Interesting article.

Investment Analysis Clubs Saul’s Investing Discussions
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https://www.cnbc.com/2020/02/08/twitter-ceo-jack-dorsey-san-……

Article about how CEOs are starting to move out of the Bay Area and Silicon Valley.

What’s very interesting is that it’s technology itself that is allowing tech firms to move away from the cut throat competitive area where rents and salaries are at all time highs and where employees are constantly poached by bigger firms.

All about the cloud and faster internet speeds that is allowing a company to have employees anywhere in the world. Think AYX, ZM, COUP, MDB, and the like.

Personally I think it’s time to move ZM up to a top three position in my cloud portfolio.

TMB

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The link doesn’t work. My guess is that the text processing software of our board cut the length but the target website can’t recognize the result.

However, you can get to that story by entering exactly this phrase into your search engine:

cnbc twitter-ceo-jack-dorsey-san-francisco

Tech companies have been expanding to other places for a long time for exactly those reasons. Find a place that would appeal to your hi-tech employees, but not be overcrowded with competition for their talent. Build a place there, entice some folks to move and give the new building(s) a product line to own. And it is becoming easier with broadband communications being so cheap and available.

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You can’t copy another TMF post with a link. The link is cut short by TMF in your first post that you copied, so you have to copy the full link again.

Here’s your article.
https://www.cnbc.com/2020/02/08/twitter-ceo-jack-dorsey-san-…

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" Personally I think it’s time to move ZM up to a top three position in my cloud portfolio. "

The thesis of your post is that Zoom will prosper because

1: High tech employers are spreading out physically, creating new demand for cross-site collaboration tools.
2: High-tech employers want live video between sites and will pay Zoom to get it

That makes sense, but only in cases where the need for great video conferencing exceeds the “good enough” teleconferencing video that already comes with the Microsoft Office 365 product line.

The high-tech employers have Microsoft Office already. Microsoft owns Skype for Business and Teams. Both are designed for cross-site collaboration with secure sharing of documents. I use Skype for Business all the time for engineering meetings. It is excellent for document sharing, desktop sharing, and audio conferencing. It does everything I need done to collaborate with my coworkers across the cube wall and across the country. I click the meeting notice, put on the headset and I am there. I can just click “share desktop” and choose to share my desktop or a selected document with all of the participants. I can share what I want and see what they share. Cross site collaboration works very well.

We are rolling out Teams in our department. We want cross-site employees working on the same project to communicate and share work between themselves. Project members apply for membership in the “team”. Then we exchange messages within the Team app that all can see, and can share documents that all can see. It’s like an ongoing family conversation with record-keeping. Teams has video (I haven’t used it yet, but others do). Teams video would have to be terrible for a full-up Microsoft customer to spend more to buy separate video. Most of those high-tech employers already have Microsoft for their document needs. All the tools work together in the same way, and are designed for collaboration.

My employer used other products for face to face video conferencing between conference rooms full of people and a few working from home. Between conference rooms at multiple sites, it works pretty well. When I hook in from my home office, so-so at best. The current product is Webex. I am sure Zoom is better. If Webex costs extra from Cisco over what we pay them now for other services, or management feels the so-so quality is no longer “good enough” Zoom may have an in.

Zoom has room to grow when great video on demand is the most important feature. I don’t know if the high tech companies who already have Microsoft products will be that growth. Not unless the Microsoft products can’t be made to work. Other kinds of companies will need the best video and more often.

Trusted Reviews have lots of feedback from users of both products.

Disclaimer: I hold shares in both MSFT and ZM. I think both will prosper.

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Some anecdotal comments.

I work at a very large international financial firm. Over the past few years, travel budgets have been decreased significantly especially for internal meetings and conferences. Physical travel is limited, and telepresence (TP) conferences and meetings are strongly encouraged. People are being moved (or added) in low cost geographical centers. So, less in person meetings in finance hubs (e.g., NY) where senior management may be located, and more telepresence calls. Old phone system transitioned to Cisco Telpresence phones (internal calls all have video via the phone). Numerous TP conference and meeting rooms added. Firm uses SeeMe video for meetings. This is functional over the Cisco Phones or via Jabber app on desktop (which is Virtual) or smartphones. Heavy (and senior) users get individual full screen displays solely for telepresence calls.

The Cisco phone display is relatively small and average quality at best. It is automatic and doesn’t fail though. When you add more than a few people to a conference call or meeting, the clarity decreases, and its only real function is to see if people are multi-tasking or not.

