what is the business model of zoom

How Does Zoom Work: Business and Revenue Model Explained

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The blend of coronavirus, social distancing, and remote working is the talk of the town. And you know who is giving fire to these talks? Obviously, mobile apps! 

While there is no doubt in saying that the usage of almost all types of apps has increased in these days of quarantine, the limelight stealers are Video Chat Apps .  By turning social distancing into distant socializing – these apps are making big bucks with every passing day. The unbelievable growth of apps like Zoom is proof. 

According to a report by Sensortower , Zoom registered almost 131 million new installs in the month of April which is almost 60X growth when compared to April 2019. 

With these astonishing stats, the app also became the most-downloaded non-game app globally for the month of April 2020 leaving big giants like TikTok and Facebook behind. Now, the question arises, how? A number of entrepreneurs who want to replicate the success of apps like Zoom want to know “How Does Zoom Work and Earn Money?”

In this blog, we will find answers to all such questions by analyzing Zoom Business Model. So, let’s get started.

Zoom Stats and Facts: Funding and Major Milestones

  • Founded/launched: 2011/2013
  • Headquarters: San Jose, California
  • Founder and CEO: Eric Yuan 
  • Total Funding Amount: $146M
  • Valuation at IPO: $9.2B
  • Number of Investors: 17
  • Zoom Business Model Type: Freemium

The Inspiring Success Story Behind Zoom

Before we answer How Does Zoom Work – let’s put some spotlight on how the app came into existence.

While getting extensive popularity and coming to run profitably enough over the last few years, Zoom actually entered the space of famous apps during the coronavirus pandemic. And, because of its amazing value propositions, this video conferencing solution is the talk of the town today.

The story behind it is inspiring because it was founded by a man whose visa was rejected by the US not just once, but repeatedly 8 times. Yes, Eric Yuan – the founder of Zoom is basically from China and was a part of WebEx, before the company was acquired by Cisco in 2007. 

When Yuan decided to enter an already crowded space of video conferencing – his friends called him insane because he was trying to make a space in the market that was already occupied by big giants like Microsoft and Google with their amazing products.

But, Yuan was confident enough to make it big in the video chat app market. He believed that he could build a product more enjoyable than even Skype with his strong industry insights and experience.

Well, it would not be wrong to say today that his confidence paid off. The software he launched in 2013 registered 1 million users within a few months, 10 million users a year later, and around 40 million after the two years of its launch. Over all these years, Zoom’s focus was just on developing its product better with advanced features and as per the feedback of the users.

At that time as well – the Zoom’s revenue was generated using its premium features over its free offering. By 2017, Zoom had become a unicorn and this continued success reached a climax in Zoom’s IPO 2019. The company impressed several investors in it by revealing the fact that it is already operating on a profit. And the rest is history.

The company truly took off in March of the year 2020. Yuan expressed in a blog post that through the period of that month, Zoom was getting  200 Million daily users on its app. The next month, this figure reached 300 million which is surely an incredible success.

Or, we would say it was an opportunity well used at the right time. Let’s now check out How Does Zoom Work and continues its operations.

How Does Zoom Work: Zoom Business Model Explained

Zoom is a video conferencing application, designed for business use. The product basically has a mass-market business model with no noteworthy differentiation between customer segments. 

It targets businesses of all sizes and industries that seek video conferencing solutions and has established a strong brand as a result of its incredible performance. It serves more than 300,000 organizations, including prominent users, like Arista, SolarCity, and UCLA. 

Here is How Does Zoom Work and maintain its position in the market:

1) The users can utilize Zoom Video Conferencing Solution on a number of platforms like iOS, Android, Mac, PC, and Linux.

2) The communication over the application can happen through chat, video, audio, or a mix of all the three which is actually the software’s value proposition. It is a one-stop solution for all types of needs for collaboration as it allows every mode of communication – may it be chatting, video conferencing, group meetings or simply calling.

3) The answer to How Does Zoom Work is by using the Freemium Business Model. It offers 4 different membership plans, one out of which is a free plan. The solution’s free plan is all that a regular user needs as it lets you have video conferences of as long as 40 minutes and with up to 100 members. 

4) But, that doesn’t mean you can say that Zoom is a free-to-use app. You have to pay a fee to use its special features, for example, – the ability to add 100+ members,  increased meeting hours, and integration with other services. 

5) As mentioned above, Zoom offers four pricing plans to let its users enjoy these special features and they are called Zoom Pro, Zoom Business, Zoom Enterprise, and Zoom Rooms. You can get details about its pricing here . 

6) Zoom’s core features involve one-on-one meetings, group video conferences, and screen sharing where users can meet one-on-one or in large groups and share their screen to see what others are doing. Its global adoption is however fueled by its two main products i.e Zoom Meeting and Chats. 

7) Users can attend Zoom Meetings using an internet browser, or mobile apps and desktop. The Chat comes as an extension to its Meeting product where users can connect through a chat with one another, share documents, or make groups. 

8) Zoom Rooms and Zoom Workspaces are also its products but the paid ones that allow organizations to use hardware such as a tablet, computer, microphone, camera, and some more to plan virtual meetings. These solutions are specifically meant for larger-scale businesses that need to work and collaborate across various offices.

9) Along with the above mentioned four products, the company has other products as well like Zoom Phone, Zoom Video Webinars, and an App Marketplace where its users can install and use third-party apps like HubSpot, Trello or Slack to enhance the functionality.

10) All in all it is not wrong to say that its freemium business model has helped increase its adoption rate and its non-stop updates over the time made it the best in the industry and a great fit for present time needs.

Now that we know all about it –  How does zoom work, what are its features, and the Zoom business model – it is time to see how the app makes money to continue its operations and ways it use to stay profitable while serving its users in the best possible way.

Also Read: Find Out 8 Hidden Costs of Developing an Application

How Does Zoom Make Money: The Revenue Model

To be very precise – Zoom’s focus was never on generating skyrocketing revenues. 

The present state of the company may look like an overnight success – but it is not. The focus of Eric was always on making a product that can sell itself and make its users happy. In other words, we can say that the key aspect of Zoom’s growth plan has always been to let their product do most of the talking. 

To prove it, here is what its founder and CEO told Forbes in an interview:

In spite of prevalent thinking that Zoom is an overnight success, it has consistently been in the spotlight at the correct places. The August 2018 Gartner quadrant for meeting applications put Zoom among the visionary leaders and it was positioned alongside Microsoft and Cisco, and well in front of Google and Adobe. Even in the stock market, Zoom has been a top performer.

Its revenue grew from $60M in 2017 to around $330M in 2019. However, 2020 was a different level of growth for Zoom. The only first quarter’s revenue of Zoom in 2020 was $121 million. 

And what is shocking is that its only source of revenue is still its subscriptions. As mentioned above, Zoom offers 4 subscription plans for its users called Zoom Basic, Zoom Pro, Zoom Business, and Zoom Enterprise. Here is how these plans vary depending on their offerings:

The Basic plan of Zoom is free to use and it permits its users to have up to 100 members in a single meeting, unlimited 1 to 1 meeting, online customer care services, and some extra features for group meetings. The main restriction in its free plan is that the duration of group video meetings is constrained to 40 mins. 

The Pro Plan of Zoom comes at $14 per month and persists all the features provided by the free plan alongside added advantages, like, – group video call duration increased to twenty-four hours as opposed to 40 minutes, the capacity to add more than 100 members, integration with Skype for Business and a lot more other features. 

Zoom Business

The Zoom Business plan comes at $19.99 per month and needs at least ten group members in your team to function. As the name suggests, this plan is more appropriate for small or medium-sized businesses. 

Zoom Enterprise

The Zoom Enterprise plan comes at $19.99 per month and needs at least 50 members in your team. Again, as the name suggests, it is a great fit for large businesses and organizations.

That’s all about How Does Zoom Work and makes money. The application is presumably a redefiner with regards to video conferencing and making an application like Zoom won’t be simple without a doubt. To put it all together, you will need to consider a number of aspects like market research, competitor analysis, app development, new features to add, back-end development, and marketing to build an app like Zoom.

So, if you are really serious about replicating the success of Zoom – you must learn a number of things from Zoom business model and strategies they adopted to stand tall in the market. Here are a few key takeaways on which you can focus while planning to develop an app like Zoom.

3 Lessons to Learn From Zoom’s Incredible Success

1. be user-centric always.

Since the year 2013 to 2020 – the thing that was consistent in Zoom’s journey was its priority for its users. The team at zoom never dreamed of overnight success or fast publicity. The founder and CEO of Zoom said in an interview that keeping their existing customers happy was always the first priority of the team at Zoom – even if that forced them to slow down sometimes.

So, before you plan on replicating Zoom’s success – fit the user-centric strategy at the back of your mind.

2. Focus on Making Your Product Better

At Zoom, collecting and analyzing user’s feedback is the way using which they have been able to create a world-class product. Here is a small note by Zoom Founder that shows why they are so successful today:

We always worked on making our free product work incredibly well. We provide most of our features free and that helped us build a loyal user base. That is the reason every day there are such a huge number of users coming to our website, free users. If they find our product useful, very soon they are going to pay for the membership – Eric Yuan

3. Never Believe That There Is No Space

When Eric founded Zoom, there were a number of doubts. Wasn’t the market already targeted? How can one fight against rivals like Google and Microsoft? However, the man behind Zoom – Eric Yuan – was confident about his idea. He understood that there is a lot that can be done to make things better in this industry.

And this should be a thumb rule for every startup – either solve a big problem or solve the already solved problem in better ways. Eric chose the latter and became what he is today – the CEO of a billion-dollar company.

Wrapping Up

So that was all about How Does Zoom Work. It is a great example of how video-conferencing apps should be. With its amazing business model – the software is winning market shares and giving neck-to-neck competition to big players in the market like Sykpe. 

Well, if you too want to create an app like Zoom – you must pull your socks now. No doubt there are still a lot of ways to stand-out for new players in the market. But, the journey to follow all of them would not be an easy one. 

The benefits and returns on investment of making video conferencing apps like zoom are clear enough with such apps getting immense success. Also, their trend is not going anywhere anytime soon with the world adopting work from home policies.

So, what are you waiting for? Invest in your idea today to reap big benefits in the near future. Get in touch with our expert consultants to develop an app like zoom.

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Humane yet subtle, Naiya is a girl full of ideas about almost everything. After earning a bachelor’s degree in computer science and engineering, she decided to merge her technical knowledge with her passion for writing – to accomplish something interesting with the fusion. Her write-ups are usually based on technology, mobile apps, and mobile development platforms to help people utilize the mobile world in an efficient way. Besides writing, you can find her making dance videos on Bollywood songs in a corner.

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Zoom Business Model

How Does Zoom Make Money? Analyzing Its Business Model

Executive Summary:

Zoom is a cloud-based conferencing tool that allows users to virtually interact with each other through audio, video, and chat. The company’s competitive advantage is centered around the product’s ease of use as well as high-quality audio/video output.

Zoom makes money via subscription fees, hardware sales, advertising, as well as by investing into other startups. It operates on a freemium business model.

Founded in 2011 by a former Cisco executive, Zoom became an instant success due to its product’s superiority. This culminated in the company’s IPO in 2019. Zoom is currently valued at $47 billion.

What Is Zoom?

Zoom is a cloud-based SaaS application that allows private individuals as well as businesses to virtually interact with each other. Communication can occur via text, audio, video, or a combination of the three.

Users can hold one-on-one meetings or conduct video conferences with up to 500 participants. Screen sharing allows meeting participants to better coordinate within meetings and distribute information.

The worldwide adoption of Zoom is powered by its two core products: Zoom Meetings and Chat as well as Zoom Rooms and Workspaces.

Zoom Meetings can be attended and held via a web browser, or desktop and mobile applications. The  Chat works as an extension to the Meeting product where users can interact through a chat with each other, share files, or create groups.

Rooms and Workspaces, on the other hand, allows businesses to utilize hardware such as a computer, tablet, camera, microphone, and more to hold virtual meetings. The product is specifically aimed at larger-scale organizations, which need to hold meetings across different offices.

To make integration with the hardware easier, Zoom even offers its own set of hardware that they developed in collaboration with other manufacturers (including the Poly X Series or DTEN ON).

Other products the company has developed are:

  • Zoom Phone, a cloud phone system that comes with features such as intelligent call routing, automated attendants, voicemails, dialing personas, call recording, and many more
  • Zoom Video Webinars, a conferencing tool that allows businesses to easily conduct large online events with audio, video, and screen sharing
  • An app marketplace, where existing customers can install third-party applications such as HubSpot , Slack, or Trello to enhance the functionality of the product experience

Zooms applications and hardware products are available across the globe. The company counts worldwide renowned businesses as customers, including the likes Uber, Rakuten, TransferWise , and many more.

Apart from visiting its website or downloading its desktop or browser clients, Zoom can also be accessed on Android and iOS phones and tablets.

A Short History Of Zoom

Zoom was founded in 2011 by Eric Yuan (CEO), a former executive at the video and web conferencing company Cisco WebEx.

Prior to starting Zoom, Yuan spent 14 years leading various engineering teams – first at WebEx, then at Cisco after its acquisition of WebEx in 2007.

He joined WebEx as one of the company’s first software engineers in 1997 after his 9 th visa application finally got approved.

At Cisco, he often saw how frustrated the company’s customers were with their inability to listen to their demands and the slow product iteration process.

For instance, every time a user logged into a WebEx conference, the company’s systems would have to classify which version of a product (Android, iPhone, Mac, or PC) to execute, which slowed things down tremendously. If too many people were on the line, the connection would be severely strained, which led to bad audio and video quality. Plus, the applications lacked features such as screen-sharing for mobile phones.

In 2011, Yuan decided to pack his bags and venture out on his own – making sure to take a team of 40 Cisco engineers with him in the process.

Initially, the company started out as Saasbee, but rebranded to Zoom soon after. In the early days, Zoom faced the problem of attracting investors since nobody believed existing giants such as Skype, Hangouts (by Google), and WebEx could be dethroned.

Luckily, Yuan’s network, which included former WebEx CEO Subrah Iyar, as well as his deep technological experience provided him with the necessary credibility to raise $3 million for Zoom’s seed round.

Two years later, in 2013, Zoom finally launched its first product (while announcing a $6 million Series A round).

The quality of the product stood out immediately and allowed the small software startup to become one of the leaders in the video conferencing industry. Video conferences could be held on all hardware platforms (i.e. desktop, mobile, tablet) with the ability to host 40 people at the same time.

Because Zoom’s pricing was significantly cheaper, customers were flooding in right from the get-go. Soon after its launch, the company amassed a customer base of over 1,000 businesses which hosted a total of 140,000 meetings. By May 2013, Zoom crossed the magic mark of 1 million participants .

Over the years, Zoom quietly added more and more features as well as customers to its platform.

The continued success culminated in the company’s IPO in April 2019. At the time, Zoom surprised many investors due to the fact it already operated on a profit. This stood in stark contrast to its tech counterparts including Uber, Lyft , or Pinterest, which continued to burn money at excessive rates.

In 2020, as a result of the coronavirus pandemic, Zoom rose to worldwide prominence as many companies began to use it to conduct meetings and organize their work processes. With its rise to worldwide fame, the company received some backlash for its handling of security matters.

