patient. But they have to know what the sites doing in order to be able to actually make that payment.
Well, what Vault payments will do is basically get data from EDC and say based on a fee schedule, I know how much you should pay them and I'll create a payment record that you can send off to SAP to cut a check. And you can share that with the site to say your payments coming, here's how much and here's why. And that's what Vault payments will do. Again, forming a strong foundation for doing more specific work, not just in the clinical trial, but also related to supporting the sites, which brings me to my last point really on the clinical operations side. Yes, we have 12 of the top 20 pharmas, but we also have 4 of the top 20 CROs.
And this really is incredible fuel for the clinical network, which Peter talked about earlier, one of the first of the industry networks that we think will transform the way players in this industry do business together. In the clinical network, sponsors, CROs and sites are all engaged in delivering these trials, but they need to share documents, data, processes, protocols and procedures seamlessly and easily. Today, it's done as you can imagine either on zip drives or in email or on some cases still in faxes. The clinical network will break down all of those barriers and not just help it be easier but help it be faster. The pharma companies have a compliance burden to provide oversight of all the activities in their trials.
But the sites execute the trials and in many cases, these CROs or these clinical research organizations are executing them. Without something like the clinical network, how can the pharma company even really know what the status of their trial is except by asking for reports. With the clinical network, they'll see it easily. But in order for the clinical network to really work, you can't just have sponsors and CROs, you have to have sites. So we're really excited at Veeva and on the Vault platform to announce site docs.
And under site docs, there's going to be 2 products that we're building out specifically for sites. So the clinical operations products are really for our CROs and for our pharma companies. But site docs will be for individual sites. Site Vault Enterprise will be for the academic institutions or the large enterprise sites that operate clinical trials. You can think of the market size as being hundreds of sites and I'm very pleased to say we already have 4 customers live with SiteVault Enterprise.
But perhaps the bigger news especially with respect to how we'll power the clinical network is we're introducing Site Vault free, which is like a freemium version where there will be thousands of sites that enroll and get a free vault so that they can participate in the clinical network and execute trials seamlessly with their sponsors and CROs. And that's coming at the end of this year in December. So really excited about that one. I'd like now to talk about Vault CDMS, the clinical data management system. This is coder, EDC and Workbench.
Why Vault for CDMS? I mean it's clear that it's part of the development process, no doubt about that. But there are needs in the industry for a CDMS that is modern, agile and fast. There are 2 huge issues with today's solutions. And the first is around study build out and the second is around study amendments.
When a sponsor or a pharma company wants to execute a study, they have a big complicated protocol that's written that has to be translated into what data do I collect from patients when they are visiting me. And oftentimes what happens is the experts inside of a study team read the protocol and define what has to happen. But in order to get that into your EDC system, somebody has to program it. So now you have to translate those requirements to a programmer and that process on industry average is 12 to 18 weeks. Vault wants to solve that with a trial build out process done by study teams directly in 4 to 6 weeks.
And I am going to actually have Charmaine come up in just a moment and show you exactly how that will work. She is also going to talk about the second problem which is study amendments. Wouldn't it be nice that you had a plan and you have the 7 year trial and exactly your plan works out for the entire 7 weeks or the 7 years? It doesn't work that way. There are changes.
You learn as you go and the amount of data and the type of data needs to change which means a study amendment. In traditional CDMSs or EDCs what happens? With each amendment you take the system down, you put a new system up and you migrate all that data from old system to new system because new system has the new data requirements. If any of you have ever worked in systems before, data migrations are fraught with peril. There is risk in data loss or data corruption and the downtime associated to the trial just slows things down.
EDC will revolutionize how that works as well. We have had great, great momentum with CDMS. We have 40 plus trials live now across 30 different sponsors. So super exciting. That includes a top 20 pharma and a top 20 med device company.
We're also starting pilots now with other top 20 pharmas. And along the amendment side, happy to say that the amendment design that we have is working incredibly well. We've already processed over 60 plus amendments to the trials that we've been working on. So it's pretty exciting. Of course, we're not done, we're never done.
We continue to invest and innovate. And Peter talked a lot about the innovation in data workbench. The 280 lines of SaaS code going down to 16 lines of our own syntax. These are the types of material investments we'll continue to make to ensure that CDMS is modern, Agile and fast. But rather than tell you more about it, I'm going to turn it over to Charmaine who is going to show you how incredible that is.
Charmaine?
Thank you, Avril. So now Avril described for us some of the critical pain points and challenges faced by the industry in terms of study builds and study migrations. Specifically, on the lengths of those study builds, where on average, study builds can take 12 to 16 weeks. And she also described study amendments and the downtime and the risk to data associated with that process. Let's take a look at why this happens and how with modern cloud technology founded Vault EDC, we can meet those challenges.
Let's talk a little bit about how the study design process works today. With traditional EDC, to build in these systems, which are fairly complex to build in, you need advanced technical skills or programming skills to be able to build a study database. The study team who are designing and understand the protocol very well then need to work to build and design a specification document. This is a highly document based process that often requires PDFs and spreadsheets kind of going back and forth through the study team to develop at the end of it a specification. And we haven't even begun to build the study design in the EDC yet.
That specification is then handed over to the EDC programmers, who can then begin to build that study. But even building that study has its own challenges, where first, the entire study database is built in a black box. Then again, back to a paper process to deliver PDFs of that design and spreadsheets to the study team for their review and updates. They'll send those marked up sheets back to the EDC programmers to continue to enhance and develop their study design. But it gets worse.
As the study team continues to review what's been built in EDC, they realize that the specification itself needs updating, restarting that process again. So you end up with a highly convoluted, messy paper based process. Now that serial process is because of those legacy systems today. But with Vault EDC, based on a modern cloud platform, we can look to revolutionize that process. First of all, Vault EDC allows study teams to build in the EDC themselves the study that they want to build.
They know what they want to build into a simple user interface that involves drag and drop, they can simply build the study that they want. Then when it comes to reviewing and testing, again, they are not needing to build on a black box. Instead, as the study is being designed and built in the EDC, the study itself can be reviewed and tested in real time by all the relevant stakeholders. Let's see how we can show this parallel process taking place. Right now, I'm logged in as a study designer.
You can see here that I have my visit schedule. This is the schedule that the patients will follow as they visit their doctor and have certain assessments done and data will be collected during those assessments. Now as a study team member, I know that during one of these visits, the first visit of my study, I will need to collect some information on my physical examination. So I can simply search for that form in my list and pick it up and drag it and drop it right into my system. Now I've updated my study design, and it's ready for review by the study team.
