I’m an executive who works for a Financial Services software company. We have 2,000 employees. Our company just finished an evaluation of Zoom to replace WebEx (and other services). I was involved in our pilot group and was pleased with how intuitive and simple Zoom was to use. I didn’t see any wow features that WebEx didn’t have, but it always seemed to operate much more smoothly and consistently than WebEx. It simply just works and never gets in the way. WebEx seemed to always have some small annoyance or issue. Our IT group just sent out this announcement to our company. I tweaked it slightly remove our company name.
“In Q4 of last year we entered into an agreement with Zoom to replace WebEx, Citrix, GoToMeeting, and Polycom as our enterprise-wide solution for audio, video, and web conferencing. As part of the selection process we ran a comprehensive pilot program which validated that Zoom was the right tool for us. Since the purchase we’ve onboarded nearly 300 early adopters from all corners of our teams in preparation for its wide release. Feedback at each step of our discovery, validation, and rollout has been very positive. Because of this, Corporate IT is very excited to announce that Zoom is now available for use by all members of the company
Why Zoom?
The decision to adopt Zoom is both strategic and tactical. Zoom is a highly intuitive tool that will support the needs of our growing, global business now and into the future. Companies like Nasdaq, Uber, GroupOn, and Delta rely on Zoom every day. By replacing multiple tools with Zoom we will create a more consistent meeting experience for all our members. This single solution will also allow Corporate IT to provide concentrated support and deliver value-add integrations not previously possible. We’re already working with Support on a slick integration with our Salesforce Service Cloud – stay tuned”
Anecdotes such as yours, including others shared previously, helped me decide to start a small position in Zoom last week. It’s good to know that Zoom is attracting large accounts. I am self-employed and pretty much everyone I know, who is also self-employed, uses Zoom for webinars, online classes and private conversations that are better via video. A lot of these folks, myself included, once used Skype (free) for such purposes and have switched to Zoom, and are paying for the ability to host longer meetings and to easily record and share the event after the fact. In other words, there are lots of independent individuals, too, using Zoom. In my little corner of the world, it seems to be the standard and preferred technology.
As an investor in ZM, it’s good to hear that better can win. Unfortunately, my personal experience at my own Fortune 500 company, and many of the companies with which we do business, says otherwise.
As I posted before, my company is sticking with WebEx. Employees have complained, some even use the free version of Zoom for their 30 minute meetings. But, the company sticks with Cisco. I just had a meeting last week with another company using Skype For Business. The meeting started 12 minutes late as we were waiting for everyone to get in, and even then they had to restart the presentation since some participants couldn’t see the slides. We joked about it being some kind of unintentional security feature, and it was shared that the company was a big Microsoft shop and so they were stuck with Skype.
I’m still in Zoom, but I’m not believing that a better product is enough. They need a superior marketing and adoption strategy. Do they have that?
At my employer, over last few weeks I have tried Microsoft Teams for meetings (audio and presentations… does support video but I rarely use video in any calls)… and its worked really well…
And yes we are seeing lot of annoyances with Webex…
And I have been in Zoom meetings with third parties and that works very well…
So my personal thought is, Zoom has had a great runway as Webex has been faltering for years… but it may face Microsoft Teams as a very strong headwind coming up in its way… MS Teams is lot more comprehensive platform and MS has ramped up conference part of the platform in performance…
I like ZM’s metrics and so I hold a small position… but I would be cautious as MS Teams can stop ZM in its track just as it seems to have done for Slack and Box and such… these companies are growing revenue but market sentiment for them will remain challenging as MS Teams juggernaut carries on.
I’m still in Zoom, but I’m not believing that a better product is enough. They need a superior marketing and adoption strategy. Do they have that?
Well, let’s see, they grew revenue at 85% last quarter. Was that enough for you? They had adjusted gross margins of 83%. They had adjusted net income of positive $25 million. A 15% positive margin. They have positive EPS and growing rapidly. Operating Cash Flow, last quarter alone, was $62 million. That was a 37% positive margin. And Free Cash Flow was $55 million. That was a 33% positive margin.
I’d say “Yes, they do have a positive marketing and adoption strategy!” What do you think?
I would be cautious as MS Teams can stop ZM in its track just as it seems to have done for Slack and Box and such… these companies are growing revenue but market sentiment for them will remain challenging as MS Teams juggernaut carries on.
Zoom is building Moat in not just mindshare, but also in tools. Think of Zoom phone and also Zoom Rooms.
We use Teams, Slack, and Zoom at my organization. 190+ Zoom Rooms. Amazing tech. Teams is pretty good ---- but I see Teams as more of a Slack killer, not Zoom killer.
Zoom has too much moat.
We may see some announcement from MSFT re: emproachment/further build of Video on Teams ---- but if/when that happens, it’ll be a FUD moment.
From another board: The question is then how much can ZM grow the TAM. TAM can grow too by a new technology, and Zoom is that tech. Reports say videoconferencing rates go up r companies that adapt zoom.
My company is anecdotally one of those. As I’ve mentioned we have 190+ conference rooms outfitted as Zoom Rooms + we all can set-up Zooms from our laptops when away from home-office. It’s amazing tech ---- truly changing how we play at our company. We hosted a 600+ people zoom conference this week ---- 7 of us were hosts. 5 of the 7 were in the same building ---- and we all elected to host out of our offices versus in a conf room (for better audio purposes + the greater audience can then better see our faces). It’s changing how we work ---- for the FAR better.
Bottom line, if there are many other companies like ours, the TAM will increase ---- which is Ryan’s point that I’ve cut/pasted above.
I do believe the TAM will be much greater than $40Bn. If the TAM increases by 3x, then this thing is way undervalued. Someone might argue that a 2x $80Bn makes this undervalued too.
I have never used Zoom, but based on comments by users on this and other boards, Zoom might be providing a better overall experience as compared to Microsoft Teams.
However as a Teams users, I have noticed that it is well integrated with other Microsoft products - Outlook, LinkedIn, SharePoint etc. This could be a factor when companies evaluate which product to go for.
I work for a company with about 1600 employees and dozens of worldwide locations. Previously used Skype. IT department tried to get everyone to switch to Teams but lots of push back so IT did evaluation of Zoom and recently switched the entire company to Zoom.
It was simple to pick up for everyone in the company and their support is fantastic according to a few IT folks I polled.
I used it multiple times per day on both my computer and my mobile phone for both local and international video conferences. Works great! It is well integrated with Outlook. There a button on my Outlook toolbar for one-click meeting scheduling.
I work for a company with about 1600 employees and dozens of worldwide locations. Previously used Skype. IT department tried to get everyone to switch to Teams but lots of push back so IT did evaluation of Zoom and recently switched the entire company to Zoom.