This Stock Could Be The Next Salesforce

'Software as a Service' (SaaS) has been having a very long moment, proving a powerful business model for the bigger tech companies to incorporate and increase recurring revenue. Salesforce (NYSE: CRM) has been at the forefront of this trend, with investors receiving a massive 900% return over the last decade.

With that in mind, it's no surprise that investors will turn their heads when a new company comes along and steals some of that thunder, as Veeva Systems (NYSE: VEEV), sometimes known as 'mini-Salesforce, has done. 

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What is Veeva Systems?

Veeva Systems, like Salesforce, offers state of the art customer relations management (CRM) software, specifically to companies in the life-sciences industry such as Amgen (NASDAQ: AMGN) and Jazz Pharmaceuticals (NASDAQ: JAZZ).

The company has two primary products: its CRM offering which allows sales reps to better market their drugs, and their newer Vault product. This provides companies with a secure system through which they can process clinical trial data and take new drugs to market.

If you're wondering whether or not Veeva is a good investment, here are some of the numbers behind it:

• Since 2015, Veeva shares have grown more than 440%.
• It has a strong market share of more than 80% within the life sciences sector, with 19 of the top 20 industry leaders as customers.
• It has grown more than 36% in the past 12 months, compared with the S&P 500's (NYSEARCA: VOO) 20% in the same time period.
• It is planning to expand its workforce from under 3,000 now, to more than 10,000 by 2025, making clear its expansion plans.

For Veeva's earnings call on March 3, the company is expected to announce revenue of more than $1.09 billion for its full-year 2019.

Veeva's Salesforce connection

As it happens, Veeva was co-founded by Peter Gassner, who built Salesforce's CRM platform. After leaving the company, it became clear to him that the Salesforce platform could be utilized to better serve customers in different industries with specific needs.

Gassner pitched the idea to his previous bosses at Salesforce, and the two companies entered into an agreement -- Gassner would use the Salesforce platform for his new company, and Salesforce would not try to compete with them, focusing solely on the life science industry. As the first movers in the industry, the company quickly acquired its first one hundred customers and grew rapidly from there.

Veeva and Salesforce's rivalry

'Rivalry' is not the right word for these two companies' relationships, as this would be akin to saying that the Dallas Cowboys and L.A. Lakers would be rivals when they're playing different sports.

What might be a more accurate question, would be 'which should I invest in?'

There are cases for both:

Veeva Systems

It is a company on the rise, as seen by its stock growth shown above in recent years that is comparable with the likes of The Trade Desk (NASDAQ: TTD) and Teladoc (NYSE: TDOC) over the past 3 years, at more than 200% growth. Also, unlike many of its peers, Veeva is profitable, bringing in net income growth of 28% last quarter, as it continues to grow in a space where it is largely unchallenged.

Salesforce

Salesforce began as a simple CRM product but has grown exponentially over the past two decades. In fact, it is one of the only U.S. companies that can proudly say it has grown by more than 20% in revenue every year for the past 20 years. It is also beating out the biggest names in SaaS such as Cisco (NASDAQ: CSCO) and Oracle (NYSE: ORCL), showing that increasing competition should not impact its growth.

In short, either would be a good investment, so why not try both? 

Veeva Systems Growth

Veeva has built a near-impenetrable moat around itself in recent years through first-mover advantage, similar to Amazon (NASDAQ: AMZN) or Budweiser parent Anheuser-Busch InBev (NYSE: BUD).

The life-sciences industry is still largely untapped, leaving plenty of room for Veeva to grow, with the company planning expansions into other regulated sectors such as cosmetics or biochemistry. With this in mind, it has set itself a target of reaching $3 billion in revenue by 2025.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds positions in Salesforce. Read our full disclosure policy here.