There were several reported instances of unintended people joining existing meetings, a term referred to as Zoombombing . For instance, a recent Holocaust memorial was attacked and bombarded with images of Hitler.

During a zoom meeting on the eve of #Holocaust Memorial Day by the Embassy of Israel in Berlin that hosted survivor Zvi Herschel, anti-Israel activists disrupted his talk posting pictures of Hitler and shouting anti-Semitic slogans. The event had to be suspended. 1/ — Jeremy Issacharoff (@JIssacharoff) April 21, 2020

Multiple government entities, including the US or Germany, advised its administrative workers to avoid using Zoom .

Furthermore, more than 500,000 Zoom accounts were supposedly being sold on the dark web and hacker forums.  The company responded to these events by upping its security features as well as acquiring messaging platform Keybase . Despite these hiccups, the company has been on an absolute tear, seeing its stock value almost triple.

Additionally, the company added a variety of features, such as the ability to suspend participant activities as well as reporting unwelcomed users, in November 2020.

However, the vast adoption of its product also led to what many began calling ‘Zoom fatigue’. In March 2021, for example, Citigroup’s CEO Jane Fraser instituted a Zoom-free Friday to allow employees to recover from constantly being online. Even CEO Yuan himself later acknowledged that he suffered from Zoom fatigue.

In order to accelerate adoption of its products, Zoom also introduced its own app marketplace as well as began investing in other startups with the launch of a $100 million investment fund.

To capitalize on its astronomic stock price, Zoom, in July 2021, also announced it intended to acquire Five9, a maker of cloud-based customer service software, for $14.7 billion in an all-stock deal.

Unfortunately, the deal was called off in October as Five9 shareholders vote against the acquisition over concerns about Zoom’s slowing growth. Additionally, a U.S. Justice Department-led panel had grown increasingly concerned with Zoom’s ties to China and said an acquisition would pose serious national security concerns.

In the meantime, in August, Zoom also reached a $85 million settlement with users who accused the company of sharing data with third parties without permission, thus enabling the previously mentioned Zoombombing incidents.

With more and more people returning to the office, Zoom’s stock, despite record sales numbers, also took a big plunge. Despite its recent woes, Zoom continues to be one of the world’s leading video conferencing tools out there.

How Does Zoom Make Money?

Zoom makes money via subscription fees, hardware sales, advertising, as well as by investing into other startups.

The company operates on a freemium model , which means that customers can use Zoom’s products for free.

If they intend to access more advanced features, such as being able to host up to 500 participants being able to record calls, customers will have to pay a fee.

However, Zoom also has started to monetize freemium users through the introduction of ads.

Regardless of its monetization methods, Zoom’s competitive advantage continues to be grounded in its ability to deliver a flawless product experience characterized by fast loading times, high-quality audio and video output, as well as its ease of use.

Without further ado, let’s take a closer look at each of the Zoom’s revenue streams in the section below.

Subscription Fees

The vast majority of revenue that Zoom generates comes from charging various subscription fees in exchange for access to its suite of software products.

Zoom’s flagship product is its Meetings platform which enables teams and businesses to communicate online via audio, video, and text.

Apart from its free Basic plan, Zoom offers paid versions such as Pro , Business , and Enterprise .

These products are all aimed at a different set of customers and, depending on the price paid, allow them to host varying numbers of participants, obtain recording transcripts, or even host conferences in the firm’s native branding.

Zoom is then being able to cross-sell by offering ancillary services, such as more cloud storage or premium support, for an additional fee.

Similarly, it also monetizes its other software products, such as Zoom Rooms or Zoom Events & Webinar , via monthly or yearly software licensing fees.

Additionally, Zoom offers dedicated plans and products for a variety of industries including education and healthcare.

By tailoring its service to a specific customer segment, Zoom vastly increases the possibility of selling into that customer type.

On top of that, some of these customers, such as universities, are not very likely to replace Zoom (and thus churn) due to the sluggishness that comes with being an academic institution.

As a result, once Zoom has managed to engrain itself into such an organization (or even larger enterprises), it is unlikely to be replaced to the complexity being involved.

This, in turn, allows Zoom to better forecast its future revenue, which it can then use to buy up other companies (for example to extend its product suite) or invest into startups (more on that later).

Hardware Sales

Next to its software products, Zoom also offers various hardware items that enhance the experience of its software suite.

More precisely, Zoom offers dozens of different telephones, tablets, speakers, whiteboards, and more.

These products are offered in cooperation with other hardware manufacturers such as DTEN, Yealink, Neat., and more.

Customers then pay a monthly subscription fee for every hardware device that they source.

Zoom then shares that revenue with the hardware device manufacturer that takes care of the installation as well as maintenance service.

Advertising

Another, albeit very small, stream of revenue are the ads that Zoom shows after a meeting commences.

Originally introduced in November 2021, ads are only being displayed to free Basic users who don’t pay for its product.

Consequently, this finally enables Zoom to also monetize the users that do not want or need to pay for its products.

Just like with any other form of online advertising, Zoom is likely being compensated on a per-impression basis. That means whenever a user sees an advert, Zoom generates a small amount of revenue.

With tens of millions of active users, this can quickly compound into a significant portion of revenue.

Investments

As previously stated, Zoom, in April 2021, unveiled a fund with which it would invest into startups that build on top of its ecosystem.

Over the course of 2021, Zoom has invested in more than 20 startups out of its $100 million-strong Zoom Apps Fund.

Zoom generates money from the fund whenever it is able to sell shares in the companies it invests in for a greater price than they were purchased for.

It has to be noted that such a liquidation event is likely only occurring after multiple years have passed. Zoom can sell those shares during a secondary funding round (when existing investors get the chance to cash out), a sale, or IPO.

Apart from making money from those investments, the goal is to actually enhance the ecosystem around its product.

This allows Zoom to onboard a whole new set of customers, which may originally come from the startups it funds. Additionally, the more integrations Zoom possesses, the more attractive its products generally become.

To that extent, Zoom has also introduced its own app marketplace, allowing other software companies to integrate into Zoom’s product suite. However, Zoom does currently not monetize its app marketplace but could do so in the future, for example by charging a listing fee or taking a percentage cut from every sale.

Zoom Funding, Valuation & Revenue

According to Crunchbase , Zoom has raised a total of $276 million in eight rounds of venture funding.

Notable investors include the likes of Horizons Ventures, Emergence Capital, Sequoia Capital, and many others.

Zoom raised another $356.8 million in its IPO, which was announced in April 2019. At the time, public investors valued Zoom at $9.2 billion. Its valuation has now risen to over $47 billion.

For the fiscal year 2020, Zoom has recorded total revenues of $2.65 billion, up from just $623 million in the year prior. Profits surged to nearly $1 billion, up significantly from the $101.3 million it posted in 2019.

what is the business model of zoom

Viktor Hendelmann

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.

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Last Updated on January 2, 2023 by Viktor Hendelmann

How does Zoom make money?

By Nikita Sheth   |   Verified by Andrew Boyd   |   Updated Aug. 17, 2023

How Zoom Makes Money

  • Zoom’s audio and video conferencing solutions have been a huge driver of remote work.
  • Adoption of Zoom during the pandemic resulted in 300+% revenue growth and 350 million daily users in 2020.
  • Looking ahead, Zoom is expanding its strategy to focus on competitive international markets and phone solutions.

When a brand becomes a verb (think Uber, Google, or Photoshop), you know they’ve achieved success. Today, Zoom is the go to platform for video conferencing. As the pandemic forced businesses around the world to close, many companies migrated to collaboration and communication apps to remotely host staff and client interactions. Zoom benefitted hugely from this trend, experiencing more than 300% revenue growth in 2020.

Being a freemium service, Zoom has a business model to make money by up-selling users into paid plans. Here's how it works in more detail.

Coming up next

Coming up next

What does zoom do, how does zoom work, how zoom makes money, future growth engine, competitors.

Founded in 2011 by CEO Eric Yuan, Zoom is one of the most popular streaming and video conference platforms available. The company grew to prominence in 2020, beating out Skype as the preferred choice for conducting business remotely over streaming platforms.

Zoom went public in April 2019 at $36 per share, closing up over 70% on their first day of trading. Though Zoom’s outlook for growth is positive, there are growing threats to the company's reign at the top of the videoconferencing market. Recent security issues and the potential for the app to lose out to innovation remain concerns.

Zoom uses simple technology. As a SaaS company, Zoom allows individuals and companies the chance to communicate virtually through a unified communications platform. The platform offers three primary communication tools, namely, chat, audio calls, and video calls.

Zoom users can host one-on-one chats or video conferences for up to 500 attendees. Participants coordinate live streams through screen sharing, making it easy to share information in the session.

Zoom experienced a boost in worldwide adoption thanks to its core products, Zoom Meetings, Zoom Rooms, and Zoom Workspaces. Zoom’s streaming and hardware solutions are available globally and the company has a list of top Fortune 500 companies using its solutions, such as Delta Airlines, NASDAQ, and even banking firms.

Participants in Zoom Meetings can enter the session through a desktop or mobile application or web-based browser platform. The Zoom Chat feature allows users to communicate via an extension to its Meeting product. Users can chat, create groups, and share files.

The Zoom Workspaces and Rooms products allow companies to utilize hardware solutions to host a virtual meeting using their mobile device, desktop, laptop, or camera.

Zoom focuses its Workspace product on larger organizations that want to host meetings across several office locations. Zoom makes hardware integration easy by offering organizations hardware solutions to manage their organization's communications.

Some of the other products developed by Zoom include the following.

This cloud-based phone system comes with intelligent routing, automated call attendants, voicemail, dialing destinations, call-recording, and more.

Zoom video webinars

Organizations can large-scale online events featuring video screen sharing and simultaneous audio with no lag.

Zoom app marketplace

Users can select and install third-party applications like Slack, HubSpot, Trello, and more.

Zoom makes the majority of its earnings from subscription fees charged to B2B customers. They operate on a "freemium" model, meaning users have access to basic features for free and can pay additional subscription fees for different features within the product itself.

The company's standard freemium model allows users to hold group meetings with up to 100 attendants, with sessions lasting up to 40 minutes.

Their customer list includes a who's who of the world's top companies, adding to its reputation as the market leader in remote-based communication solutions for business.

Premium Plans

Zoom earns most of its money by charging for premium plans for its service.

Zoom Meetings & Chats

The Chat and Zoom meetings product it's the company's flagship offering. Users can cast a video call or jump onto a chat with colleagues or friends with this subscription.

The freemium version limits sessions to 40 minutes, while the premium version allows for unlimited session lengths. Businesses can pay for a monthly or annual subscription with a tiered pricing plan for small teams, small to medium companies, and large enterprises.

Zoom Rooms & Workspaces

This product provides users with virtual conferencing systems allowing companies to run video-call meetings and conferences. Customers can purchase the hardware through Zoom or choose to run through existing Cisco or Polycom systems.

B2B customers pay Zoom a subscription fee for using the service, with monthly or discounted annual plans.

This Zoom product offers users cloud-based calling solutions for companies that don't come with any phone bills. Users have the option for audio or video chat, and they pay a monthly subscription fee for calls within US and Canada with add-ons for global service.

Zoom Video Webinars

Zoom's Video Webinar package is for organizations that want to run web-broadcasting conferences and large events online. Users get up to 10,000-view-only attendees per event with a single license, with customized pricing for up to 50,000 attendees. Zoom also requires the user to purchase a webinar license, and it offers special packages to organizations in the fitness, education, healthcare, and financial industries.

Zoom continues to stay ahead of the pack with aggressive marketing campaigns directed at organizations. The company plans to focus more on the B2B model rather than accumulating its private user base.

Since the money is in business subscriptions, it's easy to understand why Zoom wants to pursue this route. However, the company understands that it needs to continue to market and innovate to stay relevant. In addition, Zoom will have to address ongoing security concerns in the industry.

Zoom plans to continue its focus on the growing video conferencing market, expand its international customer base, and encourage adoption of its phone solution, a large avenue for growth.

Zoom is one of the leading tech solutions focusing on video streaming solutions for the B2C and B2B markets. However, the company faces tremendous pressure from other top tech firms offering similar phone and video conferencing solutions.

Zoom's top competitors include large established players like Google, Cisco, Adobe, and Microsoft as well as smaller companies such as LogMeIn, TeamViewer, BlueJeans by Verizon, and 247meeting.

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How Zoom’s Product Strategy Evolved to Keep Pace with an Unprecedented Surge

A product strategy example focused on analyzing how Zoom’s product strategy scaled to meet the tsunami-swell connection demands an unexpected, unprecedented influx of users during a worldwide pandemic.

“Do you want to Zoom?”

Unless you live under a rock, you’ve experienced a video conference or two thousand in the last year— either as a participant or presenter. This experience is one of the many shared takeaways from a worldwide pandemic.

Zoom – as you are likely well aware – is a leader in video conferencing , joining the ranks of Google by transforming into a verb. A common refrain heard in households across the nation today is “Do you want to Zoom?”

Zoom for everyone

Zoom has become a language unto itself. Over the long months spent isolating, kindergarteners have grown as fluent in video conferencing as the ABCs. They are adorably reminding each other to mute or unmute during morning meetings. Grandparents, too, can now speak confidently about meeting codes and breakout rooms. Workers distanced from the communal office’s familiar walls are likely so immersed in Zoom-speak that they’re dreaming in technicolor Zoom.

We’ve all collectively settled into this brave, new Zoom world, quite frankly out of necessity. But also out of enormous relief and gratitude that we have an easy, accessible option to connect to some semblance of life as we know it as we navigate these strange pandemic times.

Zoom Meeting | Zoom's Product Strategy

A master class for product-led growth

We didn’t know it yet, but a global pandemic set the stage for Zoom’s product strategy to be a master class in the product-led growth (PLG) model , an approach in which prospects take an active role in looking for a solution and experience a product firsthand before committing.

After many months in flux, we’re finally making peace with our new Zoom reality. But early on, it was a lot to navigate. And yet, we plodded on. There were moments, sometimes whole days, when we didn’t know how we would go on. We did, and we are more resilient than we give ourselves (and each other) credit.

Each of us rolled out of bed each day – some of us opting for comfort wear, others adapting our wardrobes to feature Zoom shirts – and did our best despite the circumstances. Everyone fired up laptops and tablets. We tidied up the areas directly behind us — anything that the camera might catch that would paint a less-than-rosy picture of our pandemic lives and expose the dumpster fire that many of us watched our lives become. We settled in at remote workspaces fortified by coffee and homemade bread. And we Zoomed on a scale never before seen in the history of video conferencing.

Humans are hardwired to connect. Zoom is purpose-built to enable an easy connection. But how exactly did Zoom’s product strategy keep us all connected at the same time — seemingly without so much as breaking a sweat?

We set out to understand how Zoom scaled operations to accommodate unprecedented demand and get people to school, work, and just about every other activity of daily life virtually. Here’s what we learned.

Connecting People at the Heart of Zoom’s Product Strategy

While Zoom may be a household name (or verb) these days, less so might be the name behind the ubiquitous tech: Eric Yuan, Zoom’s founder and CEO. However, the company’s product strategy took root in Yuan’s early personal and professional experiences.

