"Digital transformation" -- a catch-all phrase for efforts to replace old methods of operating a business with more technologically advanced ones -- was already moving rapidly before 2020. But COVID-19 has accelerated the trend. Faced with an adapt-or-go-extinct crisis, massive updates are underway, propelling the economy into what salesforce.com (CRM 1.35%) co-founder and CEO Marc Benioff has called an all-digital era.

Given the situation, I think the outlook is bright for Salesforce and for life sciences technologist Veeva Systems (VEEV 0.59%), which partners with and used Salesforce to build its Veeva CRM, core to its Commercial Cloud product. I own shares of both companies. If you want to buy just one, your choice might come down to your investing style.

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A life sciences technology pure play

Over the last five years, Veeva stock has been a 10-bagger, returning shareholders over 1,000%. While trailing-12-month revenue is up "only" about 200% over that span of time, the company's free cash flow (revenue less cash operating and capital expenses) per share is up over 700%.  

Granted, Veeva is now trading for a high premium after its most recent run: 30 times current full-year expected sales and 92 times trailing one-year free cash flow. But such sky-high premiums are the norm these days for high-growth and highly profitable software names. And Veeva ranks high as far as future potential goes with its focus on software for biotech, pharmaceutical, and more recently, consumer goods (like cosmetics and chemicals) companies. The process of developing medical treatments, drugs, and other products is in need of updating with new automation and data management tools, and Veeva is leading the charge on this front.  

This was on display during the quarter ended July 31. Revenue increased 33% year over year even during the worst of the economic lockdown to halt the spread of the novel coronavirus. Management increased full-year revenue guidance to at least $1.415 billion (up from $1.38 billion). And while this cloud software firm is still very much in growth mode, adjusted operating income is expected to be at least $540 million this year, up at least 31% year over year.

Veeva's valuations are beginning to look a bit stretched after the stock has doubled in value so far this year. However, for investors looking for a broad-based industry play on biotech and pharmaceuticals, I think this is a great place to start. 

A massive digital transformation ecosystem

Salesforce is a good example of why I wouldn't bet against Veeva even though it's currently at sky-high valuations. Salesforce was once a small-ish but scrappy cloud software company developing services in the customer relationship management (CRM) niche. But over the last two decades, it has grown into a tech platform juggernaut, currently with a market cap of nearly $250 billion (to Veeva's nearly $42 billion) and recently earning a spot in the iconic 30-stock Dow Jones Industrial Average index.  

The fact that large and fast-growing firms like Veeva use Salesforce to build services, as well as smaller companies like recent IPO nCino, is a testament to just how powerful and important Salesforce has become. And in spite of its massive size, it's still going strong. The company expects fiscal 2021 revenue to grow at least 21% over the previous year and exceed $20 billion for the first time.  

Granted, Salesforce is an acquisition-happy company, historically using a combination of cash (free cash flow generation over the last 12 months was $3.48 billion) and its high-priced shares (trading for 72 times free cash flow and 12 times current year expected sales) to keep its momentum rolling. It's a strategy many investors aren't comfortable with, however, it's worth noting that even though shares outstanding have increased 39% over the last five years, free cash flow per share has far outpaced that rate and has increased more than 170%. At the forefront of a massive move to a digital economy and propagating other software firms, Salesforce stock deserves to be a core portfolio holding.

Which is the better buy?

Choosing a better buy here is tough. But for investors looking for the most upside potential over the next decade, Veeva is a great pick as the younger company, even with an incredibly high valuation and more focused (and smaller) industry. That's not to say Salesforce should be ignored, though. It's a massive enterprise already and has plenty of runway left ahead of it and is well on its way to potentially joining the trillion-dollar-market-cap club. As the larger and more mature stock here, I'd venture to say it will be less volatile than Veeva over the next 10 years, but have a lower overall return.

If you can't choose and you think global digital transformation has a long way to go, I say just buy both.