Zoom FedRAMP authorization has been approved with the sponsorship of US Dept of Homeland Security; allowing federal agencies and contractors to securely use Zoom for video meetings. Zoom got the nod over Cisco and Microsoft
So you are implying WebEx and Skype/Teams aren’t approved for FedRAMP? Pretty sure that is incorrect, if that is what you are implying.
Still waiting for Arista to “crush” Cisco like everyone on this board told me in late 2017. What is the CAGR on that stock since about Nov/Dec 2017? About 0%.
The reason why everyone who doesn’t use zoom doesn’t use video conferencing is because the user experience isn’t very good on other platforms.
Once you get zoom, people migrate toward video calls because its really easy to do (switch on, switch off, set preferences, use across mobile and desktop) and because the quality is really good.
I’ve experienced first hand the culture change when you adopt zoom (from Webex in last company and from GotoMeeting in current company). Video culture starts to take hold and ultimately becomes the norm. Its a better culture because you can see body language and communicating is easier and more personal.
Its still not as good as face to face, but as good as you can get without a dedicated telepresence room.
I find the complete dismissal of Zoom as a disruptive force in Video communication from some very smart and respected posters a little surprising. I respect some level of criticism and skepticism. Rightly point out competitive products and argue against high valuation. Of course there’s risk involved. I just find when you take the absolute raving stories from Zoom customers about the transformative qualities of the product side by side with the outstanding fundamentals of the company at a decent size scale, can’t we at least admit that perhaps there is something special going on with Zoom?
I think the more realistic argument is to the degree to which Zoom is special and how long of a runway remains, rather than if they are special at all.
I am also stating that DHS selected Zoom Video Communications over other providers. I am implying, from research materials I read, that the other providers were as stated in my other post. I am assuming that the other providers you reference are also available through a GSA schedule, but in this instance, DHS chose Zoom Video Communications.
I never made any statement about what companies are or are not approved for FedRAMP.
Not really sure about your Arista v Cisco, “I told you so moment”. I invest in neither of those two companies and just recently joined this board, so I have plausible deniability on 2017.
Regarding your question on the CAGR of Arista since Nov/Dec 2017; see above.
Harley
…here to offer opinion and insight as well as learn from others in a professional and respectful environment
can’t we at least admit that perhaps there is something special going on with Zoom?
It is above a 40 P/S and something like $18.8b mkt cap.
This is not small, nor underappreciated in the market.
My comments are towards Zoom as an investment. Do I think the stock price will ultimately go up over next 6-12-24-36 months or however long I would choose to hold it vs other choices? What do I think a reasonable CAGR is for ZM since it is already highly-valued.
IMO, people are getting distracted with personal anecdotes and I see hardly anyone running CAGR numbers to determine if this is even a good investment.
I would argue you are probably safe at this level, because the metrics are so good, that I can see it retracing highs over time. But let’s say it gets back to $24b mkt cap…try to find comparables that justify growth from that point.
$18b to $24B is a solid 33% upside. But unless it grows well beyond $24b, your CAGR becomes pedestrian after 18 months.
$18b to $24B is a solid 33% upside. But unless it grows well beyond $24b, your CAGR becomes pedestrian after 18 months.
This made me think of a quote from a Tarantino movie:
Like my old grand daddy used to say, “The less a man makes declarative statements, the less apt he is to look foolish in retrospect.”
Honestly, I agree with you in principle, Dreamer: yes, the valuation for Zoom is very high, and over a longer period it’s unlikely that they have a great CAGR. They’ll likely suffer from WDAY’s fate. Great growth, great product, just started out overvalued.
But how can you say what will happen in the next few weeks and months? $24b seems like you pulled it out of…the ole random number generator.
Bear
PS - Like Darth, I’d love to see us stop arguing over anecdotes. I hated using Wix, but over 100 million people do!
Bear,
I am not a fan of absolute statements either.
Where did I get the $24b I pulled out of a hat or whatever?
I wrote “I can see it retracing highs over time. But let’s say it gets back to $24b mkt cap…”
ZM appears to be about 35% off ATH at the moment. Maybe it was $25-26b mkt cap at the ATH. I just remember it being $24b for a while there.