Before founding Zoom in 2011, Yuan, who emigrated from China in 1997, joined a small, fledgling WebEx Communications team that quickly expanded, went public, and was eventually acquired by Cisco in 2007. His journey continued at Cisco, where, as Corporate VP of Engineering, he was responsible for its collaboration software development. While at Cisco, Yuan began to observe a pattern of discontent revealed in conversations and meetings with WebEx customers who were unhappy with collaboration solutions at the time.

“Yuan felt for the first time that he couldn’t satisfy his customers…WebEx customers grew frustrated with the quality of the product. They wanted WebEx to work reliably and more intuitively. And above all else, they wanted the video to run seamlessly.”

( CNN Business: Everyone you know uses Zoom )

Unhappiness can be a strong motivator.

“I firmly believed I could develop a platform that would make customers happy,” Yuan said. And in 2011, he leaped to create a video communications tool that would, above all else, delight customers.

A love story

Like any good story , love was at the heart of Yuan’s brainchild :

“I first envisioned Zoom when I was a freshman in college in China and regularly took a ten-hour train ride to visit my girlfriend (who is now my wife). I detested those rides and used to imagine other ways I could visit my girlfriend without traveling — those daydreams eventually became the basis for Zoom.”

And like any good love story , there was a fair amount of risk-taking and perseverance involved to realize the dream. Yuan’s eight attempts to be granted a U.S. visa failed. (Thankfully, he tried a ninth time.) His early Zoom team fought hard to raise its first round of funding of three million dollars. (Today, in a single month, the company’s stock is skyrocketing — surging over 600% since the beginning of 2020.) And the team also wrestled with finding the right go-to-market strategy.

But the struggle has certainly paid off — and then some.

Zoom stats today show that the company has approximately 265,400 customers that have more than 10 employees. It claims more than 300 million daily meeting participants. It has more than 2,500 employees around the world. Yuan was named Glassdoor’s top CEO in 2018 and ranked number one on Business Insider’s list of 15 best CEOs of 2019. And as of a September 9, 2020, Financial Times report, the company is now worth $35 billion.

And as if the last year hasn’t been busy enough for the folks at Zoom, the company was recognized as one of the best solutions for product managers at the  2020 Product Award. It earned a distinction for tools that “help product managers build the next great innovation” for its ability to connect teams.

Zoom is now an undisputed leader. In fact, it’s the one to watch in a crowded space that includes some pretty big names in video conferencing: Cisco Webex Meetings, Google Meet, GoToMeeting, BlueJeans Meetings, and join.me.

Centering on customers and delivering its promise to provide a simple, hassle-free connection continues to set Zoom apart from the big-name competition. By building on its PLG model, many of its key features are available for free, which gets Zoom into the hands of millions of users connecting for work meetings, school instruction, yoga classes, and book clubs. At the same time, other premium features are available with a paid subscription.

Zoom Meeting | Future of Zoom Classrooms | zoom's product strategy

Zoom’s rise to leadership

That’s an astounding rise to a leading role on the world’s stage. Roman Pilcher, the product management expert, suggests a product strategy should contain three key elements . First, the market for the product and the specific needs it will address. Secondly, the product’s key differentiators or unique selling proposition. Lastly, the company’s business goals for the product.

In part, Zoom’s product strategy was born out of Yuan’s first-hand knowledge of WebEx’s unhappy users. In the Entrepreneur’s Handbook, Louise Morris notes, “Yuan didn’t come up with Zoom because he wasn’t allowed to fix WebEx—Zoom was an idea that was already there but improved over time. By identifying the weaknesses of future competitors, he built on his idea to have an advantage . He found potential in other people’s problems.”

According to Yuan, Zoom was purpose-built to accommodate many users. He  explains :

“The goal was simple, a better service bringing happiness back to customers who want next generation communication, meaning they want to have better video collaboration experts. When I started, we already knew that video is the new voice and video communication will become a mainstream service in the future. That is why we made sure that our architecture is right. It was the first cloud-based video architecture in the world. We wanted to make sure that we can scale our business to have a customer base of millions, to be able to leverage the public cloud like Amazon, Oracle Cloud.”

Simple, hassle-free connection (in Zoom-speak: “frictionless communication”) has always been at the heart of this product story. From the get-go, Yuan and his team focused on what mattered most: Building a really great product that would easily bring people together – lots of people – while putting the needs of customers first.

Elements of Zoom's Product Strategy Example ProductPlan analysis

A Business Built on Customer Delight

Zoom’s underlying mission is to make video communications frictionless and keep an unwavering eye on bringing joy to customers—the company’s product mission: To make Zoom meetings better than in-person meetings. From day one, customers have been front and center in developing the Zoom platform.

According to Yuan, “ to have the best experience, you’ve got to take a different approach . You need to take a step back to really understand the customer’s problem and then invest your engineer time into the product.” He adds that simplicity is key for driving customer usage: “You make sure it’s effortless to use. If it’s too hard, nobody is going to use it.”

Delighting customers starts with happy employees. “We’ve got to make sure we love the solution. If employees aren’t happy, they can’t deliver happiness to our customers. Our culture is to deliver happiness to each other and deliver happiness to our customers.”

A fundamental focus on customers

Bringing goodness to the world has been a fundamental focus for the company. Zoom’s company culture famously “centers on happiness and caring,” said Yuan. “We expect our employees to care about the community, the company, their teammates, customers, and themselves.” This caring philosophy is a “common refrain in our all-hands meetings, and it is the core of the work at Zoom.”

Adds Nick Chong, Head of Global Support & Services at Zoom: “We have a relentless focus on making the best product with the best user experience. This is ultimately what every customer wants. Toward this end, we spend much of our time listening to customers and fine-tuning our software to fit their needs.” It’s worth noting that Chong’s company bio highlights his extensive expertise in technology, market development, product strategy, and pursuit of customer satisfaction.

Zoomtopia event showcases users

Even Zoomtopia, an annual Zoom-sponsored even t that hosts keynotes, discussions, and sessions from Zoom’s partners, reinforces an unwavering focus on customers by highlighting product use cases. “Zoom actively asks its users to participate and share their stories for this event. Use cases act as social proof and help in reducing the resistance to adoption.”

OK, so customer satisfaction is the bedrock of Zoom. But what happens when customers exponentially multiply overnight due to a worldwide pandemic?

Zoom | Zoomtopia Screenshot | Inclusive Zoom Video Event

Global Pandemic Creates a Surge in Users and Forces a Change in Zoom’s Product Strategy

Quite suddenly, entire classrooms of students, schools, school districts had to pivot to distance learning. Students – from kindergarteners to college seniors – went remote. Teachers scrambled to transform in-person curriculum and strategies into a completely different format.

Similarly, an army of workers with varying experience working outside traditional office spaces scrambled to set up shop in the most unexpected places: closets, kitchens, a quadrant of the dining room table, basements. Before the dust could even settle, they had to carry on professionally as if nothing unusual were at hand. (Cue the kindergartener melting down in the adjacent quadrant of the dining room table and the dog barking in the background.)

Other activities began to shift online – things like healthcare consultations, music lessons, art classes, book clubs – even concerts and conferences went virtual.

Virtual meetings were no longer just for casual, occasional use. They were now a lifeline to school, work, and everything in the outside world.

Zoom Meetings in COVID-19 Pandemic | Zoom Product Strategy

Pandemic usage surge

To say that usage went up for Zoom is a gross understatement. From March 2020 to April 2020, daily meeting participants jumped from 200+ million to 300+ million in a single month. Compare that figure to the approximately 10 million daily participants just a few months prior in December 2019.

Of course, rapid growth often begets growing pains.  Zoom room bombings entered the scene almost as shockingly as the pandemic, making already seriously stressed parents and teachers wary of turning their young students over to the potential dangers lurking in online classrooms.

Soon Zoom fatigue and burnout took hold. Everyone stretched thin trying to manage school meetings, work meetings, online appointments, virtual guitar lessons — the list seemed endless.

Then there was the creeping erosion of personal privacy in our own homes. Video calls making us feel vulnerable in the intimate spaces in which we were now indefinitely confined. And who can forget the rare instances of what should have remained truly private that was now broadcast on the world’s stage. To be sure, this army of fresh remote-work recruits had to train on how to behave in online meetings.

Acing the Ultimate Product Test

Even in the face of public scrutiny over security vulnerabilities, Yuan and his team kept listening to customers and taking action. They wanted to improve the product in ways that best serve users. Critics like tech journalist David “Doc” Searls and Citizen Lab research scientist Bill Marczak took note of Zoom’s responsive steps to criticism. Yuan viewed the scrutiny as an opportunity “to improve his company in ways that he could never have imagined otherwise.”

That being said, the surge in user demand and the ever-constant use shifted the roadmap on Zoom. Despite the pandemic (and staggering increase in usage), customers still expected unwavering reliability and access and a seamless, hiccup-free experience.

“While figuring out how to make scalable video calls was a daunting challenge, for Yuan’s Zoom team, it was only half the battle. They also had to make Zoom frictionless enough that anyone could use it. So easy that it makes his customers happy.”

To leverage the special status carefully, Zoom needed to be easy to use. Grandparents depended on it to connect with distant families. Kindergarteners depended on it to connect with teachers and peers. People of all technical abilities needed to use it for all flavors of everyday life. Teachers and other professionals needed to be instant experts in guiding novice users and larger groups. No matter how large the user base grew, Zoom still needed to ensure streaming wouldn’t be affected by schools’ unprecedented heavy usage and remote workers.

Changing Positioning

It was immediately clear that Zoom needed to adjust its self-image. It had long positioned itself as a free business-to-consumer service. But now, the surge of heavy business usage called for a business-to-business model, too.

This was the ultimate test. It required a fast-tracking maturity across all elements of the product. In areas that Zoom, as an established B-to-C company, might have relaxed its focus in the past (business-grade security, for example).

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Feature updates and enhancements like updated font sizes, breakout rooms, and, most important, tougher security were prioritized. These features rolled out quickly, which highlighted and demonstrated Zoom’s ability to empathize with its users, solve users’ problems, and delight them — all while navigating a pandemic with the rest of the world.

More changes were afoot on the product team itself. A good portion — by some reports, most — of Zoom’s product development team is based in China, where the company has more than 700 employees. Towards the end of May 2020, Zoom announced that Velchamy Sankarlingam joined Zoom as President of Product and Engineering. Reporting directly to Yuan, Sankarlingam was brought on to oversee Zoom’s product, engineering, and dev ops teams. Around that time, the company also grew its engineering team by around 500 employees on the U.S. side.

Zoom Was Scaling for Growth, Externally and Internally

However, it’s important to note that the company’s astonishing success isn’t solely the result of a pandemic crisis driving users online. Zoom was already chugging along on an impressive growth trajectory, gaining traction and rivaling the giants in the video conferencing space well before the pandemic . Its reputation of being reliable, less glitchy, less flashy, easier to launch, and more intuitive made it a standout when the pandemic took hold.

“Anyone concerned that Zoom will simply fade away once we’re over the COVID-19 crisis isn’t paying attention. Video meetings, virtual learning, and social Zoom gatherings aren’t going away entirely anytime soon. Zoom was never a pandemic growth story. For 10 consecutive quarters, customers with at least 10 employees have registered a trailing-12-month net dollar expansion rate of 130% or higher (that is, returning customers spent at least 30% more than a year earlier). The pandemic helped accelerate the revolution, but it was happening with or without the COVID-19 calamity.”

( The Motley Fool: 3 Reasons Zoom Stock Should Bounce Back )

Zoom’s product vision has always been simple: Connect people easily. As the company continues to navigate the pandemic and prepare for a post-COVID world, it’s not planning to differentiate user categories heavily. “I do not think we need to have a specific consumer strategy,” said Yuan. “No matter where you are, no matter what you do, no matter which device, we just help you to stay connected.”

Post-Pandemic Expectations

When the stakes are high and the stress unbelievably great. Yuan himself admits that April 2020 found him engaged in only three activities: Zoom, eating, and sleeping, though sometimes going without the latter for a few days. Yet when the entire world is watching you – that’s when you double down. If you can stay true to your mission and strategy in those conditions, you prove your mettle, and then some.

According to Yuan:

“From the moment we founded Zoom, our main focus has been to provide a cloud video communications solution that would make customers happy. That focus has continued to guide all our innovations, partnerships, and other initiatives. The fantastic growth we’re experiencing and the many industry accolades we’ve received can all be attributed to having satisfied customers that enjoy using our platform.”

But what happens after the pandemic? At some point in the future, students will return to physical schools again. Many remote workers – though not all – will return to brick-and-mortar office buildings. Will Zoom’s period of massive growth plateau? Will it plummet?

Zoom CFO Kelly Steckelberg doesn’t think so, asserting that  remote work trends were already happening before the pandemic . “This has just accelerated it. Given the way that the world has embraced Zoom, we expect this experience of working from anywhere to continue in a post-COVID world.” Steckelberg adds, “We’re excited about Zoom’s ability to support workers as we transition back through capabilities like [Zoom Rooms] Smart Gallery, which enhances the experience of face-to-face communications between remote workers and those in the office.”

The future of work

Experts believe that the  future of work post-pandemic will be more of a hybrid blend of remote work and occasional in-office time. Office time earmarked for special projects or necessary in-person collaboration (e.g., creating new products.) The Pew Research Center reports that: “Most workers who say their job responsibilities can mainly be done from home say that, before the pandemic, they rarely or never teleworked. Only one-in-five say they worked from home all or most of the time. Now, 71% of those workers are doing their job from home all or most of the time. And more than half say, given a choice, they would want to keep working from home even after the pandemic.”

Steckelberg adds that the company has also seen growth specifically in its customer base with fewer than 10 employees. This group has grown to 38% of Zoom’s revenue, up from 20% just one year ago (Q4 2019). “We’ve been inspired by the many creative ways we have seen our customers and prospects use Zoom during this pandemic,” continues Steckelberg.

Truth be told, however, Zoom was already used for a multitude of uses before the pandemic. From an interview in 2017, Yuan explained:

“Because it lets people meet face-to-face and provides support for screen sharing, it’s truly a collaboration catalyst and helps build teams across geographies. Zoom has a remarkably wide range of uses. In fact, Zoom is being used today by developers to write code together, by physicians to diagnose patients, by educators to conduct classes, lawyers to mediate or interview witnesses, and by actors to conduct virtual rehearsals.”

More than meetings

In its typical responsiveness to customers, Zoom recently launched  OnZoom. OnZoom is an event-hosting platform to meet the needs of this growing group of small business owners and individuals. From the Zoom blog: “OnZoom is a comprehensive solution for paid Zoom users to create, host, and monetize events like fitness classes, concerts, stand-up or improv shows, and music lessons on the Zoom Meetings platform.”

The new platform makes it easy for SMBs and individual business owners to host and monetize virtual events. “That is something that is certainly going to continue after a vaccine because it’s just more convenient. You can take a piano lesson or cooking class from the comfort of your own home,” says Steckelberg. “It’s these innovations that are driving more interactions with our end-user customers.”

