What are the top 10 SAAS products that are being commonly used by life science research labs?
Seven top companies hold the largest market shares for collaboration-type SaaS within the Life Sciences Market, including SAP (7%), Microsoft (6%), Veeva Systems Inc (5%), IMS Health (5%), Salesforce (3%), IBM (2%), and PerkinElmer (CambridgeSoft) (2%). In year-over-year (YOY) growth, Veeva Systems led the group with 36%, while IBM and Microsoft trailed with -5% and -4% respective growth rates. Each of these companies provides a variety of different types of software that is used for collaboration (of all types) in this industry. Premiere products include SAP Jam Collaboration; Office 365 (with a suite of connected programs); Quintiles IMS; and Salesforce CRM for Life Sciences, among others. Companies in this industry often pay more than double the rates of other industries. Expert sources note that costs for Life Sciences labs and businesses have gone up across-the-board for purchase and/or rental spaces, employee salaries, software costs, and marketing costs, with Bioinformatics’ report “Lab Budgets and Sources of Funding in 2017” providing the most in-depth up-to-date granular information on this topic available (though it is behind a paywall).
GLOBAL & US LIFE SCIENCES SOFTWARE MARKET & VENDORS
AppsRunTheWorld notes that the global Life Sciences Software Market was close to $6 B in 2015, including licensing fees, maintenance contracts, and subscription revenues. It should be noted, however, that this market covers not only applications in the laboratory, but also those used by researchers in other ways, like for collaborating on research. They list the top 10 SaaS vendors in this market as: SAP, Microsoft, Veeva Systems Inc, Oracle, IMS Health, AutoDesk, Salesforce, IBM, PerkinElmer/CambridgeSoft, and BioClinica.
In reviewing each of these, I found that most of the companies from that list offer various types of Software-as-a-Service for the Life Sciences Industry, including the specific types of SaaS products about which you’re inquiring.
They are (listed from largest to smallest):
3. Veeva Systems Inc
4. IMS Health
7. PerkinElmer (CambridgeSoft)
These seven companies’ applications/products made up 30% of this market (globally) as of the end of 2015, with a full 60% of the market going to “Other” companies (and 4% to AutoDesk, 5% going to Oracle, and 1% going to BioClinica). It should be noted that the specific market share for each company (as noted on the spreadsheet) depicts the sum total of all the applications they sell within the Life Sciences Market, not just those you’ve identified as most important. I could find no public sources that broke down that information – by company – by product – by market share any further than this that was not behind a paywall.
Lastly, I have only included seven rather than the full 10 requested for two reasons: (1) The three companies removed offered similar products but not for this industry, or offered different (non-relevant) products for the correct industry; and (2) No other company represented a significant market share, so it would not have been possible to accurately predict the last three companies belonging to this list based on publicly-available information.
COMPARISONS: SAAS PRODUCTS & COMPANIES
The detailed findings are within this spreadsheet for your ease in viewing. As recommended, these products focus on activities like document sharing, editing, reviewing, image processing, and collaborating among those who work in Life Sciences Research Labs.
In short, the companies listed in the previous section (#1 - #7) are those found on the spreadsheet. Sections encompassed on the spreadsheet include: Company Name; URL; 2015 Company Market Share & YOY Growth; Major Relevant Products; Product Uses; and Product Pricing, where available.
If you’re interested in other top-rated SaaS Collaboration Software (used across ALL industries), this database of rankings from Capterra is filtered to include only web-based products (SaaS), as well as those having the complete list of available features for this software. There are six products making the list that are rated at 4-stars and above.
FINDINGS: LAB SPENDING (US)
Without further details or a clearer explanation, it was not clear what exactly you were seeking with this part of the query: “This is how the research lab budget is split by category and by specific product”. I could find no information leading to how much Life Sciences labs spend-per-category on specific types of software, nor on SaaS-type software of all types. Nor could I find information on how lab budgets are set up. Since there are so many different types of labs and research facilities falling into this industry segment, any general information would not apply across the industry. Unfortunately, none of this particular information appears to be tracked anywhere that is publicly available.
So, to provide some insight into what goes into this industry’s lab budgets, I cobbled together as many current resources as I could find that outline this information to the best that we are able to do. This information is broken down into category-chunks below. It is my hope that this provides you with enough to meet your intended purposes.
