For most tech products, time, chance and luck have always played a role. The intersection of necessity and expediency have a way of favouring the agile businesses.
So is Zoom’s interesting rise to massive adoption. Built primarily for Enterprise users, the twists and uncertainties brought by the Covid-19 pandemic has changed its uses. People have creatively found other uses for it to the extent of holding church services, yoga classes and breaking up relationships with it. This is symptomatic with every great product. At some point, Uber became a taxi, ambulance service, a food delivery medium and a meeting venue in plave of a fancy restaurant venue. We expect a deeper exploration of Zoom as usage numbers rise.
A Hard-earned Growth.
For the management and shareholders, there never could have been a better time to be part of Zoom. From a growing business with a maximum number of 10m daily meeting participants in December 2019 to over 200m in March 2020, that’s a 20x growth in three months. Thanks to the unforseen Covid-19 outbreak that changed the nature of most jobs. The idea of Work From Home has never been as enticing in the first quarter of 2020. Zoom has come to be a companion in this abrupt change. Its share price has surged from $73 a share in January to $128.8 a share at the end of March 2020
Growth Beyond Luck
But Zoom did not arrive here by accident. Rather, here is a product that looked at the deficiences in the market and made them a part of its offerings. With Zoom, you do not necessarily need to download an app or use the platform’s product like Windows as seen with Skype. An intending user of Google Hangout or Meet for example will need a Gmail account to gain access to any of Google products. But for Zoom, you just follow a link and you’re good to go. With data privacy being a major concern to users, this feature reduces the problem to the minimum.
Zoom basically flowed with the on-demand trend in the economy. The on-demand economy externalises ownership and inherent risks with it. App downloads and regular updates are forms of ownership too. But with a Zoom link, you could hop on a meeting with a stranger without exchanging email at a short notice with just an internet-ready phone.
Perhaps, an overlooked factor to Zoom’s massive adoption is its network effect . You need a fellow zoom user to use the application. With its ease of use; introduction, referral and adoption become second nature.
In a period where attention span is so short especially during meetings, Zoom made it possible to record your meetings. With this, missed-out details can be revisited with deserved attention and the problem associated with record keeping in official communication is eliminated. Zoom with this feature saves organisations and persons the problem of miscommunication especially in unwritten and verbal interactions.
In video calls and photo capture, background enhances quality of object. Some homes and home offices may have ‘noisy’ background thereby distracting the person(s) at the other end. Again, Zoom saw this gap and filled it with its virtual background which could be a location, a heritage site and so on. This saves embarrassment and distractions.
A Full Plate of Threats
Despite a rise in its fortune and mass adoption, Zoom would have to fight off a lineup of competition which includes Skype owned by Microsoft Corporation and ably run by Satya Nadella and Cisco Webex. Of course, Facebook and Google have joined the ‘Video Conferencing’ race.
Despite Microsoft’s acquisition of Skype for $8.5b same year Zoom was founded, a few missteps along the way have caused the giant to wobble in this aspect . There has also been the question about sustaining this upward trajectory during and after the Covid-19 pandemic blows over.
But why should Zoom and its leaders be on the lookout for Microsoft (Skype) despite blowing an early lead? There are quite a handful of reasons. One is leadership. Microsoft is led by a man that understands turnaround acts in tech. One expects that when the experiment with MicrosoftTeams ends, he would give Zoom the much-deserved attention. Nadella has proven his mettle with Microsoft’s Cloud business accounting for 20% of total revenue and beating Amazon to win the Pentagon’s contract.
Following that is the fact that this is not the first time Microsoft has fought off and won a battle. Netscape readily comes to mind. Despite the near monopoly enjoyed by Google with its search engine, Bing still remains a profitable option. With a deep pocket, talent pool and institutional memory, Microsoft still stands a chance to turn this around as it is currently doing with the Surface Pro.
Zoom at the moment enjoys a huge dose of goodwill worldwide. But goodwill can be fickle. And not a substitute for a bad product. It is good that Zoom has now suspended work on features to focus on security and encryption. With an unprecedented traffic and pressure on its servers, data security becomes an ongoing concern.
With its growth has come the concern over its data encryption which it has tried to clarify. At some point, Zoom would have constant run-ins with regulators both in China and the US. Regulators on both sides would need a guarantee on its citizens’ data privacy as its users grow. This is time for anticipatory engagement with policymakers in the US, China and EU.
The ability to use the service with just a link has been a deft move for Zoom. However, it needs to find larger sources of distribution beyond links and apps. What distribution platform does is provide an easy beachhead to launch a product, a new feature on a product or fight off competition faster and easily . Microsoft has Windows, Apple has the iPhone. Zoom could consider reaching out to phone makers especially in the MEA regions on a preinstallation deal of lite versions of the app due to the expense data prices over here. It could also outrightly make a lite version even without a preinstallation deal as the demand for gig and tech jobs grow there.
This is imperative as Google and Facebook want a piece of the action. They may use tools within reach like the Search Engine, PlayStore and Chrome browser to make their in-house apps a priority. Google for example has banned its employees from using the Zoom application on their work laptops. This is expected to be copied across completing firms and their affiliates in the coming months.
For Zoom, the battle to dethrone it has taken off and how it ends depends on it and the users.