Switching now into the data entry view of the same system, I can now test that design as it's being built. I'll enter a date for one of the visits, and this is an example of what I might do in the process of ensuring that the study design is meeting my needs. It's now adding all of the required forms for that specific visit, and we can see right there that, that physical exam form has been added. So with that, you can see that the study teams are now able to build what they want in the system directly. No need for advanced technical skills and no need for that convoluted process involving specifications.
You can also see that through that process, we're able to build in a highly agile and parallel process, allowing now our study builds to go less than 6 weeks. Now let's talk about that next problem, study amendments. This challenge involves a lot of downtime and hard work by study teams. Now why do studies have to even go through amendments in the 1st place? Why is it so inevitable?
Because the science continues to evolve. Studies are living entities. And so as we get to learn more about the science involved in studies, we learn more about new data that we need to collect. Also, as we're continuing to collect data through the process of that study from our patients, that data is continuously being reviewed and assessed and we learn other new things we need to collect or changes we need to make to that study design. So it simply can't be avoided.
Now let's talk about how in traditional EDC, we handle study amendments. As always, we begin by building and designing that study in that original database. Then when we know we need to create an amendment or change that database, we have to build an entirely new study database with that change in it. But we have to then move all of the data from the original database to the new one through the process of what we call a data migration. Now that data migration means that sites can't continue to enter data during that time, which can take several days to weeks.
Also, the data can't be reviewed to ensure that it's accurate. Now even more of a concern is the data loss and the risk associated with that. Data, remember, is our customers' most critical asset. So that data integrity is so important for them. So with risk of loss of data and corruption, we are really putting them in trouble.
Now let's see what happens when we consider that this is just one amendment. In a complex study, this can happen 20 times or more, meaning that those risks and that downtime is compounded. Now let's see how we tackle that challenge with modern cloud technology. In Vault EDC, what we can do is just as always build our initial study version in our clinical database. As we begin to collect data, that data nearly points to that study design.
Then when we need to create a new study version, we simply version up the existing study and that will then allow us to have our data point to the new study version. This is all happening within the same single database, which means that the data never moves, eliminating entirely risks around losing or correcting data as well as eliminating entirely downtime for sites to enter data and for sponsors to be able to review it. Let's see that in action now in the system. Right now, I'm logged in as a site user. And you can see here that in this form, I have a number of data fields.
Through the course of observing the data, we might notice that we actually need to enter in and have added to our design an additional data field, say, a heart rate or a pulse rate. So then I'll simply move into the study design interface. And right now, I'm in that same vital signs form, but from the designer's perspective. Just as we had added before a form to a specific visit, I can now add an additional data field to that form. Once again, I can search for that field and simply pick it up and drop it into the form wherever I'd like it to go.
Once that's in my form, in my new study version, I can now apply that version to an existing study patient. In this tool now, I can select the same patient. And because I know that I've already collected some data for that patient and yet those specific forms might be altered, I'd like to apply a retrospective amendment, thereby modifying the entire study design for that specific patient. I can now begin the process of applying that amendment. Now let's take a look at what that amendment looks like once it's complete.
I'm now back in that same subject number 17. Now my form is in an in progress state, because I now have at the bottom a new data field that I've just applied. But what's most critical to note here is the fact that all of the data that I had that the site had previously entered remains intact. So with that example, you can see now that there's virtually that there's really no downtime associated with a steady amendment in modern cloud technology like Vault EDC. And as you saw, all of the data remaining on the screen there, that there's also no risk to the data.
So in this way, we can be sure now that Vault EDC can promise us shorter bill times and amendments that are fast and risk free. Thank you.
Thank you, Charmaine. I always enjoy getting a look at the products in action. Thanks for doing that. I'm going to wrap up now and talk a little bit about the development cloud in total. So the development cloud is a series of application suites built on an incredibly powerful platform.
And that platform has proven that it has been the engine for innovation for each of the applications in the development suite. We've continued our investment in innovation and in expansion in every area, innovation in things like safety AI, but innovation in things like eTMF and expansion in terms of not just new products in that suite, but also in application areas. And as we talked about the Veeva way and our persistence for product excellence and our drive for customer success has earned us early adopter success in many of these markets in the early days of eTMF through the early days now of training and safety. And through that work, we've become a trusted platform for the life sciences industry. There is no doubt about that.
But even still it's early days. It's early days in every one of our application areas and we're excited about having a significant both runway for growth and opportunity to partner with the industry to really be transformational. There is so much work yet to be done, but we're looking forward to every bit of it. Thanks so much and I'm going to turn it back over to Rick. Thank you.
Thank you,
April and thank you, Charmaine. All right. We were going to take a break, but we're running a little late. And so in the interest of time, I'd like to just move to the next segment. And so if I could, I'm going to invite Paul Schauer up to the stage to have a conversation with one of our customers to talk about his experience with AVEVA.
So if you would, just give us a few moments while we get the stage set up for that.
It again here. Great, I think I have the mic back on. I have the pleasure of introducing our customer speaker today. We will run this as a little bit of a fireside chat. I will also give you the opportunity towards the end to ask couple of questions.
So if you have some questions, probably don't get so many chances to talk to Veeva customers directly, this is that opportunity. This is great having someone like Jeff here. I'll give you a little bit about his background. Jeff has spent a lot of his career in life sciences IT. He started his career more than 20 years ago with Amgen.
During the really high growth years of Amgen, he spent 20 years in IT at Amgen where he basically served every single possible IT function that you could in a life sciences company from R and D to manufacturing, the supply chain, all the way through to the commercialization. So this is really was kind of very formative for Jeff and being at a great company at a great time that was high growth. He was really able to learn really a diversified set of skills. And after he left Amgen after 20 years, he decided it was time to go do something new. He started at a small company called Kythera and they were pre commercial when Jeff joined Kythera.
So he was running all of their IT and business systems through the launch of their product. So again, tremendously taking that experience you had from Amgen and applying it to a very small company. Kythera, as you know, or as you may know, then went on to get acquired by Allergan, at which time Jeff said, hey, maybe it's time to go do that again. And here he is. Now Jeff is running all of IT at Atara Biotherapeutics.
So Jeff will I'll have Jeff expand a little bit more on that. But before I turn it over to Jeff, I want to share one kind of personal note about him because I think it's kind of interesting and fun and you get to know Jeff on a different level. So aside from spending all that time in life sciences, in his spare time, he has a winery that he runs and operates. And he runs and operates it with help from family and help from friends. So it's kind of a side thing that he does.
So if you think about Jeff's life, he's either working around drugs or he's making alcohol. So, he's an expert in both. So, with that, Jeff, it's a pleasure to have you here. I appreciate you.
I'm happy to be here.
Thank you so much for taking the time to be here. I'd love to hear from you. Atara Biotherapeutics, innovative company, pre commercial, has a really interesting immunotherapy. Jeff, can you tell us a little bit more about the company?
