Zoom is in the right place at the right time. So the question is this: is it going to be like Android, or is it going to go down the same path to irrelevance that BlackBerry once went down?
Focus on building the best human-to-human virtual interaction experience.
Up until now, Zoom has primarily paid focus to video quality and frictionless onboarding of users, and that has paid off well for the company. But at this point, those are just the table stakes. What is going to determine Zoom’s success from here is how the company follows the users, how quickly it responds to its needs, and how it can keep innovating in an increasingly competitive space.
I think they are well aware of focusing on the best Human-to-Human virtual interaction experience, I think they just need to expand and enhance that to keep ahead of the ball.
My arguments for why Zoom’s excellent performance, scalability and ease of use will become “table stakes”:
In technology development just seeing that something HAS been done, you know that with the required staff skill set and budget you can do it too. You have the idea, and you see proof that it works. This is especially true for things like software and digital equipment design, where nothing inside is particularly difficult. If you see that something CAN be done, and it is “do-able” within your company’s skill set and budget, you can get it done. Maybe even better than the implementation you saw. There may be patent protection, but even that is only so good.
This is less so for things that require huge budgets like semiconductor fabs and airplanes, but even there: If we see it and we have the time, staff and money, we can PROBABLY build it too.
Video conferencing is easy to commoditize. If someone else can make it as easy to use and cheap as Zoom does, they will rake off some of Zoom’s users.
Therefore, Zoom cannot afford to rest on its laurels. They need to keep improving, and monitor how far they remain ahead of the others. Look how things went when users figured out that Windows and Linux work just fine whether it’s “Intel Inside” or “AMD Inside”. The x86 CPU became commoditized. Intel lost some price/performance lead when their 10 nanometer semiconductor process was delayed, and lost more with the 7 nanometer process delay. Users and investors rewarded AMD and punished Intel.
Zoom’s technology won’t be as difficult to reproduce and improve. They need to press forward.
One other evidence that seeing that “it can be done” is halfway to doing it too: This board right here shows people that it is possible to beat the index funds, despite what “everyone says”.
On the flip side, there are lots of examples in tech where bunches of imitators tried to duplicate something someone else had done, but didn’t quite succeed … sometimes because the original kept moving forward.
On the flip side, there are lots of examples in tech where bunches of imitators tried to duplicate something someone else had done, but didn’t quite succeed … sometimes because the original kept moving forward
That’s my point: They cannot afford to relax. They need to keep moving forward. Intel had a 2 generation lead, and a culture driven by the slogan “Only the paranoid survive”. It took AMD 15 years to make a dent in their business and only after 2 big schedule slips. Zoom doesn’t have that level of advantage, so they need to stay on task.
I am not dissing the company. I hold shares too. Just saying, their competition who was OK before with unreliable, poorly scaled video conferencing knows how much better it can be done. They will try.
That’s my point: They cannot afford to relax. They need to keep moving forward. Intel had a 2 generation lead, and a culture driven by the slogan “Only the paranoid survive”. It took AMD 15 years to make a dent in their business and only after 2 big schedule slips. Zoom doesn’t have that level of advantage, so they need to stay on task.
That was the whole point of the article too :). I think ZM will keep ahead of the competition. What I want them to do is start buying other companies to bolt onto their product. I also want to see them enlarge their app store and get developers more involved, If we see that it could be a huge company.
Just saying, their competition who was OK before with unreliable, poorly scaled video conferencing knows how much better it can be done.
Yes, but software is not just a thing that one can assemble to order. To get the best, a vision is required that may not exist in the competitors. Back years ago when I was selling my ERP software, there were some markets where I could go against Oracle Financials or Peoplesoft or the industry leader in certain sub-markets and blow them away since it would take a couple of million in customizations to their software to do what my software already did. Why? Not because I had a huge development team, but because I had created a development technology that was highly productive and allowed me to do customizations for existing customers for a few hundred or a few thousand dollars that others would have charged 10X+ plus to do, so they did them. Plus, I didn’t treat any customization request as a customer-specific issue, but rather dove in to the underlying business issue and so designed a response likely to be useful to others in the future. I would guess that 90-95% of the customizations we did went into core product for all customers. Most of the rest was things like the invoice format. Doing that is a question of vision and tools, not bodies.
on an unrelated topic, but still ZM related, ZM shares slid ~3.1% around 1P ET presumably from news that two senators are urging a Justice Dept. investigation into Zoom’s “…business relationships, data handling practices and operational connections” to China that could pose a risk to Americans. Interestingly, ZM shares have regained about 2.7% from lows of $243.50, up to ~$250ish as of 320 ET.
"ZM slid ~3.1% around 1P ET presumably from news that two senators are urging a Justice Dept. investigation into Zoom’s "…
Maybe this is not as much of a surprise to the street as it seemed at first blush since Senator Blumenthal already called for an FTC investigation of Zoom on the same basis 3 months ago.