Zoom to shift to ‘partner-only’ model in China, suspend direct sales
Aug 3 - Zoom Video Communications will shift to a partner-only model in mainland China from Aug. 23, suspending direct sales to all customers in the region, the company said on Monday.
Zoom customers in China received an email on Monday informing them of the change, and telling them it would provide users with “better local support.”
In the email, Zoom listed Bizconf Communications, Suiri Zhumu Video Conference, and Systec Umeet - as partners that can offer its commercial service to customers in China…
I was wondering about the same. Here is what I am thinking. As always if I am wrong, please feel free to correct me.
The sales will now be driven by partners so Zoom will not have to have physical presence everywhere and sales staff. They will essentially pay commissions/fixed fees to the partners. I think one of the big thing it does is remove the perception that Zoom is a Chinese company which is a big positive but not quantifiable. Lots of schools and other businesses that moved away from Zoom due to the security issues and the negative publicity associated where attackers made Zoom look like Chinese offshoot go away with this move.
I think that may be the reason stock is responding positively.
It is likely also to remove perception (and may be real as well) issue of Chinese government influencing Zoom…
So while Chinese government was successful in throwing out Google and Facebook for not supporting censorship laws, it is harder for them to do so with Zoom if Zoom is not legally operating in China… AND given that most of the rest of the world uses Zoom, Chinese business people dealing with world outside China may be forced to use Zoom as their clients across the world ask them to!!
Time will tell but it is possible that Zoom becomes first app / tool / company stays practically operational in China yet circumvents direct censorship.