So, you heard from Peter today, he used a great term, precision medicine. And so, Atar Bio is in that sector, very specifically T cell immunotherapy, very different than maybe some of the other companies out there doing T cell autologously, meaning we take your cells, process them and give them back to you. Atara, we actually take healthy donated cells, much like you would donate blood. And if you think about that, I'm not a scientist, as you heard from Paul, I'm an IT guy. To me, this makes a lot of sense that you're taking healthier cells donated, you're specifically targeting the indication that we're going after.
Our focus is on Epstein Barr or EBV generated diseases. Our first one is a condition called PTLD, which is post transplant lipocyte proliferation disease, which essentially means it's a secondary cancer that you get after a solid organ transplant or a bone marrow transplant. And unfortunately, it's fatal. And there is no care for this condition. You also heard about the fact that many of the I think it was the percentages that Paul shared were in that innovative orphan drug status, because again there is no primary care.
That particular product candidate is called tab cel, it's in Phase 3 And part of the reason I drink heavily and make wine is because I need both Avril and Paul to help me with my job at Atara because you'll hear in a second besides tab cel which is heading towards commercial finish line, I also have another product candidate that's chasing MS. Using the same characteristics that I've just described with tab cel donated T cells, just recently scientific evidence shows that Epstein Barr is a trigger to MS. We've just released our Phase 1 clinical trial results, very optimistic in terms of what just think about the fact that Atara maybe curing MS. And that's the excitement I have from an IT standpoint, part of the reason Veeva is my partner, you've heard about speed all day long. And we have a saying at Atara, patients can't wait.
And if I can help deliver technology that helps us get to the finish line faster, little side light in terms of my daughter at age 3 contracted Epstein Barr and cytomegalovirus ended up at UCLA, we thought she had leukemia. Thankfully, she recovered from that, But unfortunately, Epstein Barr as a little kid, if my daughter has a transplant or some medical condition in the future, she may be a PTLD candidate. So I'm uncertainly not only just for my daughter, but everybody else that might be in that same circumstance.
Part of the
reason I love being in this industry space is kind of what you heard from Peter, the impact on individuals' lives, patients' lives. And unfortunately we all probably know patients in all different characteristics. So tab cel PTLD, MS is just Phase 1 and then we have some preclinical CAR T and looking at mesothelin as a targeted area. You heard from Avril that again a company like Atara, we collaborate with MSK for tab cel, we collaborate with another company QIMR out of Australia for MS and we collaborate with Moffett out of Florida for our CAR T. So the things that Avril described, that Peter described in terms of what Veeva is doing not just for my benefit, which is great, certainly Atara is using a lot of Veeva capability, but for the industry is why they're part of the strategic nature of what I'm trying to do at Atara.
Jeff, thanks for sharing the innovative pipeline that you guys have at Atara. Thanks for also sharing how this impacts you personally as well. I mean, I think ultimately all of us in here are patients at some point. What so your role at I talked about your role as running all of IT at Atara, what are the top priorities that you think about day to day given the stage that you're in as a company? Yes.
So part of the reason I wanted to make sure you understood, I got a commercial candidate and I got something that's preclinical is to help you appreciate the fact that as you heard from Paul at Kythera, I had the great opportunity of deploying a lot of the early capabilities with open data, with network in terms of helping Kybella, which was Kythera's product, get to the commercial finish line, all stood up in less than a year, very similar to the little example that you offered in terms of, hey, it didn't take us 7 years to get all that done, I like the what was it all in? So I'm ready to go all in Paul with Atara for tab cel, but that is obviously the commercial focus, so we're obviously on our promo meds, medcom, medical CRM pathway. But then on the early side on the MS and other characteristics, we just built a $50,000,000 manufacturing plant that's down in 1,000 Oaks, that's where I'm based. It's that manufacturing plant that has great needs that again Veeva products allow me to move at the speed at which the company needs to operate. And that is the great part about focusing on the commercial side and that's right now our commercial finish line we believe in the U.
S. Is early 2022, so that pathway is progressing. But I also have a number of other initiatives on the R and D side, So unfortunately, that's part of the reason I spend a lot of time in the vineyard is that's my therapy to just make sure that I keep my head on straight and focusing on the things that need to be done.
I heard all in, we will have some order forms before I leave the room, but so how do you think about your IT strategy as a company, what is it that you think about and how do you think given that you have this diversity across R and D and commercial with different products in the pipeline?
And it's really been generated from my experience, as I left Amgen, Veeva was just coming into replace Siebel as the sales force automation tool. And then as I mentioned, I went to Kythera and I was able to see many more elements of the Veeva platform being rolled out and deployed and see how quickly that could happen. So when Allergan acquired us, and I had the opportunity to head up at Tara, I knew going into Greenfield, no systems, I was employee 47, nothing is there. What would you do in terms of so basically, I had a very clear, we're going to be cloud first. And today, not only on the Veeva footprint, but with my manufacturing plant, everything I'm running in the plant is in the cloud.
So that strategy has played well for me in terms of the speed at which we can deploy. And secondarily to the cloud strategy is take the business process that the technologists have already embedded in that. Again, a lot of things you've seen here today, we spend very little time debating. The great part about the Veeva team when they come in to help you implement, they know their product well, they know the business process and we just were there to understand, adapt and deploy and get going.
So Jeff, could you give share a little bit more about the products that you have today and then what you're thinking about beyond what you currently have?
So as I started with the company, as I mentioned back in 2015, just a short story, I meet with the Head of Document Control and this is my first success story in terms of head of IT, small little biotech, you always want a quick win. And so the document manager said he hated his document control system. And he had already done the research he had already determined that quality docs was what he wanted. I'm like, oh, this is great. So nice part, we quickly signed a deal, 6 weeks, all validated, Jeff has his early win.
And so we went from in the single year 2016 quality docs, submissions, submissions archive and eTMF. And so that was all 2016. 2017, we continued in added QMS quickly as you guys deployed that. Added at the end of 2017, we had early medical MSLs hitting the field, so medical CRM, added promo mats, medcoms, what am I missing. And now we're starting to think about as you heard from Avril that we certainly contract a lot of our business and have to do that just based on the fact that with limited resources we kind of leverage what we can.
So we do use CROs, but we're looking to actually use Veeva CTMS as a way in which the CROs use that for our benefit. So again, that's the nice part about the tool set that Veeva provides, it gives us a great transition point from sourcing that capability to bringing it in or at least having the value of using a common tool set in the industry, which is great. So you
have your IT strategy is cloud first, you have built a lot of trust together, we have built trust together over through Amgen and Kythera and now at Atara. There will certainly be other vendors that you evaluate other systems that you need to purchase. What is the do you think about when you're evaluating an IT vendor? How do you make those decisions? What do you look for?
