“At some point in time, the difference is not that much for somebody to choose one or the other,” he said. In Zoom’s core video space, companies from Google to Microsoft and Cisco, have all improved their video conferencing technology. “You can argue whether there is parity or not, but it is coming up,'' said Nagraj Kashyap, who was head of Qualcomm Ventures when the firm invested in Zoom and is now a managing partner at SoftBank’s Vision Fund. Zoom’s platform vision is also under serious threat from competitors who can offer video capabilities alongside broader and more robust collaboration products. “Five9 is on a roll right now and that would have enabled Zoom to strengthen its portfolio and provide more of a platform approach to their clients,” said Steven Dickens, a senior analyst at Futurum Research. To many, the failed Five9 acquisition was a major miss. Five9 shareholders felt the purchase price was undervaluing the company and subsequently rejected the $14.7 billion deal, forcing Zoom back to the drawing board. Zoom announced its all-stock offer for Five9 in July of 2021, but by the time the deal was supposed to close, Zoom’s stock price had plummeted almost 30%. Not long after the company announced its plan to expand into the contact center space, its acquisition of cloud-based contact center company Five9 fell through. But Zoom has had a number of setbacks along the way. The natural approach would be by expanding into new markets and products, which explains Zoom’s vision for becoming a platform player. 2, if that's the case, how do they grow from here?” asked Jaluria. 1, did they just pull forward all of their, and No. While the number of customers more than quadrupled, the company also seemed to have captured its entire target market - a concern investors have held for a while. In many ways Zoom’s explosive growth during the pandemic may have been its Achilles’ heel. I think people were expecting growth to be 30%, not mid-teens,” said Rishi Jaluria, managing director at RBC Capital Markets. “I think what is a surprise to investors, and this is reflected in the stock price, is how quickly things slowed down and how dramatically. That sort of late-pandemic shock was expected to some extent, but not in such a drastic manner. And last quarter, year-over-year revenue was up only 12%. While still healthy compared to Zoom’s enterprise-tech peers, it was a far cry from the heyday of the pandemic. As the pandemic began to ease and workers returned to the office, Zoom’s growth began to slow more than expected by investors who maybe should have known better, and the stock price began to reflect that.įrom the fourth quarter of fiscal year 2021 to 2022, revenue growth slowed to 21% year-over-year. Later that year it also announced plans for its Contact Center (called Video Engagement Center at the time) and Whiteboard products, amongst others.īut the party was drawing to a close. At that point Zoom already had its fast-growing Phone product, and in July of that year would go on to launch Apps and Events. “We’re not only a video conferencing company anymore,” Yuan told investors during an earnings call in March of 2021. Between the fourth quarter of fiscal year 20, Zoom’s customer base grew a blistering 470% to more than 460,000 customers, while revenue grew at a staggering 369% year-over-year to $882 million for the quarter.īolstered by sky-high growth during the pandemic, CEO Eric Yuan set out to turn Zoom into a major platform player by expanding beyond its core video product. The technical edge Zoom had in its video technology, its cloud-native architecture and a savvy marketing strategy enabled the company to accelerate past its competitors, according to company followers who spoke with Protocol. When the pandemic hit in early 2020, suddenly consumers and enterprises everywhere were faced with the challenges of communicating with friends, customers and investors remotely. But the real growth was still yet to come. Zoom’s 2019 IPO, in which the company raised more than $350 million and saw its market value soar to $16 billion, was a blockbuster. From enterprise phone system Zoom Phone to Zoom Contact Center and hybrid event platform Zoom Events, the company is aiming to become a one-stop destination for all things communications and collaboration. In response, Zoom has been doubling down on its platform vision by launching an array of products and new features. The question facing Zoom now is, what’s next? Acquisition options that were once available thanks to its high-flying stock price are gone, and powerful enterprise platforms like Microsoft and Salesforce are taking direct aim at its core video service.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |