Zoom Revenue Surges Due to Remote Work and Remote Learning
by Jim Lundy
Zoom continues to out-maneuver competitors in an era of remote work. Yesterday, Zoom reported a huge increase in quarterly revenue for its July quarter of $663.5 million. This blog talks about Zoom’s growth and the demand for video-based meetings.
Zoom Led with Video
More than anything else, the success of Zoom is due to its total focus on video meetings. It has led in this area, and nearly everyone else has followed. It is important to give credit where credit is due, and many of the innovations that the Zoom online meeting has added, such as the gallery view of attendees and custom image backgrounds, were developed and innovated at Zoom.
Zoom Capitalizes on Remote Learning
Part of the reason for Zoom’s massive growth, in which its revenues grew $507.7 million vs. the same quarter last year, was due to Zoom’s quick movement to capitalize on the need for virtual classroom-based teaching. Virtual classrooms were a big thing 20 years ago but had faded out over the last 10 years. Zoom has dominated in both K-12 and higher-ed teaching, and it was one of the first to bring breakout room features back into its product. Other providers, such as Cisco, are only now adding breakout rooms to their respective products.
Zoom and Remote Work
Zoom is not the only one to capitalize on remote work, but its ease-of-use has attracted many new customers. Its recent issue with security has not seemed to slow it down at all. The question for enterprises though, has to be a best-of-breed approach for meetings vs. a complete unified collaboration and communications (UCC) platform.
It's important to point out that almost all the other providers that offer web and videoconferencing have also done well. However, most of them have not grown at this revenue run rate.
What Is Next for Zoom?
Zoom’s CFO reported on CNBC today that it won one of its biggest Zoom Phone deals ever. Aragon feels that the race to the UCC platform is probably the next move for Zoom. Today, Zoom does offer meetings, voice, and messaging. However, its entrance into both Zoom Phone and Zoom Chat only really started in 2019. Most buyers look to Zoom for meetings only. Zoom’s challenge will be to compete with Cisco, Fuze, Google, LogMeIn, Microsoft, and RingCentral for the complete UCC platform play.
The demand for video-based meetings shows no sign of slowing down. Zoom helped to pioneer the shift from voice to video meeting online. The good news is that all enterprises need this capability and that there are many providers besides Zoom that also can fulfill this need. The next big race for video meetings is 4K. Check back at Aragon as we cover this market in depth.