Yes, I think some of the things you've heard here today, certainly the track record of their capability and so forth. But part of the reason I love Veeva is 3 times a year, Veeva makes their product better. We've had circumstances even in the early days of submission, Vault being deployed, there's a feature that one of the regulatory gals was looking for. And the nice part about we deployed it knowing that it was coming in the next release. And those are the things that in my past life that would have been a showstopper, we wouldn't have moved forward, we wouldn't have made progress.
That's the great part about again, the engine, what was it, the Veeva way that was kind of described earlier, I didn't maybe appreciate that as much until hearing that today. Those are the things that I get the benefit of in terms of the ability to innovate, continue to build out the product capability such that honestly, my Veeva implementations are the places where I don't worry. Resources coming in, in terms of professional services, I haven't had any issue with being on time, on budget. Usually, there's a little extra money to throw a party for the team, that's always kind of nice to do. And just ran into one of the early implementation partners that we used at the last summit in Philadelphia, so that was kind of fun, we're kind of seeing hearing Peter about kind of the movement of talent in your company, I think that that helps me in the long run too, because everybody gets smarter and better as we go.
So you heard Veeva and Peter talk a little bit about becoming a strategic partner to the industry. How would you make that you heard our view on what we think about, how would you make that real from sitting in your chair, what does that mean to you?
I guess, I thought about that question in terms of strategic partner and think about it from a standpoint of all the different things you saw on the screen in terms of the functions that need to be performed by a company. And if let's say Veeva wasn't there, I don't get a prize for picking best of breed in all of those different functions, right. Hopefully, where I get my prizes, I find one company that can do it well that integrates immediately, I spent most of my career at Amgen deploying best of breed stuff and then trying to make it talk to each other. And that's for me is just one of the bigger elements of what Veeva's capability that just keeps on growing. I was in the audience when Matt Wallach asked about safety.
Should we do safety? Yes. Should we get into training? Yes. So for me, if I'm sitting at the table helping guide you in terms of where I think you need to go next for Atara, I think I mentioned this to you, Paul, already.
I think everybody knows small biotechs become lunch for big pharma. And at some point, this the great ride that I'm on at Atara is going to come to an end and but I don't feel like I'm done. And if I go to this next company, whoever it happens to be, I'm bringing Veeva along with me, because why would I want to me that's the part where I keep doing this and I'm bringing some of the same elements to Atara that I've seen success with previously and that for me some of my IT peers that I just had time with at the last summit, I think they are all in kind of for the same reasons.
So related to that, first thank you for the trust you have shown in us and we try to deliver, we work hard to deliver on that. Related to that though, I often get questions as Veeva delivers more products, we have more innovation, do customers get concerned about having too much eggs in one basket in the orange Veeva basket, how do you think about that? Is that a real concern?
In my mind, no, just from all of the things that I just described. I think one of the things that I've heard from my colleagues is cost of ownership or being able to understand all the things that go into the total cost of a solution like Veeva. And that's the part that sometimes I think is misunderstood in cloud capability in terms of all the things that you take for granted. It never goes down. You have a backup strategy and I mean, those are things that I just don't worry about, but has to be accounted for within the subscription model and so forth.
So from that standpoint, I would much rather have one solid company that can help me on both ends of the spectrum I'm involved with R and D and commercial. And I have a pathway to go from 1 to the next. And again help in the broader ecosystem of what life sciences and the rest of the industry is doing, that to me is just too valuable to toss away.
So I did say we are we have a couple of minutes left. I'd like to open it up to the audience here and see if anyone has any questions for Jeff directly. Who's brave enough to ask the first? We have one here. Hi, Jeff.
Thanks. Colin Duchamp with Sterling Capital. Just quickly on your comment on your history of deploying best of breed in your prior life at Amgen. If you care to speculate, if you could replicate what you currently have in the product suite with Veeva today using 3rd party vendors, how many vendors do you think it would take you?
So there's a slide that actually Veeva Eric Smith, who is the R and D sales rep, and it's a great slide because it's all the different functions that you need to run a small biotech. And I'd say there's probably 30 squares on that chart. And this was one of the early presentations I had Eric come in and present to some of my senior team. And you start putting all the best of breed solutions in those 30 boxes and that becomes a pretty powerful statement. And then in the next slide, you pass forward and say and turn all the ones into where Veeva sits today.
That's super powerful, that was part of what I did in the early going, not to say that I had to hard sell anybody. Luckily, Veeva is out there enough. As I'll share another story because I'm good friends with Matt Wallach and I was at a summit, brought some of my Atara folks. We met at the Sunday night social, This one gal who is there for the first time that introduces himself and she introduces, it's like, so what brought you to Atara? And her response was, they deployed Veeva and my last company had some other system.
And I thought Matt was going to lose his mind in terms of having a response like that. I think he dragged her over to somebody else to have her tell the same story. But I mean, that's a real story in terms of that there's a draw of I think people coming to Atara from the big pharma company down the street. And we're drawing them in because of the simplicity of not only maybe hopefully technology, maybe the fact that we're working on some precision medicine that's of interest, but also I think there's some simplicity in terms of working on tools that don't take 17 different interfaces to make work. Thanks for the question.
Some questions back here.
As you look at the product areas that you wish Veeva could deploy for you that they haven't, what would be the ones that come to mind?
So obviously, they've moved done a nice job in the quality area, we're taking advantage of the QMS area. So to me safety seemed like a logical play in terms of that. But if they can move further into just the manufacturing segment itself in terms of LIMS, in terms of electronic lab notebooks, again, all those places where there's documentation that's intensive would be a great play. So that's the part where doing more moving further into the manufacturing plant itself in different facets. I Okay.
You pick.
Let's do in the back.
Thanks very much for the question. Sandy Draper, SunTrust. Maybe reflecting back on your days at Amgen, as you said, one of the things interesting coming to Atara is you have this clean slate. So you can start from scratch. Thinking about Amgen and as you talk to other people at big pharma, they have a very different challenge because they've got a lot of those point systems.
Thinking about their challenges and maybe when you were back at Amgen, how does a company like Veeva, who's got all this stuff, how does it fit differently? What's the different thought process of how quickly we move? Do we stick on a point solution? What are the barriers to say, you know what, we've got so much sunk cost here? Well, we can run it for another year.
We can run it for another 5 years. What are the breaking points where you finally say, we have to get off of these point solutions or these 2 or 3? Thanks.
I think you heard from Paul earlier the big pharma that he used as the case study, that was certainly my experience at Amgen. We had pieces of Amgen realizing that they could adopt pieces of VIVA sooner than the rest of the company. I think companies are starting to realize, hey, you know what, instead of doing this piecemeal approach, let's just make a decision as a company, it's Veeva, and then roll out in phases. That's the part where my biggest challenge right now to be honest is trying to so we're 400 employees, again, we have all these different type of activities going in the plant, number of systems now stood up. And my biggest challenge right now is to make sure that I don't end up with a bunch of master data challenges.