People First, No Matter What

In the end, Zoom’s product strategy has given us what the pandemic took from us: Connection to each other and what’s most important to us. During an unimaginable extended period of confinement and social distancing, Zoom helped us create new virtual pathways to meaningfully connect and maintain the most important aspects of our day-to-day routines. In doing so, it has established itself as a household name, recognizable by young and old alike — a silent enabler of and witness to our work, our play, and our relationships.

As the world changes

As the world transitions back to some semblance of normalcy, we think Zoom must continue listening closely to customers to successfully support the many ways that people will return to post-pandemic daily life. It will also need to actively reimagine its relevance in what will likely be an evolving new “norm.” And as we collectively try to forget the stress and trauma of our pandemic experiences, it’s crucial that Zoom carefully navigate what is already taking hold in casual conversations: the notion of Zoom fatigue. The world is weary of its months-long confinement. It needs a fall guy. Zoom needs to clarify that it wasn’t the problem–it was a key part of the solution.

We think Zoom will also need to leverage the special status carefully it’s earned during this collective crisis by finding ways to strengthen relationships forged during the pandemic and avoid becoming a triggering memory once the pandemic is history. This will be a critical component of the company’s long-term sustainability.

Customer conversions

Customer conversion will also be key for Zoom’s product strategy. The question is: Will it’s tested and proven record of keeping customers’ needs front and center at all times convert free users into paying customers?

Finally, what began as a panicked effort to keep working, learning, and connecting during a global pandemic has become a precious teachable moment: It is absolutely possible to keep working, learning, and connecting virtually with a simple, reliable tool like Zoom. If they haven’t already, companies of all stripes will reevaluate the need for costly business travel, which–in addition to lowering a company’s expenses–will have a significant impact on reducing carbon emissions and improving productivity.

For students and teachers in colder climes, this teachable moment might be received less enthusiastically. Online instruction and learning is effectively the death knell of the special snow day. Zoom has proven that both work and school (and just about every other imaginable engagement and human ritual under the sun) can carry on quite effectively in the cloud. Zoom should leverage this valuable learned experience and lead the charge in reducing the negative impact of unnecessary business travel. They can do this by simply staying true to Zoom’s product strategy: To make Zoom meetings better than in-person meetings (though it might want to add: So we can heal the planet).

Zoom’s Product Strategy Win

Building a great product and listening to customers every step of the way has been a winning product strategy for Zoom thus far. And when put to the test during a pandemic as usage skyrocketed beyond anyone’s wildest dreams, the company continued to listen, learn, and adjust.

If Zoom keeps listening, putting people first, and delighting users, we believe there’s no end to its potential growth and success. We honestly can’t wait to see what the next chapter holds for this people-first company in a post-pandemic world.

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Zoom Business Model: How Zoom Makes Money

When Eric Yuan, Zoom’s CEO, decided to go after the video conferencing market in 2011, the market was already  flooded with incumbents  like Microsoft-owned Skype, Google Hangouts & the then market leader Webex, owned by Cisco.

Eric served as the VP of Engineering at Webex when he decided to venture out independently. So why did he quit Webex, start Zoom & how did he turn Zoom into a leading video conferencing software with almost 50% market share ?

There’s no denying that the coronavirus propelled Zoom’s growth in a way nobody could have predicted, not even Eric himself, but Zoom was a successful product even before the whole virus thing happened.

Let’s find out the exciting backstory behind what might look like an overnight success before we delve into Zoom’s’ Business Model.

The Zoom Backstory

Convinced that the internet was the next big thing, Eric decided to migrate to the US from China in the mid-’90s. The first time he applied for a US Visa, his application was rejected. The US customs misunderstood Eric as a part-time contractor because his business card listed him as a consultant. After that incident, the now-skeptical immigration services rejected his Visa 7 more times, but Eric did not give in.

“I told myself, okay, great. I’ll do all I can until you tell me that I can never come here anymore. Otherwise, I’m not going to stop.” He continued reapplying for two years until he was finally accepted on the ninth try. 

In 1997, Eric joined Webex as a founding engineer. Operating in the space of real-time video collaboration, the company had half a dozen employees at the time. Webex grew quickly & went public in 2000, riding the exuberance wave of the dot-com bubble. In 2007, Webex was acquired by Cisco for $3.2 billion. By that time, Eric had climbed the ranks to become VP of Engineering.

Eric continued to work on Webex, which was now a part of Cisco, until 2010, when he realized many of Webex’s customers were unhappy with the product. Why were the customers unhappy? The product had not evolved to keep up with the times. 

For example, every time users logged into a Webex conference, it took a lot of time to get down to business because the company’s system would first have to identify the version of the product (Android, iPhone, Mac, or PC). If too many people joined the conference, Webex’s system wouldn’t be able to handle the strain, leading to a decline in the audio and video quality. And not just that, Webex also lacked modern features like screen sharing for mobile.

Eric tried to convince his bosses to upgrade the product for a year, but they wouldn’t budge. In 2011, Eric finally decided to leave to give a shot at the video-conferencing business, taking his new product in the direction he wanted Webex to follow. More than 40 engineers followed Eric and left Webex to become a part of his venture.

However, with the market already saturated with products like Skype, Google Hangouts & the then market leader Webex, investors were skeptical of putting money into Eric’s new venture. Fortunately, former Webex CEO Subrah Iyer believed enough in Eric to give him a seed funding of $3 Million.

Two years later, in 2013, Zoom launched its first iteration,  raising a $6 Million Series A round at the same time. By May 2013, Zoom’s superior product capabilities helped it reach 1 million participants, connecting more than  400,000 meetings & 3500 businesses .

Zoom managed to get traction because it differentiated itself in many different ways from the existing players. Zoom video conferences were easy to set up and compatible with all devices, including desktop and mobile, via Android and iOS apps. Zoom was able to handle a data loss of up to 40%, so it worked with a weak internet connection. To top it all off, Zoom had a $9.99 per host plan ($14.99 now), which made it cheaper than its competitors.

Zoom kept growing, adding new features along the way. In October 2018, Zoom launched the Zoom App Marketplace , allowing third-party developers to build applications on top of Zoom. The app marketplace, now a common growth lever used by SaaS companies, helped accelerate Zoom’s growth by improving user experience.

In April 2019, Zoom went public at a share price of $36, valuing the company at $9.2 Billion. When Zoom went public, it was already operating at a profit, unlike other tech companies like Uber, Lyft & Pinterest, which went public at around the same time.

In 2020, the pandemic, which forced many businesses to adopt remote work, increased Zoom’s’ popularity in unprecedented fashion overnight. In Dec 2019, 10 million users were participating in daily Zoom meetings. By April 2020, the daily meeting participants had increased to 300 million.

Another indicator of Zoom’s insane success is the company’s growth. In Q2 of 2021 alone, Zoom made more money ( $1.021 billion ) than it made in the financial year of 2020($622 million). The total revenue earned in 2021 amounted to $2.6 billion.

In July 2021, Zoom announced a $100 million investment fund to stimulate the growth of the ecosystem of Zoom apps, integrations, developer platform, and hardware.

How Zoom Makes Money

Zoom primarily makes money from Zoom Meetings, the core offering it sells using a freemium model. Zoom also generates revenue from 5 subscription-based offerings: Zoom Phone, Zoom Events & Webinar, Zoom Rooms, Zoom United, and Zoom Contact Center. A portion of Zoom’s revenue also comes from the hardware sales and ads shown to free tier users.

Let’s look at each of the subscription revenue sources individually before we move on to discussing company financials.

1. Zoom Meetings

Zoom Meetings allow users to connect through audio & video. It is also the most commonly used and popular service provided by Zoom. Meetings also include Zoom chat, allowing users to share text, images, audio files & content.

Pricing plan of Zoom Meetings

The  basic plan is free , but it has restrictions like a 40-minute time limit & 100 participants at most for the group meetings. Zoom offers Pro, Business & Enterprise plans for small teams, small & medium-sized businesses & large enterprises respectively, with features suited as per the size and the needs of the customer.

2. Zoom Rooms

Zoom rooms are conference room systems  that allow users ( mostly large organizations ) to have Zoom video meetings seamlessly.

Rooms come with a 30-day free trial. If users wish to continue using Rooms once the trial ends, they can buy a subscription at $49/month per room. The more the number of conference rooms the organizations want to connect through Zoom rooms, the more money they have to shell out. For example, to purchase a plan for ten rooms, organizations would have to shell out $490 per month.

Zoom Rooms Pricing: Free, Rooms Licenses & Rooms Enterprise

Suppose the customers already have conference rooms set up using Polycom, Cisco, or Lifesize equipment. In that case, they can use the Zoom conference room connector to start Zoom Meetings directly from existing conference room systems.

If they do not have existing conference rooms set up, they can purchase hardware from Zoom’s hardware partners, which include companies like  HP, Lenovo & Logitech  to name a few. If needed, Zoom also provides customers with installation support for the conference rooms.

3. Zoom Phone

A  cloud-based calling solution  available as an add-on to the existing Zoom service, Zoom Phone brings traditional phone capabilities directly into the Zoom application, turning Zoom into a complete collaboration product by providing voice, conferencing, messaging, and video services together.

Starting at $10/month per user , it comes with features like auto-attendant, call recording & many more.

Zoom Phone Pricing Plans: US & Canada Metered, US & Canada Unlimited, Pro Global Select

4. Zoom Events & Webinars

With Zoom Video Webinars, users can host online web conferences. The offering comes at $79/month/license for up to 500 attendees—the $79 base price increases as the number of attendees increases.

While Zoom Webinars are useful for single-session, one-to-many presentations, Zoom events add to the capability of webinars by allowing to connect multiple webinar sessions. Events also come with event management features like branded events hubs, registration and ticketing, and enhanced reporting. The Event offering comes at $99/month/license for up to 500 attendees.

Zoom Events & Webinar Pricing for up to 500 attendees

5. Zoom United

A bundled offering, Zoom United clubs together Zoom Meetings & Zoom Phone under one subscription plan. Users can choose from Pro, Business & Enterprise plans, depending on the features and seats required.

Zoom United Pricing Plans: Pro, Business & Enterprise

6. Zoom Contact Center

Contact center technologies are mostly optimized for voice. But Zoom Contact center, a new Zoom offering launched in feb 2022 , is an omnichannel contact center platform optimized for channels like video, voice and messaging. Zoom does not reveal pricing for the ‘Zoom Contact Center on its website’, revealing it only to companies who reach out to the Zoom.

Zoom Financials

Zoom’s revenue had been doubling every year since 2017, but the 2021 financial year has proven to be a breakout year for the company. In FY 2021, Zoom’s’ revenue grew almost 4x compared to FY 2020, increasing from $622 million in FY 2020 to $2.6 billion in FY 2021.

Zoom Revenue & Profit from 2017 to 2021

To measure company performance, Zoom measures two key business metrics — customers with more than 10 employees & customers contributing more than $100,000 of trailing 12 months’ revenue — both of which have been recording positive growth.

As of Jan 2020, Zoom had approximately 81,900 customers having more than 10 employees. By Jan 2021, these customers had grown by almost 5x, with Zoom having around 467,100 of them.

After the pandemic, Zoom’s’ customer cohort with 10 or fewer employees expanded as businesses and individuals adopted Zoom. 36% of Zoom’s’ revenue in the year ended Jan 31st, 2021 came from the 10 or fewer employees cohort, compared to 18% in the previous year.

The ‘‘ customers contributing more than $100,000 of trailing 12 months revenue’’ metric represents Zoom’s’ ability to scale with customers & attract larger organizations, acting as a testament to Zoom’s’ growth potential. In the fiscal year Jan 31st, 2021, Zoom had 1644 such customers, more than double the 641 customers it had as of Jan 2020.

As far as geographic distribution of Zoom’s’ revenue is concerned, 69% of it came from America, 13% from APAC & 18% from EMEA in the year ended Jan 31st, 2021.

Zoom Geographical Revenue Breakdown across US, EMEA & APAC from 2019 to 2021

In the future, non-American markets can be expected to be one of Zoom’s’ key areas of growth.

Zoom ended FY 2021 with a profit of $672 million, up exorbitantly from the $25 million profit it made in FY 2020.

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Zoom Business Model: How Zoom Makes Money

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How Does Zoom Make Money? Zoom Freeterprise Business Model

Zoom is a video communication platform whose mission is to “make video communications frictionless.” Leveraging on the viral growth from its freemium model , Zoom then uses its direct sales force to identify opportunities and channel those as B2B and enterprise accounts, thus enabling Zoom to monetize the brands’ growth generated by its freemium. In 2022 Zoom generated over $4 billion in revenue and $1.37 billion in net profits.

Table of Contents

Zoom culture in a nutshell

As pointed out in its financial prospectus Zoom’s culture is about “delivering happiness” which drives its mission , vision , and values.

How does Zoom interpret its “delivering happiness” seemingly empty motto?

Zoom Mission Statement

Our mission is to make video communications frictionless

Indeed, this aspect is critical. Zoom has been able to grow so quickly thanks to its freemium model where it managed to attract a large number of users and convert them into paying customers. Zoom has been able also to distinguish itself for its ease of use and setup, which helped it trigger viral growth . 

Understanding its mission is critical to understand what Zoom prioritizes in developing its products, not only from the engineering standpoint but also from the sales and marketing standpoint. Thus, the word “frictionless” isn’t just a concept, but a mindset that pervades the whole organization.

Zoom Vision Statement

Our vision is to empower people to accomplish more through video communications

Video communication is at the core of what Zoom does. However, its vision is to “empower people.” As a new form of working is on the rise (especially remote working) people need more and more ways to communicate via video. Zoom surfed that way to build a successful company very quickly.

Zoom Values

We care for our community, our customers, our company, our teammates and ourselves

Understanding the values of the organization helps us understand who are the key partners in the Zoom business model .

This is also shown in the way Zoom communicates its product :

We provide a video-first communications platform that delivers happiness and fundamentally changes how people interact.

And its ambition of what the product can achieve:

We believe that rich and reliable communications lead to interactions that build greater empathy and trust. We strive to live up to the trust our customers place in us by delivering a communications solution that “just works.” Our goal is to make Zoom meetings better than in-person meetings .

As you might notice Zoom’s audacious goal is to make “Zoom meetings better than in-person meetings.”

This kind of focus leads product development and helps Zoom employees focus on a single, audacious goal.

The challenge is that of allowing organizations to still build a culture even though it is primarily made of employees working remotely. Therefore, more than just a product , Zoom promotes a movement or a way of thinking.

This is a critical step to understand, as this kind of vision also helps your own customer to better understand the value of the product .

Today, Zoom has reached an incredible scale. 

What makes Zoom different?

While many other digital businesses are launching their video chat applications, some of the factors that helped Zoom gain traction werE:

  • Both Free and Premium, Reliable, high-quality communications
  • Easy to use
  • Easy to deploy and manage

Zoom Competitive Strengths

zoom-competitors

  • Video-first cloud architecture
  • A recognized market leader
  • Viral demand
  • A multipronged go-to-market strategy where the company leverages on its freemium to build a continuous flow of paying customers 

How does Zoom make money?

zoom-revenue

Zoom primarily makes money via its Meetings platform. Around that Zoom has developed a suite of products and features “ designed to give users a frictionless communications experience. “

Users are comprised of two categories:

  • Hosts who organize video meetings
  • And the individual attendees who participate in those video meetings

zoom-products

Zoom products (source: Zoom 10K, 2020)

Zoom enjoys thousands of customers of all sizes across industry verticals and geographies. 

