Zoom Phone for GSuite

Background
Google’s GSuite is what companies pay for to be able to administer their own suite of Google tools including GMail, GoogleCalendar, GoogleDrive, GoogleGroups, GoogleChat and many others. Pretty much every company that uses Google and Zoom will have this add-on which

  • Syncs GoogleCalendar and Zoom events. We pretty much use Zoom from inside GoogleCalendar so this is key.
  • Adds a meeting drop-down inside GoogleCalendar event forms as well as a right-side-bar to change meeting settings from the calendar in advance of a meeting starting.
  • Provides a Zoom bot in GoogleChat so you can type “@Zoom start”, in a room or direct chat, to start meetings for quick strategy sessions, 1:1 screen-share demos when chat gets too complex, etc. I use this every day.

Today’s Notice
I just got this notice in my email about an hour ago:

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Dear Valued Customer,

Effective Sunday, April 25th, Zoom will be enabling new Zoom Phone features in the Zoom for GSuite Add-On that will prompt all users to reauthorize Google’s access to contacts and the company directory so that users can place calls directly through Google applications using Zoom Phone.

All Zoom for GSuite Add-On users will be prompted to reauthorize access to contacts and the company directory. Users will only need to reauthorize once. Because you are not a Zoom Phone customer, the add-on will not access your contacts or company directory, but reauthorization will be required in order to continue using the add-on’s schedule meetings functionality.

If the user declines the reauthorization, the Zoom for GSuite Add-On will no longer be able to schedule meetings.

If you have any further questions about the enhancement coming to the Zoom for GSuite Add-On, please contact our Support Team.

Team Zoom
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I love this. It is so on-mission for Zoom to add this value and at the same time make Zoom Phone that much easier to expand in to as an up-sell. Consider this: Any company that has people returning to the office will now have that much more incentive to add physical phones running Zoom Phone, to extend their GSuite setup on to desks. This is the same pattern that will cause people to add a lot of new Zoom Rooms as offices start getting used again. If you are work-from-anywhere with Zoom then you need physical office integration to extend the communication of the workforce seamlessly. This is the major power of Zoom phone. It doesn’t just replace old systems. That isn’t the full business case. It integrates a bunch of communication channels with that old system too.

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Hi Rafes!
Thanks so much for your posts on Zoom.

With Saul reducing his position to a bare minimum and no longer seeing dramatic upside for stock appreciation, the predominant tone of this board seems to have shifted towards bearishness on Zoom.

While many have soured on the company’s prospects, I believe the Market is missing the communications platform angle you keep reiterating.
Video will continue to expand commercially. Zoom phone and Zoom rooms have tremendous potential.
The substantial call center opportunity has largely been overlooked.

Steady 50- 60% growth on the current base of revenue strikes me as outstanding.

Considering the profitability and substantial FCF generated, Zoom is the proverbial textbook example of why we invest in SaaS businesses.

What the company has achieved in such a short time seems to be completely disregarded.
The steadiness displayed when faced with security questions and under a concerted PR attack last year was impressive.

The leadership displayed in making Zoom free to every public school in the country is incredible. When they decide to monetize this channel, profits will increase.
The positive impact of the product and the company’s generosity during the pandemic are inspiring and beyond noteworthy, yet completely ignored.
One would think this would garner more good will.
Instead Zoom seems to represent everything about the pandemic people are sick of.

IMO Zoom fatigue will pass. People will wake up to the excellence of their numbers, the overall business and excellence of their founder and management. Am still long and appreciate your insight.

Thanks again.
JT

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Thanks Rafes for the update on the G-Suite integration. I think that is a notable integration and now that I no longer use G-Suite I missed out on this. I think Zoom phone will be a revenue driver in the coming year.

That actually highlights one of my complaints about Zoom as a company, they don’t seem to announce these new capabilities/integrations/partners broadly. It appears to me that you have to be actively using them to hear about the new capabilities – and since the only thing I use Zoom for is family “calls” and webinars from Fidelity, Motley Fool Live, etc I don’t see them myself. It is probably a corporate vison that they only allow so many press releases in a given period to not dilute the corporate message, but the investor has to work harder to find out what they are doing to expand.

And thanks JT for the optimism for ZM’s future, though I would not say “the predominant tone of this board seems to have shifted towards bearishness on Zoom”. When looking at Saul’s philosophy of owning 8 to 10 stocks, you can’t own them all. And yet - even he kept a small position in ZM as one of his 10 holdings and even added to that in February - as others regular posters also indicated.

I myself did similar moves. I sold ~60% of my position in late Nov when it popped back up above $450 to fund purchases in other high growth positions (NET, OPKO, FUBO) and add to my cash position. And I bought a little bit back in Jan when it dropped below $350. It is a smaller 4% position in my “Saul portfolio” but will stay in there as the coming year plays out.

I am moderately bullish on Zoom because of the various expansions and product awareness they have, but have concerns about its ability to continue growth at elevated levels. I believe the guided revenue of 3.76B and 42% growth for FY22 is moderately conservative, but even if it tops 50% (great by most company standards) that is only slightly above the annualized Q4 revenues ( and well short of the 326% growth last year). So that concerns me a bit. And is one of the reasons why the stock retreated back to the sub $400 levels.

And just a side note to those who follow/mimic Saul’s moves in the market based on his monthly summaries. This is an example of why researching the companies on your own and making your own decisions is important. Because if I made these moves because Saul did (reading them in his monthly summaries), I would have (1) sold ZM in early Jan when it was down to $360 vs the $452 on Nov 27 and (2) bought again in at the beginning of March at $400 vs $347 on Jan 8.

Thanks again for your insights,

Jeff

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I have already added 5 Zoom phones in my practice, planning to add more. Works very well so far with excellent and responsive customer service. I had also checked out RingCentral, 2 x 2, etc, much worse customer service experience in my perspective.

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