I see many anecdotal reports on Zoom saying that “No one at my company uses Zoom” or some equivalent.
Isn’t this because Zoom is just starting out and all those people who aren’t (yet) using it are part of its market. If everyone was using it already where would it grow?
I use Zoom at least 2-4 hours per day.
It is substantially better than every competitor for most use cases. The next best I have used is BlueJeans, which is not public, and I think Zoom is better. Slack and Google (Hangouts/Chat/Meet) can be better for small groups. Most people don’t appreciate the moat from their mobile product and Zoom rooms hardware integrations. I assume Webex is a dead product walking. I have less experience with Teams but as with all Microsoft products I assume organic growth rates will be confused with bundled deals and discounted line contract line item inclusions (same thing that probably makes Azure growth rates look better than they would be).
It isn’t revolutionary, but it is the best current mousetrap in a very large TAM. They have a very large advantage that people in this forum underappreciate in that it’s not revolutionary. People are used to paying money for this. They don’t have to establish a market or mindshare along with the time/marketing spend that requires, they have a large profitable market they can steal and is in a a long term secular growth trend.
They are too expensive for how I invest and I don’t own their stock.
From my layman’s view, Zoom’s selling point is that it’s easy to set up.
In my experience, large companies are usually the last ones to change. They’ll keep using MSFT or CSCO or IBM products until their employees basically demand something better. That’s why all these industries are being disrupted by tech companies.
We used WebEx in residency to do morning and noon case conferences. We just needed screen and audio sharing, though it would have been nice to have video sharing as an option. It usually worked, but was inconsistent, difficult to use on your own, and too expensive for our purposes if we wanted to allow everyone to remote in wherever they wanted. We tried multiple products (I don’t believe Zoom was around) and still came back to WebEx, but needed a very specifically configured computer for hosting otherwise we risked the conference not working. It sounds like Zoom would have been a good option for us.
At a big company, they have tech people who can figure all that stuff out so maybe ease of use doesn’t matter.
Plus all the statements that “we don’t use it” could arguably just mean more potential customers…
Zoom also integrates with 3rd party cloud based apps. Such as Zendesk and as we have seen this week, Splunk. This is where Cisco and legacy teleconferencing systems have struggled. This is one more reason Zoom is prime positioned for what direction things are going in. They truly are a leader in what they are doing. But say zoom turns into an $80 billion conpany (4x from here). They revolutionize business communications. I could be wrong but it seems to me competition would be able to easier duplicate what ZM has done then compared to. Say Adobe. So it would be harder for them to get to an Adobe size market cap (what they would need to become for worthwhile gains). It’s these market caps I’m having a problem with. Zoom has to really not only change the way business communications is done, but stave off competition once they realize ZM is doing, for ZM to become a mega cap that would offer worthwhile gains. And I’m not sure videoconferencing software is challenging enough a product for that to happen.
Jim,
This comment regarding Zoom strategy gave me a double take:
Zoom is working to become more than video, they want to be the communications company for business.
There have been several discussions on this board about disrupting disruptors. While your observation regarding Zoom’s strategy seems pretty innocuous, I couldn’t help but to think that Zoom may at some point pose a significant competitive threat to Twilio.
No information on that, but if I can contemplate it, it’s not a stretch to think that this might have been kicked around already in the Zoom C-suite. Might already be on a long-term, undisclosed product roadmap.
Zoom is working to become more than video, they want to be the communications company for business.
I own a tiny started position in ZM. While I believe the Zoom conferencing app is far superior to its competition(its ease of use and functionality crush Skype, Bluejeans, etc), I have always been very skeptical that this company has any durable advantage and that it lacks, as far as I can see, any obvious optionality, (1 hit wonder?). I bought my position because I was convinced listening to Tom Gardner talk about how much he admires the founder and some impressive interviews Yuan. And it is definitely impossible to ignore the tremendous growth over last number of quarters.
I was surprised and a little taken aback yesterday to learn that Zoom is now producing and selling hardware. This may not come as a surprised to those of you who follow the company, but learning this gives me pause. For those who follow this company closely, I am curious about your thoughts about this. Particularly as it relates to potential hit on margins.
