Zoom is no stranger in today’s world of video and collaboration. Organisations would have heard of Zoom, trialled the product or are now users of the product for video collaboration. Zoom’s success is built on the simplicity of their technology and the ability of the solution to be deeply embedded within workflows. They have put some serious thoughts into user design and how that experience through the app or when launching the solution from the PC/ laptop allows for a smooth integration to email, calendars as well as other popular collaboration applications (including Slack). The market for cloud videoconferencing is growing rapidly. As the market shifts towards new and more agile ways of working and as co-working spaces rise globally, the need to collaborate and communicate instantaneously without too much hassle and interruptions will be critical. We are living in an era where it will be all about the experience.
Zoom’s share value has risen more than 120% from the $36 IPO debut price. Zoom has been focusing on building a base of high-value customers (those that spend more than USD 100,000 per year for services). In the last quarter alone the number of high-value customers went up by over 17%.
Rapid expansion outside of the ANZ region
Zoom has witnessed rapid growth in the ANZ region in recent years. Demand for the solution continues to come from both medium and large enterprises. Japan will be an important market for Zoom and they are starting to work with some big names in the market such as Rakuten and are expanding on growing their partner network. With a good data centre footprint which is critical for video and collaboration, other key markets for Zoom in Asia include India, South East Asia, Hong Kong and China. Their wins in these markets are from some of the biggest brands and conglomerates. Zoom’s growth in Asia is demonstrating how their cloud-based video solution is becoming the preferred platform, even if IT has already invested in other cloud video offerings. Demand is coming from the lines of business and not necessarily through IT. That is a big differentiator – Zoom being used by lines of business changes the entire sales process. It is now driven by word of mouth and individual user experience and LOBs which then becomes a companywide opportunity for Zoom. When you put that into context, the sheer numbers in terms of users within an organisation becomes large.
The launch of Zoom Phone
Zoom launched their Zoom Phone cloud phone service in Australia, supporting local phone numbers and PSTN access with new metered and unlimited call plans. Customers have the option of using their own carrier or using a Zoom number. The launch of Zoom phone should not be taken lightly by their competitors as they have so far succeeded in pulling customers to their app and impressing them with the user experience. Once the customer is locked into Zoom, the user experience has somehow led them to want to use it even more. With the launch of voice, they are now pushing themselves deeper into an account by creating upsell opportunities in workplace video, collaboration and voice technologies. This allows them to take on UC players across the stack of video, voice and collaboration.
Accelerating deep partnerships with leading cloud innovators
Zoom has strong partnerships with leading cloud platforms. Zoom’s partnership with Dropbox allows customers of both services to start a Zoom Meeting while viewing or working on shared files via shortcuts built into Dropbox’s viewer tool. The Atlassian partnership, for instance, allows Jira Ops to be integrated with Zoom. Users will be able to start a meeting directly from a Jira Ops ticket with anyone associated with the ticket. These are some of the partnerships and it demonstrates how Zoom has thought about other critical cloud apps that are important for day-to-day work and collaboration and the ability that can make Zoom the app that can provide that in-between integration for collaboration.
Ecosystm Comments
Zoom’s architecture is video-first, cloud-native and optimised to process and deliver high-quality video across devices. They reported recently that their approach to video has been uniquely different from that taken by others who have attempted to add a video to an aging, pre-existing conference call or chat tool. Zoom developed a proprietary multimedia router optimised for the cloud that separates content processing from the transporting and mixing of streams.
With the launch of Zoom Phone and the adoption they are witnessing of their video platform, Zoom is set to be a leading provider in video and voice collaboration. We can expect Zoom to further build on the office collaboration stack in the near future. As organisations start deploying solutions from cloud innovators such as AWS, Slack, Microsoft, Google and others, Zoom stands out from that standpoint. They are a cloud innovator that has thought about the issues of the past and the pain points of those using video. The thinking behind user design and simplicity and the integration to workflows has paved the way for the success they are seeing today.
As they grow their presence with some of the largest brands and Fortune 500 companies in the Asia Pacific region, they will also start attracting partners who will want to be part of that journey with them so it’s a win-win for both parties. These partnerships will include a range – from the existing players in the video to other workplace collaboration vendors.
For the fiscal year ended January 31, 2019, Zoom reported that 55% of their 344 high-end customers started with at least one free host prior to subscribing. These 344 customers also contributed to 30% of revenue in that fiscal year.
The journey has just started for Zoom in Asia Pacific and we can expect the next 12 months to be good for them as they expand rapidly across the region.