Zoom's latest planar shifts
How the video conferencing giant is completely changing it's battlefield
Welcome! This week we explore Zoom’s audacious ambitions in the video market to grow even larger than the mammoth that it is. If you are new here and are looking for recommendations, you’ll like this article on Edtech in India, this article on a Chinese giant’s unique approach to healthcare and this article on LinkedIn. Cheers!
There's a joke that if Google wants to beat Zoom, it just has to keep making the Meet icon bigger and bigger. Considering the way Meet is pushing its product to compete with Zoom in the recently expanded video conferencing market, it is not far off.
It's common knowledge that if any one company has benefitted massively from this pandemic, it is Zoom. Zoom daily meeting participants grew from 10 Mn in December 2019 to 200+ Mn, market cap increased from $16Bn in January 2019 to $142 Bn currently. A lot has been written about why Zoom was the largest beneficiary but it essentially boils down to three things
Frictionless onboarding (No logins required for attendees)
Seamless video performance (with low internet bandwidth support as well)
Security and privacy (increased focus in 2020)
As Zoom became big, so did Google Meet's icon and its forced integrations. The logic was simple. Zoom does not own calendar, which is the entry point for all meetings.
Email —> Calendar —> Meeting links
So the same advantage that contributed to Zoom's growth (imperviousness to login) also prevents it from having any sticky network effects. And Google, with its ecosystem advantage, easily cross-sells its product. Slack faced something similar with Microsoft Teams.
Everyone was waiting for the same overtake to happen to Zoom. And then Zoom changed the battlefield completely.
From Zoomtopia October,
Some of the announcements from our Day 1 keynotes with Zoom’s CEO, Eric S. Yuan, and chief product officer, Oded Gal:
End-to-end encryption (E2EE) — Starting next week, we’ll roll out end-to-end encryption for free and paid Zoom users around the world.
OnZoom — We introduced our public beta for OnZoom, an online events platform and marketplace for paid Zoom users who want to create, host, and monetize classes, concerts, or fundraisers via the Zoom Meetings platform.
Zoom Apps — With Zoom Apps, you’ll be able to use your favorite apps like Atlassian, Asana, Box, Dropbox, PagerDuty, and Slack directly within the Zoom platform.
UCaaS enhancements: New and enhanced features across our platform Zoom Meetings, Zoom Phone, and Zoom Video Webinars.
Customizable SDK — Developers can use our new customizable SDK to bring high-quality video, audio, chat, and other Zoom features directly into their custom-built apps for Android, iOS, and web.
Zoom Cares — Our new philanthropic entity, Zoom Cares, builds on our culture of caring with a commitment to making an impact on education, social equity, and climate change.
These seem small one-liner updates but actually divide Zoom into three (potentially massive) streams
Zoom as a work partner
Zoom as a video support partner
Zoom as a video platform
Zoom as a work partner
Zoom’s core offering has been video conferencing for enterprise clients. And it wants to go deeper into the customer’s wallets by expanding its product suite. Zoom Phone was launched in 2019 to replace the more traditional PBX devices. PBX is estimated to be a ~$5 Bn market, growing at a 15% CAGR mainly on the base of cloud and VOIP offerings. [1]
Tha hardware push (brought about by partnerships with hardware players like DNet, Poly etc) has also continued for Zoom Rooms, which is pegged on to provide support in a remote+offline hybrid future.
Basically, Zoom's way of saying that any communication you need at your workplace, it will cater.
On the software front, the additional integrations announced earlier (with Slack, Altassian etc) further aide in online remote work. Eric Yuan also stressed on the developments using AI in the earnings call,
As AI not only do you have the meeting transcription, but also how to analyze that timely manner. Let's say, if you change the topic, I give you a clear reminder. Hey, please slow down, right? So, to detecting or something like all those AI features.
Zoom as a video support partner
Broadly, video as a content can be divided into two parts
Live
Live streaming (concerts to games), video chatting (business & entertainment), live classes (coding to crossfit)
Recorded
From 20-secs Tiktoks to 20 mins Youtube videos to 2 hour Netflix movies
Zoom has built its reputation on performance and security for live video conferencing. It is natural for it to leverage this to aide in any live video application.
By providing the customisable SDK, all apps that require live video as a part of their application can pay $100 for 4000 minutes to outsource the entire video function to Zoom speeding up their development without any technical hassles.
Zoom as a video platform
The most under-appreciated announcement is of OnZoom.
OnZoom enables anyone to host live events and monetise. With this move, Zoom enters into a much larger playing field, competing with Youtube. Youtube (and even Facebook live streaming) host these events, but the monetisation model is not as straightforward there. With Zoom, creators get an end-to-end solution, worrying neither about video performance nor about monetisation.
Think of it as a Substack for video. Just like Substack enabled writers to charge directly for their content, without worrying about ad revenue, similarly, from live gym classes to coding to cooking classes, everything can be hosted on OnZoom and monetised easily.
The challenge here will of course be distribution, however, Zoom's current reach provides a good starting point. Also, this service comes at no extra cost for paid accounts, thus incentivising adoption further. Once there is a critical user base, the two-sided network effects will kick in to propel further user growth.
Some of the other interesting use-cases mentioned in earnings call was using Zoom for the virtual property tour. During the last 10 weeks, over 50% of the newly launched properties in Singapore were closed over Zoom.[2]
By expanding the scope of play, Zoom has made the Meet vs Zoom debate almost obsolete, diversifying from enterprise video conferencing into all enterprise communication and more mammoth, all live video.
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