OAKLAND, California April 29 (Reuters) - Alphabet Inc’s Google on Wednesday said any user will soon be able to host free video conferences on Meet, turning its previously business-only tool into a bigger rival to Zoom and others battling for users during the coronavirus outbreak.
What a dramatic month to Zoom LOL.
Rick long ZM
I’ve been a Google Meet user for years through work. It’s very straightforward to use, and works quite well. I’ve been on calls with 50+ participants around the world.
My primary caution re: Zoom is that there is no moat around providing virtual meeting services. Anyone can step in with an offering at any time.
My primary caution re: Zoom is that there is no moat around providing virtual meeting services. Anyone can step in with an offering at any time.
That’s what concerns me also. I recall that Google had a cooperative application that allowed conferencing and a real-time “white board”. Don’t remember what it was called; I had no use for it. But clearly it can be done, and Google (and Microsoft and others) have really good coders. IMO, Zoom needs to be offering something that sets itself apart. And then it needs to stay one step (or more) ahead of potential competitors in those offerings. Because there just is no moat, and companies like Microsoft and Google have enormous customer bases already which provides an advantage when they roll out something new.
My company uses Microsoft Teams, and WebEx. They recently reiterated (via email to the entire company) that Zoom is prohibited on all company equipment due to security concerns. Based on what I’m reading on this board these issues are being addressed, so maybe our IT department is slow to get the news? But as of now they are still prohibited.
On the other hand, my doctor uses Zoom and it worked quite well.
“My primary caution re: Zoom is that there is no moat around providing virtual meeting services. Anyone can step in with an offering at any time.”
Exactly. There can be many players that rush into a market segment to leverage an opportunity. This has been shown to happen time and time again throughout history. The question becomes, what product, service or provider will be best in class? It most likely will not be one, but perhaps several.
There comes a time or tipping point where a brand becomes the product, service or provider. Fortunately for Zoom, the Covid Crisis has pushed them to the forefront of the video teleconferencing conversation and they have quickly and demonstrably become the brand for the service.
Others will be video teleconferencing services; but only one will be Zoom. Its what is commonly referred to in B-Schools as the “Rule of 3” (see link below). Will the three be: Zoom, Blue Jeans, Google Meet, Teams, GoToMeeting, LifeSize, FB Rooms, WebEx? I don’t know; nobody knows. But, it seems highly likely that when the dust settles, Zoom will be one of the final 3 and in my opinion the most dominant and recognizable of the 3.
https://iveybusinessjournal.com/publication/competitive-mark…
Devil’s advocate here.
-World Series.
Originally a series of baseball games sponsored by the World newspaper. We still call it the World Series, but the World is no longer published. Out of business.
I’m not saying that will happen to Zoom. I just am not seeing a competitive advantage or moat, and if other players are giving away that functionality (Google, Microsoft) that is a worry for shareholders. Or I would think it would be. Zoom needs to be enough better that they can charge for software that other people are giving away, or they become the next Netscape. Microsoft in particular is already in the business sphere (most PCs are Windows, loaded with the Edge browser and Teams and such).
What does Zoom offer to justify the price of their software? No one has to answer me, but every shareholder should be able to come up with an answer for themselves. If they can’t then they should be worried, IMHO.
"Zoom needs to be enough better that they can charge for software that other people are giving away
I can’t buy the argument that a service option is “better” because it is “free”. That equation works only if the competing service is “better” AND “free”.
“Microsoft in particular is already in the business sphere (most PCs are Windows, loaded with the Edge browser and Teams and such).”
Correct, and these behemoth video conferencing services, or subsets of them, have been in play since the day Eric Yuan left WebEx to start his own company. He has been pushing the rock up the hill since 2011 against competition from these behemoths.
I have no position in any company we are mentioning here, so I won’t argue with you. I think I raised questions that every shareholder should be able to answer for themselves. So far the answers posted on the board are “what competition?”. Which is fine. I don’t agree (except for Facebook; that’s a joke), but it’s fine.
I will quibble one thing:
That equation works only if the competing service is “better” AND “free”.
It only has to be as good and free. Not better. In fact, companies might even accept “not quite as good” if it’s free, or just cheaper. Never underestimate the bean counters.
Yuan may have been pushing that rock up hill since 2011, but if no one noticed until now then he was left alone. I recall reading an account that Bill Gates entered a meeting at Microsoft and said “we have a new enemy: Netscape”. Once you’ve been noticed you may have a target painted on your back. It didn’t turn out well for Netscape even when Microsoft was ordered by a court to make the “hooks” in their OS available so competitors could write software that worked as well with Windows and Microsoft could write.
My primary caution re: Zoom is that there is no moat
I’ve taken both sides of this argument. So you might say I’m ambivalent. Even though Zoom is very comprehensive, I agree that Zoom has little lasting technical advantage. Their primary customer target was (and I think still is) enterprise customers. Eric Juan worked for Cisco as a Webex engineer prior to starting Zoom. So far as I know, Webex had zero retail business. Their entire customer base was comprised of enterprise users. Only very recently has Webex tried to capture the retail user with a free product. I don’t know how the free product is constrained. Zoom limits a meeting to 40 minutes for the free version of the product.
Personally, I don’t think many users will switch from Zoom to Webex. Webex may take some new user seats that might have otherwise gone to Zoom. It appears that a lot of companies are now going after the individual video conference user (Facebook, Google, other). I think this product will be hard to monetize. Advertising in the virtual waiting room is the only thing I see as an opportunity. Given that making money with a video conferencing product is difficult at best I’m not too sure why there’s so much competition for the free user.
Zoom not only built a much better product that addressed all the problems and short-comings of Webex. In addition, Zoom is super simple to implement and use.
Zoom is also appears to be considerably cheaper than Webex (https://www.webex.com/pricing/index.html). I have never been involved in price negotiations for enterprise s/w, so I might have come to the wrong conclusion, but it appears to me that Webex pricing is quite complex and when you add up the separate pieces that are required, it looks pretty expensive to me. Look at this link to get an idea of how it breaks down for an actual enterprise user although discounts which are not uncommon for a large enterprise are not included in this example (https://www.vyopta.com/blog/business-collaboration/real-cost…). Skip to the bottom of the page for the CUSTOMER EXAMPLE.
Zoom has two business plan options. The cheaper one for smaller businesses it $15/mo/host with a minimum of 10 hosts. The one for larger businesses is $20/mo/host. They offer two plans at this rate, one with a minimum of 10 hosts, the other minimum is 100 hosts (https://zoom.us/pricing). That’s it. The customer does not have to separately buy a storage plan and an audio plan as is necessary for Webex.
So Zoom does have a moat of sorts. The have covered the waterfront with respect to the functionality required by the enterprise user. The have a simple and elegant user interface. The product works (most any Webex user can relate an experience where the product crashed or had problems during a conference session). Zoom pricing appears to be aggressively competitive (appearances can be deceptive, this is the way it looks to me).
And finally there’s inertia. The if-it-ain’t-broke-don’t-fix-it syndrome. All other things being equal, what would motivate a user, be it an individual or a business to switch? Ignore the security problems. They were overblown to begin with, some of them weren’t even real problems and can be easily addressed by changing some of the default settings. Further, Zoom has already released a revision that addresses the real problems (Zoom bombing is no longer a problem with the latest rev).
Like I said at the outset, I have taken a position on both sides of the moat issue. But if you want to gauge by where’s my money, I’m long Zoom. I exited the market in February due to concerns about the pandemic. I have since cautiously gotten back in with a portion of my funds. Zoom is one of my holdings in my scaled back portfolio.