In 2019, Zoom was primarily a video meeting company that focused largely on consumers and small businesses. That year, Zoom did $331M in revenue. The pandemic caused the use of Zoom to explode and it became integrated into our personal and professional lives.
Since then, Zoom has added several new products including Phone, Contact Center, Events, and significantly beefed-up Chat. As its product line has grown, so has its revenue as it is now a $4B company, expected to hit just under $5B in 2023.
As mentioned above, the shift to work from home turbo charged Zoom’s growth and there are many questions about how the “Meet Happy” company will transition to “Hybrid Work Happy.”
This is one of the reasons why I’ve been waiting for Zoomtopia 22. Businesses are struggling with hybrid work and look to companies like Zoom to help make the transition easier. There have been industry rumblings that the company was planning a major announcement at Zoomtopia 22. I asked Zoom’s Joseph Chong about it on this ZKast preview and while Chong did not share what the news was, he did confirm one was coming.
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Zoom Jumps into E-mail and Calendar
While there was plenty of product news at Zoomtopia, the most significant announcement is Zoom moving into e-mail and calendar.
This certainly seems like a bold move as e-mail and calendar are mature markets with Microsoft as the dominant vendor and Google providing a strong number two. Zoom obviously realizes this and has taken a dual-pronged approach to its strategy. Zoom app users will see e-mail and calendar icons in the client and that will connect them to Microsoft 365 or Google services. This enables users to access e-mail and calendar without having to flip between the different applications.
On a pre-brief with analysts, Cari Dick, PMM for Zoom Platform, mentioned a Harvard Business Review study that found employees spent four hours a week reorienting themselves after toggling between applications. My research has a similar data point, finding that users spend about 40% of their time managing work, much of which has to do with the constant context switching and management of multiple collaboration tools. Zoom’s integration enables workers to stay in Zoom to access mail and calendar, streamlining work.
The second aspect to this announcement is Zoom’s own hosted Mail and Calendar services, which will be fully integrated into the Zoom app. It’s fair to be skeptical of this move because, even if businesses wanted to move off Microsoft and Google, it’s very difficult because of the historical data.
If a customer chose to adopt Zoom Mail and Calendar, they would likely have to run it in parallel with their existing system as there is no way of moving old emails from Exchange or G-Mail to any other client. This is why e-mail is such as sticky app and has allowed Microsoft to sell subpar products, like Teams, via a bundling approach.
Zoom Mail: Limited Appeal But Has Potential
There are use cases where Zoom could be successful. Zoom e-mails are encrypted from end-to-end so businesses that handle sensitive data could augment their current e-mail strategy with Zoom. That is, use their current platform for general messages and then use Zoom for e-mails that require the utmost in privacy. Law firms, doctors’ offices and banks would be a good example.
With Zoom Calendar, users have access to an integrated experience that enables them to schedule meetings and access recordings and shared links. There is also an appointment booking feature to help coordinate schedules around available times. With disparate platforms, having to look at everyone’s calendar to find an open time for all meeting participants can be a laborious and painstaking process.
Looking ahead, I do think there is some room for Zoom to disrupt e-mail and calendar. All meeting tools do a good job of the actual meeting. That is, we join and have the meeting and hang up. Where we often fail is the pre- and post-meeting tasks.
Zoom has addressed some aspects of this with recordings and transcriptions but there is much more to do. Often before or after a meeting, e-mails are sent out with the minutes or follow up actions. Workers need to manually connect messages to meetings. Also, users will often send a chat and then a follow-up email, making it difficult to remember where certain content is. If Zoom could create a single, integrated experience that spans the entire meeting lifecycle, it could disrupt the incumbents.
Zoom e-mail and calendar will be available as a private beta starting November 8th, 2022.
Zoom Platform Updates
Zoom Spots are ad hoc, virtual co-working spaces that allow people to get together organically. Think of this is a video enabled, business-class version of Clubhouse. I was never a fan of Clubhouse as an audio-only consumer level meeting place, but I do think Zoom’s attempt to create virtual “water cooler discussions” can help create foster office relationships in a hybrid work environment.
Zoom Meeting Enhancements includes Smart Recordings, which divides long meetings into smaller chapters, creates a summary and provides next steps and highlights. Transcriptions are nice but require a long of manual effort to make them actionable. There are also new templates and avatars for better customization and personalization. Also, Video Clips for asynchronous communications lets people use video offline.
Zoom Spaces Updates to improve in the office meeting experience: new Workspace Reservation Smart Suggestions helps users decide where to sit and what days to come into the office based on co-workers and other factors. Intelligent Director uses multiple cameras and AI to create the best view of a speaker and then adjusts as the speaker moves. Companion Whiteboard pairs with Zoom Rooms to add whiteboard and annotation capabilities.
Zoom Event improvements include optimization with Zoom Mesh, the company’s own eCDN. There are also several new ways to engage or present content, including simulive to make recorded webinars engaging, and improved branding and breakout rooms.
New Zoom Contact Center Capabilities
Zoom Virtual Agent (ZVA) is a conversational AI chatbot based on the acquisition of Solvvy. ZVA learns directly from knowledge bases and FAQs and uses natural language processing to understand and converse with customers without requiring a human agent.
If used correctly, virtual agents can offload mundane, repetitive calls from agents, enabling them to handle more complex issues while giving customers a faster channel to solve problems. ZVA is available as an add-on to Zoom Contact Center or a standalone offering. It can also be integrated into Zendesk, ServiceNow, Shopify and other CRM and e-commerce platforms.
Third Party Integrations
Zoom also announced several integrations with third parties. With Palo Alto Networks, Zoom will share data with them for network monitoring purposes. This enables IT admins to quickly isolate and resolve service disruptions and decrease tickets and service calls.
With AWS, developers will be able to capture screen video and audio from a hosted Zoom client and then build on top of that using AWS tools such as AI / ML, analytic services, or transcription. It’s a cost-effective approach that reduces development friction and offers more capabilities to Zoom’s enterprise customers. The intention is that this will ultimately be available as an open-source project on GitHub.
Zoom is also introducing application monetization in their marketplace. Coming in Q1 of FY24, developers and ISVs can create apps that are built on Zoom and can be downloaded from a Zoom store. App providers can choose from a variety of revenue models, including usage based, flat fee or monthly to create flexibility for themselves and customers. Zoom will be trying this out with a small batch of developers over the next few months and then expanding. This is a critical step in Zoom becoming a true platform as it enables other business to create value on Zoom which then results in a low cost, pull through sales model.
Earlier this year, at an industry analyst event, Zoom CFO Kelly Steckelberg commented that the company aspires to become a $10B company. There are very few SaaS companies that have accomplished this. Zoom is unique in communications in that it has strong end user appeal and that is certainly a strength to build on.
All the new products and features from Zoomtopia 2022 are designed to integrate Zoom more tightly into our business processes and increasing the breadth and depth of usage, giving Zoom a good shot at becoming the next $10B company.