- Boom of video-conferencing apps amidst Covid-19
- Zoom- the leader
- Controversies surround Zoom, can the app maintain its leading position
In today’s times of lockdown, when social distancing has been called for by governments globally, the only mode of communication is via technology- resulting in a significant uptick in the use of video-conferencing apps. There are several video conferencing apps available in the market today including Google duo, WhatsApp, Global Meeting, Zoom Video, WebEx, which are being extensively used for video calling by people for both work and pleasure. People are resorting to these apps to facilitate their working from home, to keep up with friends and colleagues, conducting online classes for students, conducting group yoga and dance sessions, to building digital clubs while a few have even employed such apps to host weddings!
Zoom Video, however, stands out from its peers, with the app becoming one of the most popular video-conferencing players in a scenario wherein several companies globally are looking for ways to maintain communication as their employees transition to a work-from-home model. The apps main selling point, without a doubt, is its free 40 minutes conference call feature which can be joined in by up to 100 attendees. Its ease of access and user-friendly interface has encouraged a large number of users to flock to the app. Other than this, the app also offers certain more distinctive features like HD video conferencing, ability to record meetings, as well as allowing high quality videos to be shared during a call. The Company has reached a new high during the pandemic and has clearly come out as a leader in this space. The services of Zoom Video are widely used for conducting online classes for students, facilitating Work-from-home for corporates, holding video conferencing & for personal uses by individuals. In March 2020, the company stated that the usage of Zoom ballooned overnight, including over 90,000 schools signing up across 20 countries to continue education remotely. As per the recent announcement the app had more than 200 million daily active users in March, up from total of 10 million in December last year.
The Company was founded by Eric Yuan, the then vice president engineering at Cisco WebEx in 2011 and launched its software in 2013. Zoom Video grew at a very fast pace from its inception itself, the company was valued at US$ 1 billion in 2017 and went public in April 2019. Zoom offers varied products like Zoom Meetings, Zoom Phone, Zoom Chat, Zoom Rooms, Zoom Conference Room Connector, Zoom Video Webinars, Zoom for Developers, and Zoom App Marketplace. Currently, Zoom operates in two mediums: free and paid services. In the free plan, up to 100 members can participate in one video conference but with the fixed time limit of 40 minutes. Hence for organizing a large or no time bound conference the participant must avail the paid plan. Currently, plans vary from $15-20 per month. For larger organizations, the company provides a plan called Zoom Rooms which generally cost from $50-100 per month to cater to curated requirement of such organizations.
Zoom’s revenue over the years has shown an increasing trend. The company’s topline has grown at a CAGR of 118% between Jan 2017 and Jan 2020. The revenue grew by c. 88% in between Jan 2019-2020. This was mainly due to increase in subscription services provided to existing customers coupled with the hike in number of customers contributing more than $100,000 which rose from 344 in Jan 2019 to 641 in Jan 2020. As per the market intelligence firm SensorTower: first-time download of Zoom’s mobile app has skyrocketed 728% since March 2, 2020, primarily driven by the lockdown that the entire world is currently experiencing. According to reports of April 8 closing, Zoom Video is now valued more than the combined market capital of American Airlines, Expedia and Hilton. The Company had a market cap of $31.73 billion, while the combined value of Hilton ($18.26 billion), American Airlines ($7.91 billion) and Expedia ($ 4.35 billion) stood at $30.52 billion. In comparison, Zoom has doubled over this same time period.
The company witnessed a large increase in the number of free users, meeting minutes, and new video use cases. Its customer base including Companies employing more than 10 employees has risen to 81,900 firms which is an increase of 61% from the last year.
While Zoom has found massive success during a rather dark time for the world, it has been marred by several controversies with loopholes coming to fore every other day. While the Company is engaged in fixing these, it is safe to say that Zoom’s status as a frontrunner does not seem threatened as of now, although maintaining its position will eventually need it to prioritize user security and privacy over just ease of use. On the other hand, given several security vulnerabilities coming to fore, customers may eventually move away from the free trial over a period of time. For now, however, there is no data to suggest the same. Meanwhile, its competitors are making moves to catch up and it will be interesting to see if Zoom is able to maintain its position as a leader by putting all of the security concerns at rest. Nonetheless, companies in this space are set to benefit as the world transitions to online form of communication and meetings in comparison to legacy methods, perhaps even after the lockdown ends.