Hi guys, I came across this press release from zoom launching a suscription service for hardware needed in zoom phone and zoom rooms: https://investors.zoom.us/news-releases/news-release-details…
I am myself a tech guy and i understand the hassle that sometimes choosing hardware options can be. It sounds like Zoom is trying the resolve this and to remove friction for zoom phone and rooms. Something that i believe will help the recurring revenue after COVID restrictions begin to ease.
These service presents a few options for ip/video(?) phone hardware as well as a “get in touch with a specialist” form. https://zoom.us/docs/en-us/zoomphone/hardware-as-a-service.h…
It sounds promising and something that would remove a lot of doubts and fears for customers, so that’s good news.
But i’m trying to understand what this could mean for the business and i’m hoping you can chip in on this analysis. Bear with me, since i’m still learning the ropes here in terms for understanding the financials of these type of companies.
In their Q4 2020 conf. call Eric Yuan mentioned the 1 year milestone since the launch of zoom phone and shared a couple of metrics:
- 2900 customers signing deals for zoom phone (not sure if he meands for the Q or TTM)
- 230 million Zoom Phone minutes
Then in their latest earnings call they mentioned that one of their clients “In Q1, they deployed a Zoom Phone, which is our largest phone deal. Around 18,000 phone licenses”
When discussing other Q milestones in terms of cliente they also mention " In Q1, Arm chose to deploy approximately 8,000 Zoom Meeting licenses, 800 Zoom Rooms and 9,000 Zoom Phones to deliver a one-touch experience to their employees globally."
Even though those metrics (phone licenses vs. customers signing deals for zoom phone) aren’t comparable, the fact that this is a highlight in the call and that one of the mentioned clients signed more phone licenses that meeting licenses says something.
Regarding the Zoom phone minutes, their Q1 2021 mentions “+two trillion annualized meeting minutes run rate”. For the sake fo comparison (and considering that i’m comparing different Qs) the 230M minutes attributed to zoom phone seems insignificant, but maybe we need to wait for the other shoe to drop.
It seems to me that we can’t calculate a trend with these numbers yet but maybe someone can add on top of this. Up to this point i thought that zoom phone and rooms was just a “legacy” option to provide for offices and enterprise clients used to tele-conferencing rooms and such, but this announcement made me rethink this.
My conclusion: this service seems an excelent strategy to remove barriers and “land” zoom phone deals, which in turn will make it more difficult for customer to switch providers in the future (aka: moat). Although i haven’t found enought information to assert how big the opportunity is (maybe it’s bigger than video even), it seems that the company is betting heavy on zoom phone and rooms and this could be a big driver.