So we're trying to get ahead of master data management. So I mean, those are some of the things that the more you can play with an integrated partner like Veeva that's helped you solve a number of those things that I just don't have to worry about. I have to worry about that in the non Veeva space and then I have to worry about the integration and the data to make sure that things still work. So those are the types of things back to Paul's question about, would you trade that away for best of breed? No, I wouldn't, because that I spent again, like I said, I spent most of my career at Amgen trying to stitch together and integrate and declutter things that we built up thinking that this was a great point solution, not thinking about the larger ecosystem of the fact that it was going to become a global company selling worldwide.
So hopefully, I answered your question just from a standpoint, at least what I see from my colleagues that have kind of now kind of moved around the country in different capacities, I'm seeing that more and more.
Jeff, thanks so much for joining us today. My pleasure. Jeff lives down in Southern California with the winery, I made trip up here, you do have an office location
in We're headquartered in South San Francisco, so this was kind of an easy commute for me. So thanks for the opportunity.
Thanks so much for having us and bringing to life what a lot of the things that we talk about every day to customers, to analysts, to investors. You made it real and you made it personal. Thank you. So pretty valuable. Thanks so much, Jeff.
Appreciate it.
Thank you.
All right. Thank you.
Thanks very much, Jeff. That was great. It's a people based business. You got employees, you got customers, right? That's kind of how it works.
It's not more complicated than that. So you can keep employees being productive on the right things, given the supportive environment where they can do their best work. You can focus on the people and the customers, so they can do their best work and the whole thing works well together. So if I move forward here, I'll just go through our key highlights again. So strategic partner to the industry, it's a big industry, dollars 2,000,000,000,000 industry, very meaningful for our society and it's the beginning of a very transformative and long change to precision medicine that is making things complex and they need a partner to deal with.
You heard Jeff, right, what the medicines they're making, that's revolutionary science, absolutely science fiction 50 years ago. So we want to be the partner to that great industry. We're really energized by that. Business model, the Veeva Way, how we focus on customer success, our values, make decisions, focus on product excellence, bring in people for Generation Veeva. And then you see we are in quite a few markets and we're able to do that, get in multiple markets, pick the right ones, stick with it, get leadership, even new markets we're going into like safety and clinical data management.
Then you got a peek into innovation, how we're really innovating in the software. So in summary, that's Veeva. We're doing incredible things trying to be the most strategic partner to this great industry. All right, with that and then I guess we go right to Q and A, right? Okay, we will clear the stage a little bit here then we will come up for some questions.
To to
Thanks very much for all this information. Maybe I'll ask 2 questions, one for Peter, one for Tim. Peter, I'm curious about the focus you put on what you call the clinical database as a new R and D area. I just wanted to make sure I understood how new this is for Veeva and how big your ambitions are and whether you plan to potentially go up against the database giants in the pharma space? Maybe you could frame your ambitions there.
And then for Tim, maybe I'll just ask both at the same time. Tim, I wanted to ask you about RPO. It's a metric that a lot of the other SaaS firms are giving and guiding to, but so far not really a focus area for Veeva. But based on your disclosures, it's growing 46%, 47% the last two quarters. It's 2x your revenue growth rate.
Why isn't that a meaningful metric that can give us that we should hone in on and give us some comfort about future revenue growth? Thanks.
Yes. I'll take the clinical database first. So what we're building the clinical database there is that it's a specialized database, very, very specialized application centric database. I haven't seen anybody try to do that before. It takes a special level of skill.
The large database players, they wouldn't do that. They're not into that type of specialization. So we won't run into the Oracles, IBMs, things like that. And how serious are we about it? Yes, pretty serious.
We've been working on it for a little over a year now. It's a significant development team in a specific new area of the building, because it's a different type of software than we've done before. It's a specialized database, an application specific database. You couldn't do that before cloud, because you couldn't make a database that you could only sell to maybe 1,000 customers. It just wasn't economical.
In cloud, you can do that. So it's sort of uncharted territory.
And Carl, on the RPO or remaining performance obligation, part of the thing to remember about Veeva is still the large percent of our arrangements with our customers are 1 year or less. We are talking about and you heard us talk about these multi year ELAs, and those are happening more frequently than they were in the past. So when you have most of your arrangements still 1 year or less, RPO doesn't really reflect renewable business that you'll have in the year because you've yet to go ahead and build that. So it's not or the order form or the arrangement has not been signed. So it's something that my team and I, Carl, are looking at internally to sort of understand it.
The reason why it's growing beyond where revenue is growing is because the mix of revenue from the multi year arrangements is growing at a faster clip than the 1 year or less arrangements. So sort of contrasting that to our SaaS competitors, ServiceNow, Salesforce, Workday, where the vast, vast majority of their arrangements are 3 to 5 years in length. And so the renewal frequency is not as much. And so RPO for them is a much more effective measure as they think about the growth of their business.
Ken Wong from Guggenheim. Perhaps this question is directed towards Paul. When thinking about the long term growth profile of the Commercial Cloud business, you guys are going to push to north of $1,000,000,000 You mentioned that Nitro is going to be part of that, ANDI is going to be part of that. How should we think about kind of when those contribute? And then how have you factored in some of the headwinds that you guys might see or you guys are seeing from IQVIA and when that might get resolved?
Yes. So I mean a lot of first we're super excited about a lot of the innovation that's happening on the commercial side. We have core CRM and that's put a foundation in place to be able to drive adoption of add ons. It's also put a foundation in place to make Nitro and ANDI even more valuable to our customers. So we are excited about that direction.
Nitro and ANDI, we have been more conservative with those estimates. We've ratcheted things back. And you can see what we're doing in the marketplace. We're focused on different parts of the market where we're not being blocked, which is actually forcing us to innovate in different ways, innovate even faster, because we're adding real value in those segments of the market that are valuable. So while it may not be the broadest and the largest part of the market in commercial, it's a super important.
You heard from Jeff earlier, those are the kinds of companies that are taking advantage of Nitro and that are taking advantage of Andi. We're not going to stop innovating because it may be a smaller segment of the market, we're going to continue to innovate, we're in it for the long game. So I guess maybe the easiest, the shortest way to answer it is we've ratcheted it back a little bit, we're going to continue to focus, we're in this for the long term with Nitro and Andean. I think it's hard to predict exactly when we'll fully break through in that marketplace because of some of those restrictions, but we will remain focused and hopeful that it happens sooner rather than later.
