Hi Saul, it is perhaps worth noting that 18% of their revenues comes from these customers, as mentioned on the call yesterday. Zoom is still very much a mom and pop and small to medium size customer business.
from call yesterday.
Tom McCallum
Hi, this is Tom. Just wanted to point out on the last question that James asked, it is 18% coming from the greater than 100k.
in regards to productivity from home vs in the office. My company is in aerospace and we have found that keeping the essential workers in the plant (integration, test, etc), while keeping the rest of us home (engineering, support, etc) has worked really well. Productivity dipped at first as we all adjusted to WFH, but we quickly recovered and productivity is very close, or even better, than when we were in the office full time.
as a manager, I have seen productivity increase - people are working longer - they are spending the time they would have spent commuting on producing work. I have had some team members find it very easy to take an hour off for dinner, then jump back on to finish a task that would have waited til the next day.
of course, I have had a few the other way, but that is my job - to work with them and reduce the downside.
can we sustain it? I think so, though some people really miss the personal touch and being around the team. we are looking at ways to mitigate this.
as for ZM: We dont use it, but have a few corporate accounts that are for big meetings. i am hoping and trying to get them to get more licenses, as Skype is just not working very well for us. not good sound quality, frequently dropped attendees (happened to me yesterday right before I had to do a presentation), etc. We shall see.
Zoom is about 5% position for me (which is a large position for me, I am still learning this new approach), and I plan on holding it for now. I like where they are going, and may add on the dips.
dave
Hi Saul, it is perhaps worth noting that 18% of their revenues comes from these customers, as mentioned on the call yesterday. Zoom is still very much a mom and pop and small to medium size customer business.
from call yesterday.
Tom McCallum
Hi, this is Tom. Just wanted to point out on the last question that James asked, it is 18% coming from the greater than 100k.
Relatively low penetration in corporate customers exactly is one of the big business opportunities and growth drivers moving into the future in my eyes.
Hi Dave and others that see WFH has good productivity right now.
Most departments, entire teams and companies are WFH. What happens when 100% changes to 30-60% of those teams and meetings are with remote employees. How will we manage the split of who is on site and attending virtually? The type of interaction is very different going forward…
I think worker productivity will be the deciding factor.
I don’t think it’s as simple as that. Some people will work as well or better at home while others need closer supervision. Some people will have distractions at home, other less or none. Saving on commute time might improve productivity. In my first job they didn’t care how many hours I worked but the results I got. Other jobs might be more time dependent. I had one customer who wanted me to work outside business hours and the only way I would do that was from home. This was 25 years ago! I connected with his computers via telephone modems! As WFH takes root, hiring practices will follow suit and the makeup of the staff will likely vary.
In complex systems they use the concept of the fitness landscape, think of it like a moonscape where everyone is trying to scale peaks. Funny things happen, if you reach the top of a low peak the only way to go higher is to go lower to find a higher peak. As players compete they change the landscape, your 19th century smarts might not be useful in the 20th century. It’s said the Charlie Chaplin never made it in the talkies and he envied actors who could speak. It is complex!
I just don’t think there is a simple connect the dots method of determining the future. As the saying goes YMMV! 
Denny Schlesinger
Hi Dave and others that see WFH has good productivity right now.
Most departments, entire teams and companies are WFH. What happens when 100% changes to 30-60% of those teams and meetings are with remote employees. How will we manage the split of who is on site and attending virtually? The type of interaction is very different going forward…
we already do that, and for the most part it works well. there are times when we have to have people move closer to the microphone, but we have a blend already (note, we were used to this already when we would send people out to remote locations for launches).
Some of us will adapt and work with it, there will be old school people that like to have everyone there, but even my upper management is warming to having more remote people than before, and as the younger managers move up, I suspect they will be even more open to it.
then again, I could be wrong, this is just one instance and I am notoriously bad at predicting the future (my wife will tell you I am definitely not good at that, and she is right)
- education (universities, schools) will go back to in-person teaching mostly
This is true is some cases.