The TP rooms are decent quality. SeeMe is okay and functions (most of the time). Big calls are still audio only. Last week, I dialed into my first Zoom video call (with a large group dialing in. I didn’t really get to explore any functions. It worked fine, but I wasn’t blown away by the video quality or anything. (Note, video was facing the speakers who were in front of a large window into the sun).

Overstating the obvious, it is certain that telepresence and video conferencing will be the standard (if it isn’t already) going forward across all business enterprises. The question is who captures this market and dominates. Anther obvious point, the person setting up the call picks the service.

I’m long ZM because of the market potential. Cisco/SeeMe/Jabber works okay. ZM seems to be growing and taking market share, but I personally haven’t used it until just last week.

Mike

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32% of Okta’s Office 365 users also use zoom as of 2019 year end. Up from 8% in 2016.

Both zoom and slack are prospering in the Teams era, but zoom moreso.

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Skype for Business goes obsolete in July 2021.

It makes me wonder then what will happen to these users on Skype.

According to a poll I read from 2018, 28% of IT workers were on Skype vs 21% for WebEx.

So these companies with these Skype users will be forced by Microsoft to switch to Teams July 2021.

At that point, I am not sure if you use Skype and Slack or Zoom, or all 3, what happens when they now have Teams and Slack and/or Zoom. It seems at that point the products become redundant and one or more may be cut. I only use Skype for chat at work. It’s no substitute for Teams, Webex, or Zoom. Suddenly when companies have all in one Teams some of these other services may go away.

What I’m getting at is concern three will be a big push to users to Teams in July 2021 and at that point it may affect competitors due to new competition.

I have read that Microsoft has already been pushing smaller firms to Teams. So far that hasn’t had an impact on Zoom.
But not sure where they are st on that auto-upgrading.

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Microsoft is also pushing larger firms to Teams. We (my organization is a Fortune 50 company) are moving from Skype to Teams (and I want the move to be faster, as I have to have both open on my desktop currently). We are a large (>100,000 seats) O365 customer.

Teams has been integrated into our Polycomm VC units (Teams meetings will display on the VC unit, if the meeting room has been invited to the meeting, so it is just selecting an item versus having to dial-in).

I’m sure this could be done with Zoom as well, but it is not a technology I have seen with the organizations I interact with at work (primarily top 10 consulting / outsourcing firms - I work in IT). I have used Zoom in non-work settings.

I do believe both Teams and Zoom will survive. As an organization we “played” with Cisco Telepresence a few years ago (a handful of Telepresence rooms globally). As they seemed to be “restricted” to the very senior management, they never got a lot of traction and have disappeared - I used them more when I was with Accenture 10+ years ago). My current organization still has a lot of Cisco phone gear.

David
Long Zoom and Microsoft (I like the Azure story).

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Fwiw- I work at a large company in the semiconductor industry (>30k employees). We were previously using Skype for business for all meetings/chat.

The CIO sent out a message that in early 2020 the entire company would be shifting to Zoom for video/meetings and Teams for file sharing and chat.(the shift has not happened yet so I can’t talk to the advantages of Zoom/Teams.

Long ZM
bnh

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That’s possible then that as Skype goes away it makes firms look around for other options aside from Teams then and could wind up being a wash in the long run.

Some companies going from Skype/Zoom/Slack to all teams,

Others going from just Skype to Zoom/Teams/Slack or mo Teams at all.

One thing for sure though the adaption rate for Zoom is extremely impressive even as this Skype End Of Life happens now so probably no concern.

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It is obvious, Zoom is a winning business. Teams, for Microsoft is a winning business. They both win. Zoom is the best in category, and many who adopt Teams, nevertheless, still pay for Zoom. Better recommendation is hard to find.

Thus, what matters with Zoom is, when is a good time to buy it? Valuations can fluctuate wildly. If Zoom had gone public when Shopify did, the opportunity would have been much greater. To me that is the only question.

Zoom is a winner. Now is it a winner stock at the current valuation? Depends on your time frame, buy in points, and patience or lack thereof and when you sell.

Thus, the relevant discussion for Zoom is different than it is for many of the other companies we follow here.

Tinker

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Breaker Tinker you have posed the key question. I am long ZM at 4% and seeking to add but discouraged by the run up. On the other hand it is one third off its 52 week high. On the other hand the high seemed way too high, and so it goes.

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The other key question with ZM is their strong growth is indicative of a clear moat advantage or whether it is more a temporary “fad” in which it appeals to certain clients, but, when more is known, someone else will turn out to offer a better option. Thus far, the personal testimony we have had here has been far from reassuring.

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