But Ken, just to add really quick, we don't think that the market And how long does it take to capture that market opportunity. And that was thought of and baked into the numbers that you saw Peter and I share today.
Hi, Kirk Materne with Evercore. I'll echo Karl's comments. Thanks very much for all the data today. It's really useful. I guess maybe just two questions for me.
First to Peter, again sort of on IQVIA. For those of us that don't understand maybe that their data monopoly, given that you're such a strategic partner to such a big part of the pharma or life sciences industry, if you can't settle this in a court situation, are there other ways to start building out a new sales database that you can kind of get that data from your partners to try to do another workaround. I don't know if that's possible, but I
was just kind of curious on
your thoughts there. And then, Tim, I realize you're going to love a 5 year ahead margin question, but is there anything structural why margins wouldn't be higher on 3x the base of revenue in counter 25? I assume you're assuming a pretty big build out in sales and marketing outside life sciences by then, but could you just maybe talk about that a little bit as well? Thanks.
First question in terms of the sales data and maybe an offering that would compete with IQVIA. It's certainly an option in the future. It's a difficult one because of the interdependence relationship between the customers and the Wall Street and the data supplier contracts that IQVIA has. So there is an inherent network effect in there that's hard to break out of. But it phrase, IQVIA has a major competitor that's really starting to make headway in Japan, for example, great partner of Veeva called Encyce, a group of Japanese wholesalers, drug wholesalers got together and said, we've just had enough of IMS that's really harming the Japanese Health Care Society here.
So they banded together and they've already secured 2 of the top twenty pharmaceutical companies in Japan to switch over. So it's starting to fray there in Japan. Another place where it's starting to fray is in specialty pharma. This is a kind of a complicated term specialty pharma, but what it means is there's some medicines that are so specific that you can't just go into the Walgreens or Rite Aid and get them. They may be something that can be administered only in maybe 10 or 12 centers around the U.
S. Because they're a specialized medicine, a specialized infusion, specialized diagnostics. So you bring the patient there. Now in that case, that's not a type of thing that IMS really does. It doesn't go through the retail chain.
So pharmaceutical companies are looking for more of a direct connection with these specialty pharmas, which are actually distribution centers. So there is an area where there is unmet need. And there is also areas of patient data. That's not a historical strength of IMS. So our approach would be stay patient, develop a network of partners, specialized data providers, work this through the courts and just stay vigilant and continue to mainly what I want to do and what Veeva wants to do is, we want to concentrate on our customers.
It doesn't feel good to concentrate on a competitor that's doing this monopolistic behavior, right? It's not really in our DNA, but we're realizing we have to do that a little bit to take care of our customers. So I wish I could have given you a much more simple answer, but it is nuanced. You get sales data is not just sales data. You've got multiple regions to think about and you've got multiple types of sales data.
So it's not an all or nothing.
Kirk, thanks for asking on the margin question. So as we look at the 2025 model that we presented to you guys today, our thinking is, and I think I said it in my prepared remarks, we're characterizing a company as the company that we've always wanted. And I think we've displayed over the last 10 years, a good example, which is a company that balances growth and profitability. And so what I think we were trying to articulate or what we were trying to articulate, I should say, is an investment model that we still have the opportunity at that time to invest in areas to drive growth beyond the 2025 revenue target. And so wanting to be thoughtful about how we balance that over time.
And most of that, as Peter talked about, will be organic. But there may be some inorganic that as you saw even with Cross6, a very well run business. Cross 6 will be dilutive to our business. It will be very hard to find many companies if we were to buy them that will have the margin profile that we do. So I think all of that was in the calculus, Kirk, as we thought about it.
But at the end of the day, we want the optionality to be able to invest and we want to build that balance of growth and profitability over the very long run, which is why we present the numbers as we did today.
I love these live questions much better than the conference call. You can see. I can see people.
Well, sort of. Melissa
Dunn from Morgan Stanley. Two quick ones for you. So just a follow-up on the margin question. As you think about that optionality for investments, are there is there anything in OpEx in particular that we should think about that you would be looking at? And then also on that 2,000,000,000 dollars target for Vault, is outside Life Sciences in that?
And if so, how big do you think that that can become?
So I'll take the first one if you want to take the second one. So I think that what you'll see in terms of future investment areas will be in line with the same places we're investing today, either customer facing areas like sales and services, because again, as we talk about those investments, it's about either future revenue growth or customer success. So it's in the customer facing areas like services and sales, and it's also in the product areas where we see an opportunity to lean into a new product area, invest in that way and drive, as I said, either customer success or long term growth. So it'd be in those areas that I think you would see those investments as we look for opportunities to invest.
And then in terms of the Vault, the $2,000,000,000 involved, that will be largely inside of Life Sciences. The specific makeup when we get there of how much of inside of life sciences and how much of outside, that's not something we're going to give guidance on at this time. It will still be early for outside of life sciences with those specific products. So it's not going to be the lion's share of revenue or anything. It's inside of life sciences.
Thank you.
Thanks. I was impressed with the cross X disclosures. It's bigger, growing faster and more profitable than I had expected. Can you talk a little bit more about kind of ways you see to kind of fit the 2 products or the multiple products together? And then do you think it's something where you can actually accelerate that 40% growth rate?
And fast and last thing I'll put, are you willing to let them be that profitable while you do it or is it something where you maybe step down their margins while you invest in
it? It's
a good question. In general, CrossX, yes, has a good way to grow with their existing business. This was a company, well run company, a founder led company, didn't take venture capital. So it was sort of bootstrap themselves. We see ways we can invest in the business, because they cross 6 and Veeva together, they're going to get more inbound activity, more things, more things to do, right, because that just happens.
And gosh, we could already see it in the 1st week. The gentleman who is the CEO and Founder of CrossX, his name is Asaf, And he was getting more inbounds than normal because it's related to Veeva related stuff. I was getting more inbounds than normal related to Crossick stuff. So we're going to have to beef up the team there, but it won't you won't not to an extent you would see it in our overall operating model. And then the other area where we'll beef up is around innovation, what we can do with CROSIX.
We have certain things in Veeva, CROSIX has certain things. There's going to be new products that come out of the combination. Those products need to be staffed with new teams, because the cross 6 business itself is growing, both in terms of number of brands and products. So, yes, Asaf and I want to grow that business as fast as we can in terms of people. Now in an intellectual property based business, you can only grow it so fast.
If you grow it too fast, well, okay, the average person has only been here 2 months. They don't nobody knows what's going on. And then product suffers and the whole thing goes over. But I wouldn't be surprised if we grow the employee base there in Crossix at a rate of 50% or so over the next couple of years. And that you can do if you're precise about your processes and your hiring and you can start a well run company.