I’d like to highlight something a friend of mine recently told me about. He’s a professor at a major university and is basically head of committee for Covid planning for the learning.
Zoom is permanent. Every aspect of teaching at the university is geared towards production through video. They have hired several former movie and show producers and effects specialist and when a professor gives a lecture effects and charts and graphs, whatever they need for the moment pop up.
The live lectures have students and a professor and is cast to thousands more via distance learning. The live students see the production version in hall rather than really watching the professor.
Their university has insane numbers of distance learning this year (and an at capacity campus) providing the University with an unimaginable global reach and a cascade of tuition revenue. They had a distance learning program before but nothing like this.
Many companies/industries learned to cope by integrating video into daily activities. Many more learned to thrive with the tools they hadn’t considered before and aren’t going anywhere.
Darth
Most departments, entire teams and companies are WFH. What happens when 100% changes to 30-60% of those teams and meetings are with remote employees. How will we manage the split of who is on site and attending virtually? The type of interaction is very different going forward.
Even before covid, when my employer switched to Zoom, people tended to dial in to meetings from their desk. So we’d have a mix of people dialing in from home, from their desks, and sometimes a few from a meeting room.
I even used to conduct Agile stand-ups via Zoom. For a 15-minute standup you don’t want people to be late and it’s easy just to instant message them a reminder.
Another problem in some companies is the lack of large meeting rooms with VC screens. Dialing in from your desk solves this.
Zoom just makes meetings so much easier.
Relatively low penetration in corporate customers exactly is one of the big business opportunities and growth drivers moving into the future in my eyes.
Zoom will have to be a big enough improvement over Teams’ “good enough” experience to motivate the corporations to switch.
My employer (large multinational tech) uses Office and Microsoft cloud services now. Our video meetings have been Teams, Skype and Webex. Webex seems to be on its way out. The video and audio meetings are almost all on Teams now. We still use Skype for “hey, quick question” text and audio chats. Teams is integrated with Microsoft’s cloud based Sharepoint (place to store documents and videos that your whole team uses) and we have evolved our meetings to take advantage.
Teams isn’t perfect, but it is usually good enough. Not necessarily real intuitive to use, but once you learn where things are, it works. When everyone else uses it, a new user is motivated to learn. We already used Office and Microsoft’s cloud services when we rolled out Teams. It integrates well enough.
Zoom would have to be THAT much better, and competitively priced, to get the company to change. Many of our people use Zoom off hours for family connections, churches, etc.
I agree with the post above. What folks don’t realize here is that Teams is free for those companies that subscribe to Office 365 (which is pretty much every company). We recently held a call with 130 participants on Teams and it was flawless. There is literally zero incentive for our company to switch to Zoom and pay a monthly subscription.
I am slowly unloading my Zoom stock because:
For some reason I no longer feel comfortable to hold a significant stake in Zoom. I don’t have this feeling with DDOG, CRWD, OKTA, COUP, DOCU and other stocks discussed here…
Rubenslash,
Can one use teams on an iPhone (or other smart phone) or tablet?
Thanks
Gordon
@Etagordon: Yes, they have an app. I have been using this to dial in.
Yes. I use the teams app on my devices daily.
Can one use teams on an iPhone (or other smart phone) or tablet?
There is a Teams app in the Apple “App Store”. So the answer is yes.
What folks don’t realize here is that Teams is free for those companies that subscribe to Office 365 (which is pretty much every company). We recently held a call with 130 participants on Teams and it was flawless. There is literally zero incentive for our company to switch to Zoom and pay a monthly subscription.
Teams has always been free correct? How did Zoom ever get any business?
Just because your company has no incentive to switch does not mean other companies do not either. Also, Zoom does not need to have every company in the world as a customer to be successful.