• OVERALL COSTS, FUNDING, REVENUE: Gene2Drugs reports on Bioinformatics’ report “Lab Budgets and Sources of Funding in 2017,” which covers the Life Sciences Market in the US, Europe, and Asia, Although the full report is paywalled, the summary provided valuable insights. They note that, “Both academic and pharma/biotech researchers report budget growth for FY2017. However, academic researchers expect a decrease in FY2018” by about 1.5%. JLL states that, “The overall cost of operating is rising due to increased lab rents in top-tier clusters, R&D costs, and higher wages for skilled employees.” They also report that VC (venture capital) funding and investments from the industry have led “to an uptick in small and mid-sized biopharmaceutical companies” presenting “a unique opportunity for larger players to engage in niche research and manufacturing”. Additionally, they note that the growing influence of pharmacoeconomics and approaching patent cliffs have affected the avenues for revenue and growth for many companies in this industry. However, some companies have used strategies like tax inversion, business swaps, and M&A to reduce costs, while others are benefitting from an “influx of new sources of capital” (from things like new products, M&As, diversification, and VC/private funding). Additionally, as shown in this FASEB report, there are a wide array of grants and government funding programs for this industry, which serves to funnel millions into it annually. Although Gene2Drugs reports that “funding success rates for most major funding agencies in the US remain relatively low” overall, which significantly limits the growth opportunities for companies in this market. Additionally, they note that, “In contrast to academic labs, more than half of the pharma/biotech labs surveyed have budgets greater than $1 M,” with 13% having budgets larger than $5 M (the latter percentage is expected to increase in 2018).
• EMPLOYEE SALARIES: JLL notes that wages in this industry “are growing as Life Sciences companies compete for top talent,” and their data shows a significant spike in annual mean wages and employment growth between 2012 and 2015. In their 2016 Life Sciences Salary Survey, TheScientist’s research found that those working in this industry in the US are the highest-paid in the world, with average annual compensation equaling just over $100 K. In academia, the average salary sits just below $91 K a year. Research assistants average around $61 K each year on average. The survey notes significant differences among various titles, as well as across fields-of-specialty, and genders. In 2016, the highest salaries went to employees in the Biotechnology and Genetics fields of Life Sciences. The survey has more data that might be of interest to you, so be sure to check it out.
• LOCATION RENTAL RATES: JLL notes that laboratory and office space rental rates for companies in this industry have also been climbing nationwide. There is a significant lack of available (appropriate) space, especially in urban areas, “and it is driving real estate solutions ranging from new development to creative renovations of first-generation space”. Additionally, Life Sciences properties are offering “investors the security of guaranteed cash flow from long-term leases by credit tenants in a sustainable and growing industry”.
• CRM & SAAS SOFTWARE: PharmaLive reports that, “Though the cost of CRM systems varies widely, life sciences companies in particular pay a high price for SaaS software subscription fees – often double or more than what other industries pay”. The reasons behind this include that CRM systems for this industry are highly complex, this industry is highly-regulated with larger dollar amounts required to cover those processes, and the large cost-differential in these systems within developed and developing markets. They note that this segment of the industry (CRMs for Life Sciences companies) “is currently dominated by one or two providers, which leads inevitably to higher prices”. One piece that may be of great interest to you is, “This stems in part from the industry being risk averse in technology selection, and often choosing the biggest provider is an attempt to limit perceived risks”.
• SALES & MARKETING: PharmaLive notes that companies in this industry “spend large amounts of money on sales and marketing, with a significant portion of that budget going to technology”. While, PharmaExec predicts that “digital spending by Life Sciences Marketers [globally is expected] to grow to $14.25 B by 2018”. They also predict that an average of 19% of these companies’ marketing budgets will be spent “on non-personal digital channels” by 2018. In 2016, the US leads this with 33% of their marketing budgets being spent on these avenues.
The “Lab Budgets and Sources of Funding in 2017” Report from Bioinformatics might be your best bet in finding the granular-level detail for which you are looking, though be advised it is behind a paywall.
ADDITIONAL USEFUL INFORMATION
This report from JLL offers a highly-in-depth look at the Life Sciences Industry in the US in 2016. It includes information on rising costs, space demands, the evolution of the industry, industry themes, and specific breakdowns of 16 Life Sciences Local Markets across the US. It offers a very comprehensive look at this industry and could prove to be quite useful to you.
In conclusion, the top seven companies that provide SaaS collaboration software for the US Life Sciences Market (as identified by largest-to-smallest market share) include: SAP, Microsoft, Veeva Systems Inc, IMS Health, Salesforce, IBM, and PerkinElmer (CambridgeSoft). While SAP holds the dominant market share at 7%, Veeva Systems demonstrates the highest YOY growth at 36% than any of its competitors.