You start pushing it faster than that, okay, maybe a little faster. Certainly, if you push that over 100%, well, other people might know how to do that. I don't know how to do it. If you know, you just come get me afterwards. So it's not an issue of like we're trying to conserve cash or margin.
Sometimes throwing people and money at a problem, you actually won't get to where you want to go. Excellent question. Did I answer that one?
Hi. This is a question for Avril about Vault.
I'm over here.
Over here. Thank you.
Right here. Yes.
Yes, the lights are cut.
We've heard about this trend of pharma and biotech companies examining failed trials to try to figure out why they failed. And one reason why they might have failed is because the population that they used was too broad. And if they had done genomic sequencing of the patients, they might have chosen a narrower population. So they're looking to do that. How will VAULT help them in that process?
And what about if there's the wrinkle that the study was done before they had the software and so their data is not in a form that is easy to digest and re examine?
Great question. Let me first start by talking about, I guess, the first question, which is how would they do it if they had BOLT? I do think Peter talked a little bit about the clinical database on the clinical data management side. And I think the preponderance of data and your ability to get to it quickly is the ability to fail fast. How do you know quickly I either don't have enough enrollment or I don't have the right characteristics?
How do I analyze it not in retrospect, but in real time? I think cloud technology and access to data and even the clinical network, oftentimes what's happening is the data is being collected at the sites. The person analyzing it may not get it today until milestones in the trial that are way too far apart to make good decisions quickly. And I think we're seeing changes to that. And we're also seeing things like adaptive trial design.
When Charmin talked a little bit about amendments and the like, that happens from data analysis. And should the decision be made not to modify the trial, but to cancel it quite possibly, but it has to do with access to timely and accurate data, which they just don't have today. To answer the question about trials that didn't start on VIVA Vault, some customers choose to migrate data in, some customers do not. Some customers choose to migrate to CDMS and bring historical data with. That's not always the case.
Some will finish a trial with their legacy technology. I haven't had a lot of conversations with customers about that, more conversations about how to fail fast, not as much about migration. I can't speak as quickly
too early in the market with where we are at Vault is, it's too early in the market with where we are at Vault. These are customers that the experience that we have, you saw Avril pointed out that we have over 40 trials now run on Veeva. These are companies that have started to go all in on Veeva or that are evaluating and looking to the future and not necessarily solving some of the challenges of maybe failed or slowed or delayed trials. I think that's less of the focus today.
If I could add a little color on there. We're early in the clinical data management system, right, the EDC. And it's also really mission critical. We have to work our way up from the Phase 1, etcetera. Right now, we're talking I know we're talking to a customer about a particular study, they haven't decided to go with us yet or not, but we're getting pretty close.
And this is probably $100,000,000 study for this customer, dollars 100,000,000 into it. Why is it $100,000,000 They're going to get data from over 10,000 patients, over 500 clinical sites in over 30 countries over 5 years. But the indications that they when they collect all that clinical data, that's for a compound, a particular compound that could have multiple indications. So that's a wealth of data. That's I don't know, I could do that math.
That's a lot of that's a ton of data points. Their ideas, yes, they're really have their eyes on the clinical database, because that took $100,000,000 to make all that data. The key is get it in there, have it quality, have it be accessible, so you can do exactly that, the retrospective. But honestly, I think cleaning up the existing data is really hard. Some customers may attempt that.
That's going to be really hard and much of that data may be 3, 4, 5, 6 years old now, it may be a bit too old. So I think most of them are looking forward on the average. And if the biomarker wasn't taken at the time, well, then the biomarker wasn't taken. And you just got to move forward.
It's James Fotherford with Stephens, over here to the left, sorry. A couple of questions from me. First, Paul on CRM, you've mentioned how global expansions has been a trend for kind of the better growth in CRM we've been seeing lately. I'm just curious if you can help us maybe quantify or give some anecdotal comments around how much that opportunity is left given it's a driver to your business? And the second question is around OLS.
I know kind of early days opportunity, but are there any mile markers you can provide in terms of perhaps revenue or number of sales people you have engaged on that to help us kind of get a sense to the question earlier, how big portion of your Vault business that can be over the long term? Thank you.
Yes, I will take the first one on CRM. So I would say the majority of our when you look at our large enterprise customers, so let's say top 20 customers who are operating generally more than 50, 60, 70 markets, the vast majority of them have completed global deployments of Vida CRM. So that's happened already. There's a handful that have not. So I think that's what we're seeing.
I think the other impact that we're also seeing is acceleration in some very specific emerging markets. China was one that stood out. There are some specific regulations in China in terms about how they're thinking about provisioning health care and how they're thinking about a set of drugs that fall under kind of more like primary care type drugs and then a whole set of specialty care kind of drugs where they're giving exclusivity to certain kinds of companies. In the primary care market, it's mostly Chinese domestic companies, but there are a couple of multinational companies who have access to those markets, they're scaling up significantly. So we're seeing some of that impact happen also.
So some of it is very market or country specific. So the vast majority has happened, but there's still some opportunity left there as well. We are running out of top 30 companies. The vast majority have moved to Veeva and they are driving the benefit of the scale and the benefit of moving to Veeva and harmonizing their processes. So I think that's much of that's happened already.
In terms of the outside of life sciences, that's what we look at that. It's early 2016 4 that are over 7 figures, 4 that are over 7 figures, probably one of those is getting close to 8 figures. So that's kind of the way to look at it and we're focused in on the enterprise. Also the market is of a specific size, right? This is a way of us stretching our muscles outside of life sciences in a very disciplined way.
So, chemicals, cosmetics, CPG, large enterprise and then this quality regulatory and claim, that adds up to about $1,000,000,000 TAM, dollars 1,000,000,000 plus. So, we're our team that's going after that is it's right sized for that. And we're making good progress. We'll give you updates as we go along. Right now, we're not breaking out specifically revenue for these different areas, because we want to retain the flexibility to do the things we do need to do.
And I would say, as with anything that's early, the revenue, it's not really what we measure to, because we're measuring to the early adopters. So if we put revenue guidelines out there suddenly that kind of makes people measure to that. So that's something we don't do. And you'll see that also in the safety area, the clinical data management. So we'll give you anecdotal evidence as we go along.
Thank you.
Hi. Thank you. It's Tom Rauter from Stifel. Thank you again for the presentations and the detail today. Paul, I want to build on that last question just on commercial and tilt it towards the add on side of things.
So if we look back over the last several years, I think approved email, CLM, the penetration rates on that got pretty high, 70%, 80% maybe. If you look at Engage, Align, some of the other add ons that are just sort of getting some deeper penetration, how long do you think it will take to get the customer base to the type of penetration you saw with CLM and approved? And part of that question is you hinted that the decision making may come at a global level. Why is that happening now where it's been at a very regional level? Is it simply because they have all your CRM seats and now it's one decision maker?