Brian
I posted below few days ago:
https://discussion.fool.com/ibuildthings-upon-further-digging-i-…
In fact, my company uses Teams for internal ad hoc collaboration (mostly by IT and Finance), Webex for internal and external scheduled meetings and zoom for patient virtual visits and student virtual classes. We are healthcare, research and educational institute. Teams appears to work well but multiple tools are common within enterprise customers and ours is one such example. We likely are going to get rid of webex in 2021 and have Teams for all except student and Patient population (where Zoom is preferred choice, free won’t cut the deal here. Ease of use trumps in this case).
Thanks,
-Raj
ibuildthings,
Zoom will have to be a big enough improvement over Teams’ “good enough” experience to motivate the corporations to switch.
My employer (large multinational tech) uses Office and Microsoft cloud services now. Our video meetings have been Teams, Skype and Webex. Webex seems to be on its way out. The video and audio meetings are almost all on Teams now. We still use Skype for “hey, quick question” text and audio chats. Teams is integrated with Microsoft’s cloud based Sharepoint (place to store documents and videos that your whole team uses) and we have evolved our meetings to take advantage.
Teams isn’t perfect, but it is usually good enough. Not necessarily real intuitive to use, but once you learn where things are, it works. When everyone else uses it, a new user is motivated to learn. We already used Office and Microsoft’s cloud services when we rolled out Teams. It integrates well enough.
Zoom would have to be THAT much better, and competitively priced, to get the company to change. Many of our people use Zoom off hours for family connections, churches, etc.
This is true, at my small business which has less than 100 people we don’t need the ability to hold 200 people conferences, Teams is free with Office 365. I believe most businesses don’t need that ability as well.
Schools and government may not need an entire office 365 package and because ZM is sold
“à la carte” it is a prudent purchase without ‘extras’.
Looking at their spend sequentially and where R&D is flat does stick out, investments should be made now for the next several years. As per Conf. call they would like R&D to be higher, so I’m wondering what are they waiting for.
(Thousands)
Q1 Q2 Q3
2020 R&D $26,389 $42,734 $42,582
2019 R&D $13,783 $15,054 $17,573
2020 S&M $121,556 $159,173 $190,157
2019 S&M $64,041 $79,652 $96,048
2020 G&A $53,130 $81,238 $93,488
2019 G&A $18,503 $20,955 $23,806
Seq. Spend Change from Q2 to Q3 2020
R&D -0.36%
S&M +19.47%
G&A +15.08%
Seq. Revenue Change from Q2 to Q3 2020
$663,520 → $777,196 +17.13%
TexasTitan,
One largely untapped market is customer support. When all calls and chat and txts are done on the zoom platform. It could be technical support, where I share my screen with my app provider so they can debug a problem. It could be my bank, my insurance company explaining the EOB or why my rates went up. It could be instatcart asking if I’ll substitute whole milk for 2%, or asking me if the broccoli is acceptable.
A customer support team in an enterprise occupies many seats, and that multiplied by all the consumers is a big number. (No all the consumers won’t be paying customers of zoom initially, but they’ll become demanding users of it. Network effect.)
rgds,
Bill
I agree with Dave.
As a former tenured professor at several major universities, a few observations are in order:
Many on this board would NOT recognize what is going on in universities today. Trust me.
In-class classes are increasingly expensive for the university (expensive, tenured faculty member and relatively small classes). Forget what you thought about tuition, and student/faculty interaction at major universities.
Technology has been used for years to counterbalance this. (see Dave’s comments)
Distance “learning” has become BIG business on the college campus. In fact, many universities have become completely dependent on it during the last 2 decades… for without the large numbers of online students, many campus programs could not be sustained. Further, many of these classes are delivered by inexpensive adjunct faculty.
I first starting looking seriously at ZM soon after it became public last summer. My 1st investment was days after the IPO. Why? Several former colleagues were talking about their ZOOM rooms and how much better they were than WebEx. Many… not all… universities are somewhat laggards in their adoption of new technologies. But to appeal to the large numbers of online students, investments must be made.
Higher education is a HUGE market, and it is not going away. WFH or BTN. The revenue from these distance learning programs has become addictive. I predict ZOOM will benefit handsomely.
But then, it’s just my opinion.
breezyday
My apologies.
I was replying to Darth.