As the company scaled its revenues it also scaled its sales and marketing expenses in an attempt to enable its sales force to convert the continuous streams of accounts using Zoom for free as paying customers.

Yet, over the years Zoom increased its profitability. 

zoom-revenue-per-employee

And also its efficiency!

zoom-revenue-per-employee

This is critical, as it shows that as the company scales its operations, it’s still able to maintain a certain degree of efficiency.

The multipronged go-to-market strategy

Zoom defines its sales model as a “multipronged go-to-market strategy for optimal efficiency.” It starts with “viral enthusiasm” triggered by users as they join the platform for free.

The good experience is channeled by sales efforts to identify customers opportunities, such to transform a non-paying user into an enterprise customer.

For instance, as pointed out by Zoom in its 2019, 10K “ back in 2019, 55% of the 344 customers that contributed more than $100,000 of revenue started with at least one free host prior to subscribing .”

Therefore, the sales model combines the viral demand generation from the free Zoom Meeting plan with direct sales looking for potential customer opportunities.

The Zoom direct sales force includes:

  • field sales
  • inside sales

Those are organized by customer employee count and vertical.

Zoom’s Freeterprise model unveiled

freeterprise-business-model

I like to call the Zoom model a freeterprise, as the company has been able to scale its revenues, by leveraging on a free product (usually working pretty well in the B2C space) yet to acquire B2B/Enterprise customers.

Thus, the freeterprise works as a powerful way to transform free professional single accounts into enterprise accounts.

To do so, the company has to use a sort of barbell strategy , where the free product offering a great experience works as a seamless entry point.

Yet, on the other hand, the highly specialized salesperson (usually field sales) builds a strong relationship to bring the whole enterprise account on board!

Of course, this leads the organization to skew its resources toward building an army of qualified salespeople to handle the volume of leads generated by the free offering (in 2019, Zoom spent 54% of its revenues primarily on salespeople headcounts).

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Zoom Business Model | How Does Zoom Make Money

ZOOM BUSINESS MODEL

Zoom has seen a spectacular rise in terms of user numbers, especially during the trying times of quarantine and social distancing as a result of the global pandemic. Zoom was only known within enterprises and businesses but that has changed. The popularity is all thanks to Zoom’s simple yet effective business model .

Before looking at Zoom’s business model, let’s answer the big question –

What Is Zoom?

Zoom is a remote video conferencing service that was founded in 2011. The company was founded by former Cisco WebEx (Cisco’s video conferencing offering) engineer Eric Yuan and started offering its video conferencing service under Zoom Cloud Video in early 2013.

This SAAS platform allows users to virtually interact with their contacts and other people using video, helping them maintain their workflow even when they are not available physically.

zoom meeting

Zoom allows people to share whatever is displayed on their screen – quite useful, especially for presentations and teachers to show notes – to those within the Zoom meeting room. Speaking of Zoom Meetings, you will be hearing this term quite a lot, which simply refers to a video conference or webinars hosted using Zoom.

Zoom is available for Windows, macOS, Android, iOS, and as integrations for browsers and other video conferencing apps such as Skype for Business.

Right from the get-go, Zoom’s growth has been immense – it reached one million participants within 5 months and 40 million registered users with over 1 billion meeting minutes served in just two years.

Which brings us to –

Zoom’s business model and pricing strategy.

Zoom Business Model

Zoom follows the freemium business model . Zoom offers 4 different subscription plans, one among them being the free plan.

Zoom’s Free plan offers an unlimited 1 to 1 meeting and up to 40 mins of a group meeting with 100 participants. The Free plan is more than enough for the regular users and those looking for a temporary service until things get back to normal with the pandemic. Zoom’s Free plan offers the same features as offered in the paid plans of its competitors.

That is not to say that Zoom is free. You need to pay a fee to obtain additional features such as – increased meeting hours, the ability to add more than 100 participants, support staff, and integration with other services.

Zoom’s model focuses on getting its free users to become paying customers. The freemium model has helped increase the adoption rates as well as boost word of mouth publicity .

Zoom’s Key Partners

Individual users.

Individual users form the core of Zoom’s business and sales. Zoom’s growth has been quite steady and has risen exponentially since it was first launched in 2013.

zoom users

Individual users have also become the backbone of Zoom’s business. Zoom has added more users as of March 2020 than all of 2019 combined. Zoom added 2.22 million monthly active users to its platform, bringing the total users of Zoom to over 12 million. Zoom, as of writing, has enabled more than 200 million to participate in video calls daily.

Business & Enterprises

Business, enterprises, and companies have always been Zoom’s primary target audience. The Zoom platform was initially built mainly for enterprise customers – ranging from large financial service corporations, universities, government agencies, healthcare, and IT companies.

Zoom is adored by its investors, making them one of the most important partners towards Zoom’s operation and success. Zoom has raised over $145.5 million via its series of funding rounds that stretch from 2011-2017.

zoom funding

Zoom was even termed as a unicorn company in early-2017, allowing it to attract $100 million in Series D funding from Sequoia Capital. Zoom filed for IPO in March 2019 and went public on 18 April 2019. By the end of the IPO, Zoom was valued at just under $16 billion (at $36 per share).

Zoom’s Operating Model

Zoom allows its users to –

  • Host & schedule Zoom video conferences with their contacts

start zoom meeting

  • Join a Zoom meeting

join zoom meeting

  • Chat with contacts from within Zoom

zoom chat

This raises the question –

How does Zoom make money if it provides most of its services and features for free?

How Does Zoom Make Money?

Subscription plans.

Zoom earns most of its revenue from offering subscription plans with varying features. As of writing, Zoom offers 4 different subscription plans for its users –

zoom pricing

The Basic plan is free to use and it allows its users to host up to 100 participants in a single meeting (video conference), unlimited 1 to 1 meeting, online support and additional features on video calls, web and group collaborations. The only limitation is that the duration of group video call is limited to 40 mins. Another group call with the same participants can be made only after a cooldown period of 10 minutes. Zoom’s Basic plan is more suited to personal use-cases.

The Pro plan is currently priced at $14 per month and carries over all the features provided by the Basic plan along with added benefits such as – group video call duration increased to 24 hours rather than 40 minutes, the ability to add more than 100 participants for a set fee, integration with Skype for Business and much more.

zoom pro plan

The Pro plan is more suited towards professionals and small teams aiming to collaborate from their desired locations.

Zoom Business

The Business plan is currently priced at $19.99 per month and requires at least 10 members to be present in your team. As the name suggests, this plan is more suited for small to medium businesses. The Business plan carries over the features offered by the Pro plan along with lots of added benefits. The Business plan provides the ability to host video meetings with up to 300 participants by default (with the ability to add more by paying for it), dedicated phone support, custom emails, logins, URLs, domains and admin console.

Zoom Enterprise

The Enterprise plan starts $19.99 per month and requires there to be at least 50 members present in your team. As the name suggests, the Enterprise plan is most suited towards large businesses and enterprises. The Enterprise plan carries over all the features provided by the Business plan while offering newer ones better suited for large teams, businesses and corporations such as – the ability to have up to 500 participants by default, unlimited cloud storage, discounts, and bonuses on other Zoom offerings, analytics, tracking tools, and dedicated support staff.

While Zoom offers most features that an average user might want out of a remote conferencing service for free, it charges for its set of add-ons which help add features such as video webinars, extra cloud recording storage and so on.

zoom add ons

Free users will have to upgrade to Pro plan or higher to be able to access the add-ons. The add-ons are not bundled with the paid tiers and users will have to pay the monthly subscription fee based on the add-on they would like to use. As of writing, Zoom offers various solutions as add-ons under their paid plans and these usually are needed by enterprises and startups to collaborate and be productive such as –

zoom rooms

Zoom charges $49/month/room to allow its users to be able to create dedicated Rooms for holding its conferences.

Zoom Webinars

Zoom users are not able to hold webinars by default and are required to be on Pro (or higher tiers) to be able to hold webinars. Zoom charges a monthly fee that starts at $40/month/host for hosting a webinar with up to 100 participants and goes up to $6,490/month/host for having 10,000 participants.

zoom webinar

Note: The rates mentioned above are for 1 host alone. If you need more than 1 host for the webinar, each new host will cost you around $33.33 on top of the existing rates mentioned above.

zoom webinar pricing

Zoom allows users to be able to make phone calls right within the Zoom app.

zoom phone

Zoom charges $10/month for availing the Zoom Phone add-on.

zoom phone pricing

Apart from that, Zoom provides its US & Canada based users (exclusively as of writing) with the ability to opt for options such as unlimited calling plans, metered calling plans and additional numbers for an added fee.

zoom phone us canada

Bespoke Plans For Certain Industrial Sectors

Zoom also offers a customized suite of its tools and services that is made to order for the following industries:

Zoom’s Rise to Popularity

Zoom took off among the masses when people found Zoom and its free plan satisfied their remote working needs when the coronavirus pandemic which caused the shutting down of all businesses.

But, even before work from home went viral, Zoom had been popular among the enterprise crowd. Zoom was being actively adopted by schools – since Zoom is free of charge till K-12 in lots of countries. This helped increase its word of mouth reach.

Currently, Zoom has also become a social platform of sorts for people during the pandemic. People have started using Zoom to keep in contact with their loved ones, hold parties, and even weddings and ceremonies.

But this raises the question –

The answer to that is quite simple –

  • Zoom’s Free plan – The free plan is almost fully-fledged, offering the same features as its competitors, but for no cost.
  • Reliability – People have come to like the simplistic and intuitive user interface. But most of all, they all have stuck with Zoom for one reason – “because it just works!”
After about 10 back to back video calls, seeing massive difference in reliability. Stack ranking: 1. Zoom (by far the best) 2. Facetime Video (for 1:1) 3. G Meet/Hangout/Suite/whatever it is called now 4. Audio by traditional phone 5. WhatsApp Video (for India mostly) 6. BJN — Sriram Krishnan – sriramk.eth (@sriramk) March 10, 2020
  • Low Latency – Zoom’s videos try to stay under 150 milliseconds – since it is after 150 milliseconds that a conversation starts to feel unnatural – by optimizing the connection on per-device basis instead of focusing on the worst ones in the loop.

Why Zoom Works!

Over time, Zoom has managed to capture a large audience for itself by offering solid features and much-needed features for free for the general users while those looking for additional integrations and added features (usually enterprise or business use-cases) have to pay for them.

The user base is so large that even a fraction of them opting to pay for Zoom’s paid plans and add-ons helps it covers its operating cost as well as earn revenue.

Apart from the add-ons, Zoom also has its own App Marketplace (maintained by Zoom) from which users can install thrid-party applications to integrate with their Zoom services and workflow without much hassle. As of writing, there are no paid apps on the store, but Zoom could very well introduce paid versions of the apps which unlocks additional features to add it to their growing revenue stream .

Go On, Tell Us What You Think!

Did we miss something? Come on! Tell us what you think about our article on  Zoom Business Model in the comments section.

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Maybe you never used it — or never heard it from Zoom — until the beginning of 2020. However, the Zoom Business Model became the lifeline of many entrepreneurs in the early months of that year, when we were facing social isolation due to the COVID-19 pandemic. This video communications company has been essential for people and teams to be able to talk to each other, even if each member is speaking from different locations and devices. This has allowed group activities, such as meetings, classes, training, and even some events such as lectures, to take place, without any major losses. Due to its convenience, Zoom has seen an excessive growth in the last few months, as the number of users has multiplied exponentially. And of course, if we are talking about a company whose business model is based on users, if that number has grown enormously, you can be sure that this is also true with regard to the company’s income.

But, after all, how does the Zoom business model work — and why has its popularity increased so much compared to similar products on the market?

As the company’s website defines:

Zoom is an easy, reliable cloud platform for video, voice, content sharing, and chat runs across mobile devices, desktops, telephones, and room system (that) helps businesses and organizations bring their teams together in a frictionless environment to get more done.

It is a remote video conferencing system, founded in 2011, by Eric Yuan. Yuan was the engineer for Cisco WebEx, also a Cisco videoconferencing product. However, when he realized that his product was not being well used by the company and was not pleasing users, he chose to leave the company and found Zoom.

This SaaS platform allows users to interact using cameras and microphones from devices connected to the internet — computers, smartphones, tablets — and also permits users to share everything on their screens with each other, improving the experience in project meetings, presentations, and classes, for example.

The Zoom founder, Eric Yuan, is still up today, the Chairman and CEO. Completing the main board members of the company, there’s Kelly Steckelberg as the CFO and Janine Pelosi as the CMO.

Mission Statement

To develop a people-centric cloud service that transforms the real-time collaboration experience and improves the quality and effectiveness of communications forever

Business Model

Zoom applies the freemium business model. In other words, it uses a monthly subscription system as a revenue stream (there are four different paid plans for meetings), but it also offers a free option, that is, at no cost, with more limited resources. Its main resources are online meetings. The plans are:

Zoom Basic : It is a free plan. Although it offers unlimited meetings and also an unlimited time in a video call between two users, group calls cannot exceed 40 minutes uninterrupted. And there can only be a new call after 10 minutes. In other words, the free plan is aimed at the individual user, who wants to use the tool only as a substitute for the regular phone call, for example;

Zoom Pro : This plan is aimed at small teams — or individual entrepreneurs, such as teachers and coaches. At $149.90 a year, video calls can take place among up to 100 participants, with a 30-hour time limit per call. In addition, it offers features such as personalized ID, reports, Skype integration, and cloud recordings of up to 1 GB;

Zoom Business: With each license of $199.90 a year (starting at 10 licenses for $1,999/year) this plan has all the features of the Pro, for up to 300 simultaneous participants. Aimed at medium-sized businesses, it includes features such as telephone support, personalized emails, logins, URLs, and an administrator panel, among others;

Zoom Enterprise: In this plan, each license is $240.00 a year, starting at 50 licenses for $12,000/year. It is developed for large companies since it enables at least 500 participants. In addition, it offers unlimited cloud storage, dedicated support staff, and discounts on other extra software benefits;

Zoom Business United: With each license at $350.00 per year, and a minimum of 10 (at least, $3,500/year), this plan sums up Zoom Meetings and Zoom Phone.

Besides Zoom Meetings, the platform also offers other resources, such as Zoom Phone, Zoom Video Webinar, and Zoom Rooms, with different plan options.

In summary, the Zoom business model seeks to transform free users into paying consumers. Because subscribers start with the Basic model, at no cost, but realize that their experience can be much better if they hire a paid plan. As the rates are not exorbitant, it is easy for the user to opt for the upgrade.