I'd love to hear more detail on that. Thank you.
Yes. So you're right. I mean with the just to put a frame of reference in place, close of marketing is north of 80% attach rate with CRM, approved email is north of 50% in terms of customers. And then you have the add ons, the other add ons that are anywhere in the 10% generally in the 10% to 20% range. We are starting to see the I would say there's 2 things that are happening, 2 effects that are happening.
One is that in the different markets they're very these are not standardized systems today in how a company operates. So they either don't have a capability or they have something on paper where they have very different vendors and very different technologies and the local markets have the autonomy to operate as they choose to. So many of the systems that they buy in a local market, the local country has the authority to make the decision on which vendor they choose. As Veeva as more of the add ons are being adopted and they're starting to see that value and it's playing out in certain markets, it spreads virally typically spreads virally across some of the other regions. So that's how it's been operating historically over the past couple of years.
We've seen it start in a region, establish some market success, the other regions see it and then they continue to expand globally. In terms of why now, what is that what's really that driver that's causing them to shift from looking at a regional decision to a global decision, it's companies need to operate faster, they need to operate differently. So companies are talking about global initiatives to move to digital transformation, a much more efficient way. And you can't really do that when you have autonomy in the regions with operating on legacy systems. So I think there's the some of the initiatives around digital transformation, using AI, driving data, driving more consistency, the same reasons they did CRM globally 3, 5 or 7 years ago are now playing out with the add ons.
The other impact I would suggest is that some of the add ons, there's a significant change management impact. So when you change out your CRM system or when you change out your global content management system, what we've done is we've replaced what they have with much better way of doing it, but they already had a CRM system. With some of the add ons like Engage, for example, many companies don't have an equivalent. They don't have a way of doing remote meetings today. So they're learning the change management.
They're learning how should reps schedule meetings with doctors, will doctors react to remote meetings. And those are oftentimes very local decisions. The way that happens in Japan is very different than the way that that happens in China or in the U. K. So that's another impact that we're seeing with the add ons is that the change management is very different, which drives the adoption at very different rates.
It's harder to dictate that globally despite having the efficiencies.
We probably have time for a couple more.
Yes. I had a question. No one knows what the political environment will be in 2025, course, in the U. S. But if you take the view that we're our country is slowly moving toward a single payer system, What have you gained out what the dimensions of either the upside or potential downside on both sides of the business are from if a system looks like, say, the U.
K. Versus Germany or Japan, just could you help us understand that a little bit?
Yes, I will take a stab at that. I mean, certainly none of us can predict what that looks like. We do know that if that scenario were to play out where it was moving to more of a centralized kind of government owned entity as the primary payer would certainly have kind of 2 impacts. 1 is you can imagine from an overall pricing impact, pricing would be negatively impact from a life sciences perspective just because of the fact that you have a more centralized single payer system. But at the same time access should in theory also increase.
So per unit pricing may go down, volume may go up. It's hard to predict exactly what that net impact looks like on the industry. It may not be as bad as some people think, it's going to depend on which of those two factors has a higher impact. If you assume, it's rational to assume that maybe that impact is stronger negative to the life sciences issues, there is a lot of rhetoric in politics over drug pricing and where that may play out. One thing to assume is that it's going to impact the suppliers of the life sciences company, Veeva would be one of them that this could have an impact on.
But balancing that out maybe the fact that technology helps to drive efficiencies as well and helps to drive market adoption in their company. So it may have some level of impact on how companies look at Veeva and they look at all of their suppliers to reduce their overall spend, but they may also look to Veeva to drive some of the efficiencies that we talked about today in terms of getting drugs to market faster, how you commercialize them, how you accelerate your position in the marketplace. So really hard question to predict the answer to. We do think about that all the time. But I think there's some balancing effects really on both sides.
I had a question, I guess, on the medical device Diagnostics side. You guys haven't really focused much on it over years, but in terms of your presentations, but I know you're holding your first medical device diagnostic summit and in general, VIVA sort of locked out of outside of pharma, the CRM side, but the needs, I guess, in medical device diagnostics around quality regulatory safety, PROMOMATs is identical. Is it that just you guys don't talk about it as much? I know you talked about the Elcon win at EDC or how do you think about that opportunity, which seems like a direct adjacency with less pricing headwinds or other things potentially relative to outside life science or other things?
Med device, it's a multifaceted question. We have customer success is the number one, right? So we have to figure out when do we have the capacity to go after this customer segment, which is do we have the capacity and the management team bandwidth to do this right? Do are we defocused in other areas? Is our product going to be a good fit for that or can we add more people?
And what's the other things pressing on that product. So in the Med Device area, CRM is not a concern because that's an area where we can't do that there. Say, we have a partnership with salesforce.com, they do that. So we're primarily concerned about Vault. Traditionally, we've really had our hands full in life sciences, right, going inside of pharma and biotech, going as fast as we can, really stressing that Vault platform, and in particular, really stressing Vault platform, and in particular, really stressing that regulatory product, which is maybe arguably the most complex of our products.
So we were always a bit hesitant in medical device. We had quite a few ProMats customers because the stress wasn't there and the product would work, etcetera. We started to have a few quality customers, but not so many because QMS was heavily needed. But now the stars are aligning. So we've had a focus now on Med Device.
We have a leader for Med Device who reports directly to me. It's referred to inside Veeva as a startup. Now that's relatively new. That's new as of this certainly as of this year and towards the later part of this year. Why are we doing that?
Well, platform is maturing enough, it can handle that burden. The regulatory is mature enough, we can add med device specific features in the regulatory and the QMS is mature enough, we can add those QMS med device specific features in QMS. So and therefore you do see in Minneapolis, we'll have our 1st Medical Device Customer Summit in Minneapolis. Med Device is an important area. I guess last thing to mention there is they're under change too.
The regulatory environment in Med Device is getting more scrutiny. Why? It's all the personalized medicine, right? More diagnostics, more specialized medical devices, more combination therapies where you have a drug and the device together. So that area is both growing and has more regulatory scrutiny.
It's a big area. It's very diverse. The set of things you do in there is very diverse, but it's big. If you look at that $2,000,000,000,000 roughly, roughly one quarter of that, slightly less than one quarter of that is medical device of some type or another. So it's an area that we'll focus on.
We didn't focus on it so far purely because of customer success. And if you get in too fast, too far, you don't actually go faster, you go slower. So now we're ready and we're really excited about it.
All right. We are unfortunately out of time. So we have to wrap up. Thank you all to everybody that joined us on the webcast today. And thank you all for coming and spending the afternoon with us in the room as well.
I'd like to invite you to join us in the lobby for refreshments, continue the conversation. But otherwise, we'll wrap up. Thank you again for joining.