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Could the Microsoft-Teladoc Partnership Threaten Veeva Systems?

By Keith Speights – Jul 31, 2021 at 9:31AM

Key Points

  • Microsoft and Teladoc are partnering to integrate Microsoft Teams with Teladoc's telehealth platform.
  • The integration appears to be a smart move for both Microsoft and Teladoc.
  • This collaboration doesn't appear to be a direct threat to Veeva Systems at this point.

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Teaming up is smart for Microsoft and Teladoc.

Microsoft (MSFT 1.99%) and Teladoc Health (TDOC 4.56%) recently announced a partnership to integrate Microsoft Teams collaboration software with Teladoc's telehealth platform. In this Motley Fool Live video recorded on July 19, 2021, healthcare and cannabis bureau chief Corinne Cardina and Motley Fool contributor Keith Speights discuss whether this Microsoft-Teladoc partnership could present a threat to Veeva Systems (VEEV 1.65%).

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Corinne Cardina: Let's talk about telehealth. Microsoft and Teladoc have teamed up. They are doing a new partnership that's going to integrate Microsoft Teams app with Telehealth from Teladoc, specifically for healthcare clients, so hospitals, health systems.

My question for you is, could this be a threat to a company like Veeva Systems where this B2B healthcare tech integration is really their bread and butter. What should investors know?

Keith Speights: Well, first of all, I would say this is actually a really smart move for both Microsoft and Teladoc Health. For Microsoft, it's yet another opportunity for this big company to move more into healthcare. That's something that a lot of the tech giants are doing. Microsoft has already done to some extent, so this is another good move.

The company has had a lot of success with its Teams app, especially since the COVID-19 pandemic hit. This partnership with Teladoc, I think, should make Teams even more attractive to healthcare providers.

What about for Teladoc? Well, this is an opportunity to piggyback on Microsoft's success with Teams to some degree, and it's also just a testament to Teladoc's platform. Microsoft picked it to integrate with Teams. It had other telehealth platforms that could've gone with but Microsoft chose Teladoc, so that's great news for the company.

I would say that anything Teladoc can do to become more ingrained with third parties could help the company fend off a potential challenge from Amazon (AMZN 1.96%). Amazon is launching its own telehealth product called Amazon Care this summer, and so I think anything Teladoc does, like this integration with Microsoft, helps it with that particular competitive race.

Now, as to your question though, could this be a threat to Veeva, my initial reaction is that it probably won't be. At least not right now. Veeva does have some collaboration functionality built into its products. It has also tied its CRM system into teams to some extent. But for now I don't see this Microsoft-Teladoc partnership directly threatening Veeva all that much.

However, I'll throw in this caveat, if this is just the first baby step in a much larger plan for Microsoft and Teladoc to challenge Veeva more directly, more overtly, I suspect that these two companies could potentially be a formidable rival to Veeva, so watch out for what happens next.

On a side note, I wouldn't be shocked at all if Teladoc becomes an acquisition target at some point and I think Microsoft would definitely be on the shortlist of potential buyers if that happens down the road.

Cardina: That's right and we know Microsoft has been looking for acquisitions, they are certainly in that acquisitive mode, so we will have to keep an eye on that, very interesting.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Keith Speights owns shares of Amazon, Microsoft, and Teladoc Health. The Motley Fool owns shares of and recommends Amazon, Microsoft, Teladoc Health, and Veeva Systems. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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