Customer Segments

Worldwide internet user

Business users (Enterprise, Education, Govt, Healthcare)

Value Propositions

Free video conferencing that works well

Video Conferencing with longer duration and professional features

Website (zoom.us)

Zoom app (mobile and desktop)

Customer Relationships

Self-service

Customer support (phone and chat)

Revenue Streams

Subscription Plans

Key Resources

Zoom platform

Proprietary video (Compression Codec)

Key Activities

  • Platform development and maintenance

Key Partners

  • Calendar apps

Cost Structure

  • Human resources

Zoom Currently

Although the company was founded in 2011, the tool was launched on the market in 2013. Since then, the number of users has grown year after year, always allowing the company to end the periods with a very positive balance. However, nothing compares to recent figures. In March 2020 alone, Zoom got more subscribers than the entire year of 2019. This, of course, is due to the COVID-19 pandemic, which forced people to find ways to work from inside their homes.

There were 2.22 million users in one month — reaching a figure above 12 million subscribers, with more than 200 million people participating in video calls daily. But, in addition to individuals and companies, educational organizations, health institutions, government agencies and so many others that have taken advantage of Zoom’s features, the company also has investors. Since 2011, Zoom has raised more than $145 million in investment rounds, becoming a unicorn in early 2017. Today, it is valued at over $16 billion. It is clear that Zoom had a completely unexpected boom, out of the curve, as a result of the coronavirus pandemic that alarmed the planet. However, the company’s development was stable, always progressing, annually, both in the number of users and final revenue. Zoom was already well regarded among the corporate community, being the favorite among similar tools, which include Skype, Google Meet, and the latest Teams, from Microsoft (now, the market leader).

This is due to some important factors. First, its free version, the plan to attract new users, manages to deliver value. Although simpler, it guarantees a good experience, even if in less time. And second, because of the quality of the service provided. Zoom manages to keep the videos of good quality and its interface is very simple and user-friendly. In short, everything works, from the beginning. Even for that user who has come to the platform just to keep in touch with the people they love and those who need to keep away.

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Zoom Business Model and How it Makes Money

Zoom

Zoom has recently become a well-known app in the technology industry. The app’s popularity has come due to the recent COVID-19 pandemic. Due to the limits put on physical contact, most businesses and individuals needed a solution that allowed them to collaborate and meet online. Zoom’s product was the perfect solution for their needs.

Zoom was founded in 2011. However, it wasn’t until late 2012 that the company launched its online app and platform. The company also went public in 2019, getting a valuation of $16 billion by the end of the first trading day. Zoom had many high-profile clients, such as the University of Stanford. However, it experienced a significant surge of new customers during the pandemic.

Zoom reported 200 million+ daily meeting participants recently compared to the 10 million in December 2019. Similarly, the app broke many records on various app stores for the most downloaded app. Due to the significant increase in the downloads and customer count, Zoom also generated significant revenues. Zoom’s business model was the centre of attention for many.

Zoom’s business model has allowed it to be a profitable business. However, most people wonder what Zoom’s business model is and how it makes money. Given below is a description of both of these.

What is Zoom’s Business Model?

Zoom’s business model is straightforward and something that has existed for a long time. Zoom uses a freemium business model . With this model, companies provide products and services for free. However, they put specific limits on their products, after which customers have to pay. The freemium business model is highly successful in the technology industry.

Zoom offers customers a free plan. Through this plan, customers can have unlimited one-to-one meetings. The limit on the app comes for group meetings, where it only allows 40 minutes of meetings with up to 100 participants. For most customers, the free plan may be enough to benefit from the app’s features.

However, most corporate and professional clients may use the paid features that increase the limits for usage. For example, schools, colleges, and universities using the app pay to use the professional features. Through this, Zoom makes a significant amount of money. In this aspect, Zoom uses a subscription-based model, where customers have to pay a monthly fee to use the app.

Zoom’s business model is highly dependent on its number of users. The more users that use the app, the more Zoom can make money. Due to the recent influx of users to the platform, Zoom’s profitability has increased significantly. Zoom made revenues of only $2.651 billion in 2021. However, the app significantly improved its revenues in 2022.

In 2022, Zoom generated revenues of $4.099 billion (As of 31 January 2022). It was a staggering increase of 55% over the revenues generated in 2021. It was before the pandemic, which shows the app was successful before the pandemic. However, it was also the same year as the company went public. So, some experts believe that it may have had an impact on the revenues.

Similarly, Zoom generated revenues of $2.651 billion in 2021. While it was a significant increase of 326% from 2020. Compared to 2018, the company increased its revenues by more than five times. The significant increase in profits was primarily due to the rise in the number of users.

Lastly, the company experienced almost double revenues in each quarter of 2020. Given below is a summary of Zoom’s quarterly revenues in the last two years.

How Does Zoom Make Money?

Zoom earns its revenues from several sources. It provides its customers with different plans and packages from which they can choose. Zoom does not make money from its free features. Unlike other apps that use the freemium model, Zoom does not display ads on its app. Therefore, it cannot generate any ad revenues. However, the free version of the app does a great job of showing its features and attracting new users.

Zoom makes money from its paid services. These include the following plans and packages.

Subscription Plans

Zoom has four different subscription plans through which it earns money. The company has its basic plan where it does not charge anything from its customers. As mentioned, it allowed unlimited 1-to-1 meetings, 40 minute limit on group meetings, up to 100 participants, and some other basic features.

The second plan is the pro plan. Zoom charges its customers $149.90/year/license from its customers. The pro plan includes up to 30 hours of group meetings, social media streaming, 1 GB cloud recording per license, and up to 1,000 participants with large meetings. It also includes better support compared to basic users.

Zoom Business

The next plan is for small and medium businesses. It can host up to 300 participants and increase the limit to 1,000 with a large meetings add-on. It includes other features such as recording transcripts, managed domains, company branding, single sign-on, and all pro-plan features. This plan costs $199.90/year/license.

Zoom United Business

The next plan is the Zoom United Business plan. This plan costs $350/year/license. Similarly, it includes all the features that come with other plans. On top of that, it includes Zoon United Pro phone features, unlimited calling within global select, optional add-ons. It also has meeting features such as host meetings of up to 300 participants and other features.

Zoom Enterprise

Zoom enterprise is Zoom’s largest plan for customers. IT costs $240/year/license. It includes all features available in the other plans. It also includes meetings that can host up to 500 participants, unlimited cloud storage, a dedicated customer success manager, and other custom features. It also includes executive business reviews and bundle discounts.

Zoom Enterprise Plan

Zoom Meetings Add-Ons

Add-ons are features that are not a part of the Zoom subscription plans. These add-ons allow users to increase their limits or order other features without paying for higher plans. These include features such as video webinars or increasing group meeting participant limits. These add-ons are only available to pro and business plan users.

Free users can’t get these add-ons. Similarly, higher plans already have most features included and may not need to order them separately. Add-ons also come with a monthly subscription plan.

Zoom Meeting Add-on Plans

Zoom also provides phone plans to users. These include four tiers of paid plans. With the phone feature, customers can receive features, such as a US & Canada or a direct dial number. They can also call domestic or international numbers based on the plan they choose. Zoom Phone also comes with SMS and MMS features.

It also includes other features such as advanced phone features, making and receiving calls from multiple devices, unlimited calls and much more. Customers have to pay for this package in addition to the Zoom Meeting plan. Zoom phone plans include $120, $180, $240 and $350 plans per year per license. Given below is a summary of the plans.

Zoom Phone Plans

Zoom Phone Add-Ons

Zoom Phone also comes with add-ons. These include International Calling Add-On for $120 per year. Similarly, it allows additional phone numbers, which start at $60 per year. As with the meeting add-ons, customers have to be subscribed to a licensed plan to use these.

Zoom Phone Add-ons

Zoom Video Webinar

Zoom also has a video webinar feature that lets hosts conduct online webinars. It allows various features such as interactive video panellists, Q&A feature, in-webinar text-chat, polling, muting options, performance reports, etc. It also has several other features that allow both the hosts and participant more flexibility in their options. Given below is a list of all the features for the Video Webinar feature.

Zoom Video Webinar

The Zoom Video Webinar features allow the app to earn more than any other plans or features. There are six different plans for users to choose from based on the number of attendees they expect. The plans start from $400/year/license for 100 attendees up to a whopping $64,900/year/license for 10,000 attendees. Zoom also offers bigger plans. However, customers have to get in contact with the team to get custom prices.

Given below is all the plans for the Zoom Video Webinar feature.

Zoom Video Webinar Plans

Zoom Video Webinar Add-Ons

Like other features, users can also choose from different add-ons for the video webinar plan. These include an Audio plan at $1200 per year and cloud storage at $480 per year. Here’s the summary.

Zoom Video Webinar Add-on

Zoom also has rooms features, which allows easier meeting solutions. It has a 30-day trial plan that users can use for free. However, after that, users must pay $499/year/room and purchase up to 49 Zoom Rooms license. They can also get better enterprise solutions by contacting support. A list of all the features for Zoom Rooms is as below.

Zoom Rooms

Zoom Room Add-Ons

Zoom Rooms has three add-ons. These include conference room connector, hardware as a service and professional services. Given below is a summary of these add-ons.

Zoom Rooms Add-on

Zoom United

Zoom also bundles various packages into one through its Zoom United plan. The prices may be different from other packages. However, it allows customers to order several Zoom plans for lower prices. Here is a summary of the Zoom United plans that customers can get.

Zoom United

Zoom United Add-Ons

Zoom United also comes with add-ons. These include international calling and additional phone numbers, same as for Zoom Phone plans.

Zoom United Add-on

Zoon is an online video conference and collaboration tool. The app gained significant popularity during the pandemic. While Zoom uses a freemium business model, it still makes income. The primary source of income for the app is through its subscription plans. These include Zoom Meetings, Zoom Phone, Zoom Video Webinar, Zoom Rooms and Zoom United. Zoom also has several add-ons for each of these packages for which customers have to pay.

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Zoom Video Communications: Business Model, SWOT Analysis, and Competitors 2023

Inside This Article

Zoom Video Communications has become a household name in the world of video conferencing, especially in the wake of the COVID-19 pandemic. The company's cloud-based platform has enabled remote work and virtual meetings to take place seamlessly. But what is the business model behind this success, and how has Zoom managed to maintain its competitive edge? In this blog post, we will conduct a SWOT analysis of Zoom, explore its business model, and take a closer look at some of its key competitors as we head towards 2023.

What you will learn:

  • You will learn about the ownership of Zoom Video Communications, including who founded the company and who currently owns it.
  • You will discover the mission statement of Zoom Video Communications and what the company aims to achieve.
  • You will understand the business model of Zoom Video Communications, how the company generates revenue, and how it differs from its competitors. Additionally, you will learn about the Zoom Video Communications Business Model Canvas and its key components. Finally, you will explore the SWOT analysis of Zoom Video Communications to identify its strengths, weaknesses, opportunities, and threats in the market.

Who owns Zoom Video Communications?

Zoom Video Communications is a publicly traded company, meaning that it is owned by its shareholders. The company's shares are traded on the NASDAQ stock exchange under the ticker symbol "ZM". As of June 2021, Zoom had a market capitalization of over $100 billion, making it one of the most valuable companies in the world.

The largest shareholders of Zoom are institutional investors, such as mutual funds, pension funds, and hedge funds. For example, as of March 2021, the Vanguard Group, BlackRock, and Fidelity Investments were among the top institutional holders of Zoom stock.

However, it's worth noting that the company's co-founder and CEO, Eric Yuan, still holds a significant stake in the company. According to SEC filings, Yuan owns over 20 million shares of Zoom, which represents roughly 6% of the company's outstanding shares.

Zoom's ownership structure is typical of many large technology companies that have gone public in recent years. While the company is technically owned by its shareholders, the founders and early investors often retain a significant amount of control over the company's direction and strategy.

Overall, Zoom's ownership structure reflects its status as a rapidly growing and highly successful technology company. As the company continues to expand and innovate, it's likely that its shareholder base will continue to evolve and shift over time.

What is the mission statement of Zoom Video Communications?

Zoom Video Communications is a company that has been widely recognized for its video conferencing software, which has become increasingly popular in recent years. The company's mission statement is based on its commitment to providing a platform that facilitates seamless and effortless communication, regardless of physical location or communication device. The company's mission statement is simple, yet powerful: "Our mission is to make video communications frictionless."

At the core of Zoom's mission is the belief that video communication should be easy, reliable, and accessible to all. This is reflected in the company's focus on simplicity, ease of use, and the development of features that enhance the user experience. For example, Zoom's platform is designed to be user-friendly and intuitive, with features such as screen sharing, virtual backgrounds, and breakout rooms that make it easy for users to collaborate and communicate effectively.

In addition to its focus on user experience, Zoom's mission statement emphasizes the importance of innovation and continuous improvement. The company is committed to staying ahead of the curve in terms of technology and features, and to constantly exploring new ways to enhance the video communication experience. This commitment is reflected in the company's investment in research and development, as well as its close partnerships with leading technology companies.

Overall, Zoom's mission statement reflects the company's commitment to providing a video communication platform that is accessible, easy to use, and continuously evolving to meet the needs of its users. This mission has been the driving force behind the company's success, and it is likely to continue to guide its growth and development in the years to come.

How does Zoom Video Communications make money?

Zoom Video Communications is a cloud-based video conferencing platform that has become increasingly popular in recent years, especially due to the COVID-19 pandemic and the rise of remote work. While it offers a free version of its software, Zoom does make money through a variety of different revenue streams.

One of the main ways that Zoom generates revenue is through its subscription plans. The company offers a tiered pricing structure, with different levels of functionality depending on the plan. For example, the basic plan is free and allows for up to 40 minutes of group meetings, while the Pro plan costs $14.99 per month and offers unlimited meeting time and additional features like user management and reporting. The Business and Enterprise plans offer even more advanced features and customization options, with prices ranging from $19.99 to $19.99 per month per host.

In addition to its subscription plans, Zoom also makes money through its add-on features. For example, the company offers a Zoom Rooms package that allows businesses to set up dedicated conference rooms with hardware and software that is optimized for Zoom meetings. It also offers a Zoom Phone service that allows users to make and receive phone calls directly from the Zoom platform.

Another way that Zoom generates revenue is through its partnerships and integrations. The company has partnered with a variety of other software providers to integrate its video conferencing platform with other tools like Slack, Salesforce, and Microsoft Teams. These partnerships not only help to expand Zoom's reach, but also provide additional revenue opportunities through referral and integration fees.

Finally, Zoom also generates revenue through its advertising platform. The company offers targeted advertising opportunities to businesses and organizations that are looking to reach its user base. While this is a relatively small part of Zoom's overall revenue stream, it does provide an additional source of income for the company.

Overall, Zoom's revenue model is based on a combination of subscription plans, add-on features, partnerships and integrations, and targeted advertising opportunities. As the demand for remote work and virtual communication continues to grow, it's likely that Zoom will continue to find new ways to monetize its platform and expand its reach.

Zoom Video Communications Business Model Canvas Explained

Zoom Video Communications has become a household name during the pandemic as it has emerged as the go-to platform for virtual meetings, webinars, and online events. But have you ever wondered how Zoom makes money? In this section, we will explain Zoom's business model canvas and how it generates revenue.

Value Proposition: Zoom's value proposition is simple yet effective - it offers a reliable and user-friendly platform for video conferencing, webinars, and virtual events. Zoom's video and audio quality is superior to other platforms, and it offers a range of features such as screen sharing, recording, and virtual backgrounds.

