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Video Collaboration & A/V

6 Reasons Why Zoom is Winning the Video Race

Catering to both consumer and enterprise customers and providing a simple to use video solution are just a couple of reasons why Zoom has pulled ahead.
Headshot of Dave Michels, of TalkingPointz
Dave Michels
September 03, 2020

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Business people racing to the finish line
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After reporting its second-quarter 2021 results, shares of Zoom rocketed up 40.8% in trading. Zoom added $37.4 billion to its valuation in a single day — that’s about one eBay. Those types of spikes are typically associated with new disruptive technologies; it’s not something we see in enterprise communications very often.
 
It’s no secret that online meetings have become essential during the pandemic, but it’s not as if Zoom is the only option. So why the Zoom boom? The financial analysts will provide riveting charts and spreadsheets of irrefutable logic that the company is over or undervalued. Here, as an industry observer, I will offer six reasons why Zoom is winning during the pandemic:
 
  1. Prosumer — Zoom is one of the few meeting providers that cater to both consumer and business customers, which creates a larger addressable market and offers some synergies as well. For example, people select Zoom for online social gatherings in part because they use Zoom at work. The reverse is also true; people are using Zoom at work because they used it at home. This brings me to freemium.
  2. Freemium — Zoom has always had a freemium model. While freemium isn’t as rare in enterprise communications anymore, it’s still the exception. Zoom’s free version isn’t missing key features either. Free users have access to the same features that paid users have, with meetings restricted to 40 minutes. That’s long enough for short meetings, but embarrassing and frustrating on traditional one-hour meetings. The pandemic has forced many people to try online meetings for the first time, so no-cost trials are attractive.
  3. Simple video — Zoom, and many other providers, have made video meetings simpler industry-wide. However, initial implementation can still be complex. Zoom offers users a quick path to first engagement. I’m talking about the time it takes from the website to hosting. A new user can sign-up for an account with just an email address, obtain meeting capabilities, and host a meeting. There’s plenty of legitimate reasons why other providers make this more complex. For example, some are geared toward enterprise plans that require IT involvement. Sometimes, video is a component of a more complex application. Many providers bundle meeting capabilities and telephony services. The pandemic rapidly changed the demand for meetings, and Zoom abides.
  4. Product placement — Product placement sells. It used to be a big deal to have branded phones appear in popular television shows (Cisco in West Wing, Mitel is Boston Law, etc.). This year, it’s about the logos powering television interviews. I haven’t done any statistical analysis, but I see Zoom a lot. And, they often call the solution Zoom even when it’s not.
  5. Agility — I’ve written about Zoom’s agility many times. I don’t know of any other company that can respond as quickly as Zoom. Even if it’s a disaster of its own making, Zoom responds quickly and appropriately. There have been several examples, including outages, app store conflicts, and security concerns, and in each crisis, Zoom is fast with communications and solutions. It’s not just a reflex; the company expands functionality at breakneck speeds. Most recently, it’s been accelerating the global availability of Zoom Phone. It has also rapidly shifted its focus during this pandemic to hardware solutions for working at home.
  6. Transparency — Zoom is an open book. The company provides regular communications with stakeholders via briefings, blog posts, interviews, and social media. It hosts Zoomtopia as an annual user conference, and regularly communicates with industry and financial analysts. Partners also are well informed. The executives at Zoom are relatively easy to reach. When Zoom was focused on security improvements this past Spring, it provided weekly updates (via video), including open Q&A with executives.
 
It’s pretty clear that investors now expect ongoing growth for Zoom, and that’s exciting — but not just for Zoom. It’s becoming generally agreed that online meetings are here to stay. It’s about time!
 
It takes more than a few online meetings with video and/or content for audio conferencing to lose its allure, and that’s finally occurring — globally. Video has been the exception for far too long. It’s one of the few benefits of this awful pandemic. This acceptance has caused Zoom to pop, and it’s also spreading to other video providers and work-from-home enablers. Essentially, the market is growing. Remote work may be here to stay, but offices and conference rooms will return — with more cameras.
 
Dave Michels is a contributing editor and analyst at TalkingPointz.

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