Customer segments: zoom targets both individuals and businesses of all sizes. its free plan allows individuals to host virtual meetings for up to 40 minutes, while its paid plans cater to businesses and organizations that require longer meetings and more advanced features., channels: zoom's primary channel is its website, where users can sign up for a free or paid plan. the platform also uses content marketing, social media, and email marketing to reach its audience., customer relationships: zoom focuses on building strong customer relationships through its excellent customer support. it offers 24/7 support via chat and email, and its customer success team works with businesses to ensure they are utilizing the platform effectively., revenue streams: zoom's revenue streams come from its paid plans. it offers four different plans, ranging from $14.99 to $19.99 per month per host, depending on the features and number of participants required. zoom also generates revenue from its webinar and virtual event platform, which is priced based on the number of attendees., key activities: zoom's key activities include software development, marketing, customer support, and infrastructure maintenance. the company continuously updates its platform to improve performance and add new features., key resources: zoom's key resources are its technology, infrastructure, and human resources. its platform is built on a cloud-based infrastructure, which allows for scalability and reliability. the company also has a team of engineers and developers who work on improving the platform., key partners: zoom's key partners include video conferencing hardware providers, such as poly and logitech, who offer hardware solutions that integrate with zoom's platform. the company also partners with software providers, such as salesforce and dropbox, to offer integrations with their platforms..

In conclusion, Zoom's business model canvas is centered around providing a reliable and user-friendly platform for video conferencing, webinars, and virtual events. By offering a range of features and pricing plans, the platform has become the go-to solution for individuals and businesses alike. Zoom's revenue streams come from its paid plans and its webinar and virtual event platform, and it focuses on building strong customer relationships through its excellent customer support.

Which companies are the competitors of Zoom Video Communications?

Zoom Video Communications has seen a significant rise in popularity since the outbreak of the COVID-19 pandemic, as people have turned to video conferencing solutions for remote meetings, online classes, and virtual events. However, Zoom is not the only player in the video conferencing market. Here are some of the competitors of Zoom Video Communications:

Microsoft Teams: Microsoft Teams is a collaboration platform that includes video conferencing capabilities. It has gained popularity among businesses and schools due to its integration with other Microsoft products, such as Office 365. Microsoft Teams offers similar features to Zoom, such as screen sharing, virtual backgrounds, and chat.

Google Meet: Google Meet is a video conferencing tool that is part of the Google Workspace suite of productivity apps. It offers features such as screen sharing, virtual backgrounds, and closed captions. Google Meet has gained popularity among educators due to its integration with Google Classroom.

Cisco Webex: Cisco Webex is a video conferencing platform that is popular among businesses. It offers features such as screen sharing, virtual backgrounds, and whiteboarding. Cisco Webex is known for its security features, such as end-to-end encryption and password-protected meetings.

Skype: Skype is a video conferencing solution that has been around for a long time. It offers features such as screen sharing, virtual backgrounds, and chat. Skype is popular among individuals and small businesses.

GoToMeeting: GoToMeeting is a video conferencing platform that offers features such as screen sharing, virtual backgrounds, and drawing tools. It is popular among businesses due to its integration with other productivity tools, such as Salesforce and Microsoft Office.

In conclusion, Zoom Video Communications is not the only player in the video conferencing market. Microsoft Teams, Google Meet, Cisco Webex, Skype, and GoToMeeting are some of the competitors of Zoom. Each of these platforms offers unique features and benefits, so it's essential to evaluate them carefully before choosing the best one for your needs.

Zoom Video Communications SWOT Analysis

SWOT analysis is a strategic planning tool used to identify the strengths, weaknesses, opportunities, and threats of a company. Here's how Zoom Video Communications stacks up:

User-friendly platform: Zoom's easy-to-use platform has made it a popular choice among users, even those who are not tech-savvy.

Versatile features: Zoom offers a wide range of features, including screen sharing, virtual backgrounds, and recording options, allowing users to customize their video calls according to their needs.

Integration with third-party apps: Zoom integrates seamlessly with other apps such as Slack, Salesforce, and HubSpot, making it easy for users to schedule and join meetings.

Robust security measures: Zoom has implemented several security measures to protect users' privacy, including end-to-end encryption, waiting rooms, and password protection.

Weaknesses:

Security concerns: Despite the security measures Zoom has put in place, the platform has faced several security issues in the past, including "Zoom-bombing" and data breaches.

Reliability issues: Zoom has experienced occasional reliability issues, such as outages and connectivity problems, which can be frustrating for users.

Limited customer support: Zoom's customer support has been criticized for being slow to respond to user complaints and requests for help.

Opportunities:

Expansion into new markets: Zoom has the potential to expand into new markets, such as healthcare and education, which have seen increased demand for video conferencing solutions.

Continued growth in remote work: As more companies adopt remote work policies, the demand for video conferencing platforms like Zoom is likely to continue to grow.

Acquisition of new technology: Zoom could acquire new technology to enhance its platform's features and capabilities, such as AI-powered virtual assistants or augmented reality tools.

Increased competition: Zoom faces stiff competition from established players like Microsoft Teams and Google Meet, as well as newer entrants like Slack and Facebook's Workplace.

Economic downturns: Economic downturns can lead to budget cuts, which could impact businesses' ability to pay for video conferencing solutions.

Regulatory challenges: Increased regulatory scrutiny could lead to stricter data privacy and security regulations, which could impact Zoom's ability to operate in certain markets.

Key Takeaways

  • Zoom Video Communications is a publicly traded company, with a majority of its shares owned by institutional investors.
  • The mission statement of Zoom Video Communications is to "make video communications frictionless and secure."
  • Zoom Video Communications primarily makes money through subscription fees for its various plans and services.
  • The company's Business Model Canvas includes key partners such as hardware and software providers, as well as channels including direct sales and online marketplaces.
  • Competitors of Zoom Video Communications include other video conferencing platforms such as Microsoft Teams and Cisco Webex, as well as communication tools like Slack and Google Meet.
  • A SWOT analysis of Zoom Video Communications highlights strengths such as its user-friendly interface and weaknesses such as potential security concerns, as well as opportunities for growth in expanding its services and threats from increasing competition in the market.

In conclusion, Zoom Video Communications is a leading video conferencing platform that has revolutionized the way people communicate and collaborate remotely. Founded by Eric Yuan, the company's mission statement is to make video communications frictionless, secure, and reliable for everyone. Zoom generates revenue primarily through subscription fees for its various plans and add-ons. The company's business model canvas includes key elements such as customer segments, value propositions, channels, relationships, revenue streams, key activities, key resources, and key partners. Despite its success, Zoom faces stiff competition from companies such as Microsoft, Google, Cisco, and others. Finally, a SWOT analysis of Zoom reveals its strengths, weaknesses, opportunities, and threats, which the company needs to address to maintain its leadership position in the video conferencing market.

What are the weaknesses of Zoom?

Security and Privacy Concerns: Zoom has been criticized for its data security and privacy practices. It has been reported that Zoom’s encryption practices are not up to par with industry standards and that the platform is vulnerable to “zoom bombing”, where uninvited guests can join private meetings.

Limited Support for Third-Party Apps: Zoom does not support integration with third-party applications. This means that users cannot access other applications while using Zoom.

Difficulty Managing Multiple Participants: Zoom can be difficult to manage when there are too many participants in a meeting. It can be difficult to monitor who is speaking and who is not, and it can be difficult to keep track of who is in the meeting.

Lack of Advanced Features: Zoom does not offer some of the more advanced features that other video conferencing solutions offer such as screen sharing, whiteboarding, and file sharing.

What is SWOT analysis in communication?

SWOT analysis is a tool that helps analyze the Strengths, Weaknesses, Opportunities, and Threats of a communication situation and is often used in strategic planning. It is a way to evaluate the potential success or failure of a communication effort. By taking into account all of the different factors that can affect the communication process, a SWOT analysis provides a comprehensive view of the challenges and opportunities that lie ahead.

What are the disadvantages of Zoom in communication?

Security and Privacy Concerns: Zoom is not as secure as some other video conferencing apps. It has faced security breaches in the past, which has led to concerns about privacy.

Limited File Sharing Capabilities: Zoom's file sharing capabilities are limited, which can be a problem for teams that need to collaborate on documents and other files.

Limited Integration with Other Apps: Zoom doesn't integrate well with other apps, which can be a problem for teams that need to collaborate with other applications.

Limited Number of Participants: Zoom has a limited number of participants that can join a conference. This can be a problem for larger teams or meetings.

Potentially Poor Video Quality: Video quality can suffer if users don't have a good internet connection or if their computer isn't powerful enough.

What are the benefits of Zoom in communication?

Increased Connectivity: Zoom allows for more people to join in on a meeting or conversation than ever before. This makes it easier to stay in touch with colleagues, family, and friends, both locally and internationally.

Cost Savings: Rather than spending money on travel or phone bills, Zoom allows you to communicate with people all around the world for free.

Improved Collaboration: Zoom provides multiple tools that make working together easier, such as group chat, video conferencing, file sharing, and screen sharing.

Increased Productivity: With Zoom, you can set up meetings quickly and easily without any hassle. This helps to save time and get more work done faster.

Increased Engagement: Zoom allows for more personal interaction, which helps to keep participants engaged in the conversation.

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Zoom’s Growing Ambitions in the Business Communications Market

Since the launch of its first product, Zoom has morphed considerably from a cloud video conferencing provider to its current, fast growing focus on end-to-end enterprise communications. Zoom’s strategy of building a strong, well-functioning core, i.e. its wildly successful video meetings business, and using it as a base to expand into many adjacencies is playing out well.

Since the launch of its first product, Zoom has morphed considerably from a cloud video conferencing provider to its current, fast-growing focus on end-to-end enterprise communications. Zoom’s strategy of building a strong, well-functioning core, i.e., its wildly successful video meetings business, and using it as a base to expand into many adjacencies is playing out well. After seeing strong growth for Zoom Meetings, Zoom Rooms, and Zoom Webinar, Zoom leaped into voice calling last year with Zoom Phone. In addition, Zoom’s recently announced investment in  Neat , a video appliance startup, signals a multi-directional effort that could eventually find Zoom offering all the pieces of the business communications and collaboration stack. And that’s quite an ambitious leap.

Moving Beyond the Core

For the quarter ending July 31, 2019, Zoom reported revenue growth of 96% over the same quarter last year. While continuing to report impressive revenues, Zoom’s top-line growth rate is declining. It is evident that the company must aggressively accelerate expansion within enterprise customers.

what is the business model of zoom

Zoom’s roots are in its freemium service, which disrupted the meetings market and became popular due to its simplicity and user experience. Today, Zoom has a vast and loyal customer base among SMBs, verticals like education and healthcare, and teams of users within large organizations that have adopted Zoom as part of the growing BYOD movement. While best of breed will continue to thrive in businesses of all sizes, IT decision-makers in large enterprises want to invest in a comprehensive business communications portfolio that has the fewest moving parts. More and more enterprise IT buyers are seeking a single solution for their telephony, collaboration, and contact center needs. It’s a challenge that Zoom faces when going upmarket against the tech giants Cisco and Microsoft.

As of July 31, Zoom reported that it had approximately 66,300 customers with more than 10 employees. Of those, 466 customers (or less than one percent of its customer base) spent $100,000 or more in the previous 12 months. This group of customers brings in 30% of its revenue, validating Zoom’s growing quest for a higher upmarket mix. The long tail of customers that bring in less than $100,000 represents a big upsell potential for Zoom, an opportunity it is targeting with a stronger Zoom Phone offering. With a fast-growing feature set and wider geographic availability, Zoom Phone is now becoming a legitimate UCaaS contender and the linchpin to the company’s growth strategy. Zoom has announced more than 2,000 paid accounts and some sizeable wins (one customer has over 10,000 seats). Zoom’s primary strategy has been to land Zoom Phone deals among existing customers. It is now starting to see net new wins for Zoom Phone. Combined with Zoom’s evolving strategy for meeting room devices, Zoom Phone will be the mainstay of its growth in 2020.

Video Conferencing Cloud Plus Device: When One Plus One is Greater Than Two

2019 finally saw the emergence of the video-first enterprise. Meeting rooms, in particular, are becoming pivotal to workplace transformation. For some time, meeting rooms were one of the most outdated and underutilized business assets, but that’s quickly changing. Modern businesses are focused on revamping meeting spaces of all sizes from phone booths, meeting pods, huddle rooms, to mid- and large-sized conference rooms, turning them into collaboration hotbeds. Open offices can be disruptive and are creating unprecedented growth in huddle rooms, which represent the fastest-growing segment of the video conferencing market.

According to Frost & Sullivan’s  2019 Global Huddle Room Video Conferencing Market research :

  • There are 33.3 million huddle room spaces worldwide and only 2.8% are enabled for video conferencing.
  • Huddle room video meetings will grow from less than 18% to more than 73% of all room video meetings in just five years.
  • Huddle room units will grow 5x and revenue will almost quadruple by 2023.

2019 has also been the year of the modern meeting room appliance—turnkey appliances that are tightly integrated and configured specifically for leading cloud services. Typically priced at less than $2,000, these purpose-built appliances run a dedicated client for cloud services like Zoom to deliver a significantly better experience than integrated kits or BYOD options. When deployed in huddle rooms, they solve several pain points. By bringing together all the hardware, software and a natively integrated cloud service, they are easier to deploy and use compared to the alternative: pieced-together multi-vendor components, requiring IT to install meeting software and self-manage all of the configuration, administration, and security settings. Zoom’s recently launched Appliance Program with  Poly ,  DTEN  and  Neat brings customers a wide variety of meeting room appliances to choose from, with assured compatibility and ease of use.

With Neat, Zoom takes the single device and cloud service advantage a step further. Neat was formed in February 2019 after an invitation from Zoom CEO Eric Yuan to design devices specifically for Zoom Rooms. While other Zoom partners have built devices with native Zoom Room integration, from the outset they were building the hardware as a platform that satisfies the requirements of multiple cloud partners. In contrast, Neat has looked into all the details of how the Zoom Room operates and has designed its appliances to accentuate features and capabilities that are unique to Zoom Rooms. For example, Zoom uses ultrasonics to pair personal devices with the Zoom Room. Neat has built a dedicated ultrasound tweeter into its video bar for better and more reliable ultrasonic coverage in the Zoom Room. Similarly, the Neat display takes into account the need to be both a tabletop display for room control as well as a wall-mounted display for scheduling. These details are expected to make the Neat solutions perform incrementally better when paired with Zoom Rooms.

The varied go-to-market and sales approaches of Zoom’s many device partners will serve distinct market segments. Poly’s broad audio-video device portfolio and its strong channel program fulfill enterprise customers’ demand for end-to-end solutions paired with service and support. Neat, on the other hand, offers a path for Zoom’s many low-spending customers (including unpaid subscribers) to invest in affordable out-of-the-box room solutions through a direct sales model. Zoom ensures it’s covering all its bases for a broader market reach.

Broad industry trends such as growing interop are further leveling the playing field for all, including Zoom, to get a better foothold with enterprise customers. An announcement this week at  Microsoft Ignite  that Microsoft is opening up interop will enable Teams Room users to natively join meetings on Cisco Webex and Zoom via browser-based technologies. Microsoft is working with Cisco and Zoom to enable a direct guest join capability from the respective video conferencing devices to the video meeting service using the web app. We see this as a necessary survival move for all vendors so they are not excluded from the mix when IT is forced to make an either/or decision.

Zoom’s unwavering focus on user experience (UX) and making video meetings simple has clearly been its advantage. However, as competition catches up and as the UX reaches a level of maturity, Zoom is now focusing on every aspect of the customer experience (CX). CX is the sum of all the engagements a customer has with a business throughout the customer life cycle. That means not only should the technology be easy to use, but it should be equally easy to procure, deploy and manage. Zoom’s Appliance Program equips its sales force to sell solutions better using an infinitely configurable open hardware ecosystem. As IT looks at deploying video everywhere, a single tightly integrated hardware, software and service solution that can be turned on with the flip of a switch leads to “better together” outcomes.

AI at the Forefront

Zoom’s continued progress on AI is further proof of its commitment to improving the experience for its users. Zoom is tapping into many aspects of AI that make meetings smarter. After launching Machine Learning-based recording transcripts and virtual backgrounds, Zoom has added a host of other capabilities to its platform. Many of these AI features are more than bells and whistles and address long-standing user behavior issues that have impeded adoption. Features include:

  • A simultaneous interpretation capability that enables people from different geographies to come together on the same call and have productive conversations.
  • Real-time transcription and voice notetaking, powered by Otter.ai, which allows users to take meeting notes within the Zoom interface. Customers don’t want to treat meetings as a one-and-done event and transcription addresses post-meeting content issues. Making the transcripts searchable and taggable adds further value.
  • Video backgrounds that offer a more realistic experience than static virtual backgrounds. They address user concerns about not wanting to get on camera with cluttered backgrounds or when they are in public locations like airports, which cause distractions, ultimately taking away from the meeting experience.

The list of AI possibilities keeps growing. An area where we expect to see significant progress in the industry is in federated Machine Learning, i.e., deeper partnerships between the devices and cloud service so all the deep learning that’s happening at the device level will be transferable to the cloud and vice versa. Devices will continue to get more and more intelligent and capture a wealth of data, which will be fully leveraged by the connected cloud for better and more customized meeting experiences. Once again, the tightly coupled device and cloud solution will win and allow for deeper learning and outcomes.

The Missing Link

As Zoom fires all engines and scales up its business, its overarching direct-to-customer model will increasingly be challenged by the lack of a broad channel partner ecosystem. Zoom has built strong technology partnerships, which have been fundamental to its growth. However, it has yet to lay out a comprehensive global distribution strategy. The company primarily relies on direct sales. With its forthcoming channel partner program launch, Zoom expects to start filling the gap. However, its channel strategy remains primarily that of a true SaaS company despite its fast-changing DNA.

Large enterprise customers prefer a one-stop shop, one order history, and one point of contact for business communications, including localized support. In addition, long-term contracts that provide services for hardware, software, and project planning are part of the investment consideration. Particularly in the video conferencing market, the nuances of implementing the technology, often in complex multi-vendor environments and speaking the language of the customer, uniquely equip channels to transform business models and become long-term partners.

Zoom’s journey from 2011 to the present day has been an unmatched success story, but the company is not resting on its laurels and is continuing to build its business. An inevitable outcome of this rapid expansion is the changing dynamics with its closest technology partners, which Zoom heavily relied on. The tables are starting to turn. As Zoom raises the stakes, it will increasingly be at a crossroads with some of its partners. Zoom’s business model is all about putting the building blocks together piece by piece to form a coherent whole. It hopes to prove that it’s the whole that counts, not the pieces.

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How Zoom Won the Pandemic

Zoom is an unambiguous winner in the COVID-19 era. This blog post dives into why Zoom succeeded while its competitors stumbled, how zoom creates and captures value, and what the future may hold for this software company.

When was the last time you ZOOMed into a meeting and thought, god I miss people? Zoom Video Conferencing, or just “Zoom” for short, is one of the most unambiguous winners of this pandemic. We’ve all used it, and the company’s share price reflects this, with more than a 500% increase at its peak, from the mid-march pre pandemic numbers. Figure 1 below shows Zoom’s stratospheric rise over the past year.

Figure 1- Zoom share price history.

what is the business model of zoom

Although digital teleconferencing is self-evidently a powerful safety and productivity tool during a pandemic where human contact can lead to infection or death, what is less clear is why zoom specifically succeeded so emphatically. For example, Skype, a competing video conferencing platform owned by Microsoft, was the incumbent player. Comedian Hasan Minhaj said it best in his Netflix comedy show:

“By the way Skype, how did you drop the ball here? This was your moment! You had a 17-year head start, and Zoom ate your lunch in two weeks. You’re a verb no one does! Your friend will be like, “Let me Skype you….. Cool send me the Zoom link”

Pathways to a Just Digital Future

-Hasan Minhaj ,Patriot Act, Volume 6, What happens if you Can’t Pay Rent?

Skype’s fall from grace is mostly linked to the company’s mismanagement since Microsoft’s acquisition in 2011, however, the essence of the issue came down to the product’s ease of use, and quality [1]. Whereas Skype focused on adding features more akin to Snapchat, rather than focusing on the core capability of video conferencing, Zoom’s developers were focused on creating the best possible video conferencing tool. Zoom’s slicker, easier to use, and generally higher quality/more stable product is why it was able to take the video conferencing crown [2].

We’ve established that the core product capabilities are superior, but how exactly does zoom create and capture value? Let’s start with how the product/service generates value for its customers. The ease of use of the platform is as simple as a few clicks. Everyone from children, to baby boom grandparents find the user interface to be seamless and easy. Furthermore, the platform allows for easy group meetings with video tiles arranged in a visually pleasing way, the ability to take polls, ask questions, raise hands, write on a digital whiteboard, and even react with emojis. These features allow digital meetings to run smoothly and efficiently on stable platform. Now let’s look at how Zoom makes money.

Zoom uses a Freemium and Software as a Service (SaaS) business model where businesses and organizations like HBS, pay a periodic subscription fee to give them access to more advanced features like hosting longer and larger meeting which is critical for longer business meetings or academic settings[3]. The free version allows user to get to know and use the product before committing. The 45 minute maximum meeting times  in the free version and limits on the number of participants quickly becomes a constraint , thus enabling  Zoom to convert many free users into paying users. This was in stark contrast to Evernote, another freemium company who gave too much away in their free version.

As vaccines are rolled out globally, the end of the pandemic appears to be within sight as we round the corner, however, Zoom is uniquely well positioned to continue to grow and capture value for two primary reasons.

Firstly, the cat is out of the bag. Knowledge workers around the world have been working from home for almost a year, and while many miss the office, a sizable fraction have never been happier, especially people who had long commutes. The pandemic forced companies to digitize far more quickly then they would have otherwise with a Mckinsey survey indicating that “…companies acted 20 to 25 times faster than expected. In the case of remote working, respondents actually say their companies moved 40 times more quickly than they thought possible before the pandemic.[4]”  Employers will be hard pressed to return their workers to full time in person work, the likely long term trend is for more employee choice in terms of where they will work [5].

Secondly, the company’s brand awareness has spiked since the pandemic has hit, and the company has developed a lot of Goodwill with its customers. As mentioned before, Skype has been dethroned. Figure 2 below shows Zoom’s absolute dominance in terms of google search trends when compared to other major players in the video conferencing space. The google search trends can be used as a barometer for brand awareness.

Figure 2- Google search trends for major video conferencing products.

what is the business model of zoom

In conclusion, Zoom’s focus on creating the best video conferencing product, combined with a complimentary business model and strong societal trends uniquely positions the company to continue to generate huge shareholder value, while helping businesses, schools, and other organizations continue their operations regardless of status of the pandemic.

[1] Kingsley-Hughes, Adrian. 2021. “Why Are We All Zooming And Not Skyping? | Zdnet”.  Zdnet . https://www.zdnet.com/article/why-are-we-all-zooming-and-not-skyping/.

[2] Stokel-Walker, Chris. 2021. “How Skype Lost Its Crown To Zoom”.  WIRED UK . https://www.wired.co.uk/article/skype-coronavirus-pandemic.

[3] “The Zoom Business Model – How Does Zoom Make Money?”. 2021.  Productmint . https://productmint.com/the-zoom-business-model-how-does-zoom-make-money/#:~:text=The%20business%20model%20of%20Zoom,due%20to%20its%20product’s%20superiority.

[4] “How COVID-19 Has Pushed Companies Over The Technology Tipping Point—And Transformed Business Forever”. 2021.  Mckinsey . https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever.

[5] “Reimagining The Office And Work Life After COVID-19”. 2021.  Mckinsey . https://www.mckinsey.com/business-functions/organization/our-insights/reimagining-the-office-and-work-life-after-covid-19.

Student comments on How Zoom Won the Pandemic

The question of “why Zoom” has been really interesting to me during this pandemic. It seems like Microsoft had such a clear advantage with Skype, and even Cisco with Webex seems to have had a better starting point than Zoom. These were acquisitions made for $8.5B and $3.2B respectively, so it seemed like both Microsoft and Cisco were willing to make substantial investments in video conferencing. I have periodically checked to see what the drivers were of Zoom’s success over competitors, waiting to see a behind the scenes look into some brilliant marketing or distribution channels, but it really just seems to come down to Zoom having a better technological product! In particular, what seems to have set them up for success was not just ease of use, but more specifically ease of access. In a global pandemic with tons of new users looking for any solution, having a one-click solution that doesn’t require an account became a real advantage. To me, the success of Zoom really does feel like an argument for specialization and focus over corporate synergies and investment dollars.

As Zoom was becoming a household name at the onset of the pandemic, the company was also grappling with a class action lawsuit that many users are blissfully unaware of. Zoom was quietly sending user data with Facebook, even for Zoom users who do not have a Facebook account, in violation of California’s Consumer Privacy Act. Zoom allegedly removed the data-sharing feature in newer versions of the app, but questions into the company’s use of data remain. When companies in the technology arena grow as quickly as Zoom has, typically privacy, data responsibility, and security suffer. I think it is important that we continue to keep an eye on Zoom’s privacy policies and data usage because, to your point, the use-cases for this app are expanding from business meetings and academic and into private social meet-ups and more.

Read the full complaint here: https://www.cyberscoop.com/zoom-lawsuit-facebook-california-privacy-ccpa/

At the beginning of that crazy year, I personally do not even remember how I downloaded and started using Zoom. I do not even remember what occasion made me download it. Now I realize that it was so smooth and organic, any other use of tools (Teams, Google) seems like an exception, whereas Zoom becomes a standard tool for communications. However, I would love to have more filtering features (like blurring) in Zoom but maybe I am just a bad lazy non-educated user. 🙂

Very helpful analysis of the video conferencing platform that we all used almost every day since March 2020! I’m very interested in seeing how Zoom will position after the pandemic, for example I’m curious to see whether it will add extra features aimed at improving internal communication or task coordination within organizations, similar to Microsoft Team or Trello.

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The Strategy Story

Market Differentiation: Zoom’s Growth Strategy

No one could have thought how life would change overnight. It has been a challenging year for everyone. But we humans are adaptable creatures and try to fit into a different environment or any situation.

Although initially, the idea of working or studying or be it any activity which we had to do from home was horrifying. The Pandemic did bring many difficulties and challenges during the year, but due to incredible technological advancements, we humans were usually able to carry on our lives (almost). One such Application that helped us survive during the Pandemic was Zoom. For anyone who wanted to talk to somebody, the phrase that would automatically come out is ‘Let’s talk on Zoom.’

Humble Beginnings

Eric Yuan initially founded zoom Video Communication (more famously known as just ZOOM) on April 21, 2011. Eric left Cisco in April 2011 along with 40 engineers to start a new company initially named Saasbee, Inc.

The organization faced difficulties finding investors since many thought the video telephony market was already saturated. It was only in May 2012; the organization changed its name to Zoom. The name was influenced by Thacher Hurd’s children’s book  Zoom City.  

In August 2012, Zoom launched the first version of its product , which allowed up to 15 people to video chat at once. 

The first two years, the company just had a small team (mostly engineers from WebEx). There were still few people other than the engineering group that Yuan took it upon himself to email any user who canceled the subscription. He said he would try and get them on a Zoom call to talk through their problems and see how he could fix them. One of the first customers of Zoom was Stanford University in November 2012. 

Before the Pandemic happened, many didn’t like the idea of a video calling tool, but everything changed overnight when people were forced to stay inside and carry on with their daily work. Soon it became the most downloaded apps.

What strategy helped Zoom differentiate in the sea of business conferencing applications?

Whenever the word Videoconferenceing would come up, the first thing that comes up in a person’s mind is downloading the software and understanding how to set it up along with many other complicated IT-related processes. But Zoom is different. Anyone could just send the invitation, and it would quickly launch the meeting. 

In 2013, around 3 million people participated in a Zoom meeting, whereas in 2014, Zoom had 30 million meeting participants. But it grew to 100 million in 2015. But in 2020, it experienced 200 million meetings every day .

The free version of Zoom can host up to 100 video participants at once, whereas Microsoft ( MSFT )-owned Skype’s free model allows for 50. It also features personalized tools, including the ability to pick different backgrounds, change the camera angles, hold encrypted private calls, send direct messages, and record sessions.

Another reason for it becoming so popular and giving it an edge is its user-friendly nature. People don’t need a login to access a meeting, and the interface is relatively intuitive. People started using up the service to keep in touch with friends, Family, conduct corporate meetings, and even host weddings, which had become quite a trend for some time. 

The app also provided  a built-in beautification filter , one of several services that further helped to stand out. Educational Institutions around the world also moved towards the platform to conduct classes online. 

Also, the app focused on large MNC’s such as the University of Sydney and Wells Fargo. Employees back at work found their own video conferencing tool difficult, whereas Zoom was user-friendly, smooth, and free zoom accounts. Therefore there was pressure on corporate IT to change their video-conferencing. 

Pandemic Effect: Power Booster to Zoom’s Business Strategy

On March 23, the time when countries were going under a lockdown, Zoom was downloaded 2.13 million times worldwide, from 2.04 million the day before, as per the app tracking firm Apptopia. Two months earlier, the app just had less than 56,000 global downloads a day.

Infographic: Zoom's Revenue Skyrockets On Pandemic Boost | Statista

It was found that the mobile app for Zoom was installed about 3.7 times more than Skype’s and 8.6 times more than Google Hangouts, therefore becoming the most favorite video calling app from March 2020 onwards.

The largest and fastest-growing market for Zoom are:- 

Due to an increase in the daily meetings in March 2020, Zoom’s stocks experienced a boost during the Pandemic, despite a turndown in the stock market. It experienced a massive jump from $70 in January to $150 in March (almost double of its original). By June 2020, the value of the company was $67 billion. 

what is the business model of zoom

Zoom became the most well-known video-conferencing app during the COVID-19 after gaining about 635 % in 2020. The nine-year-old app’s (Zoom) market crossed $140 billion in October 2020, surpassing Exxon Mobile, which was 130 years old. But it did experience a fall of more than 15% when the news broke in November 2020 about the vaccine’s efficiency. It was in January 2021 only that Zoom again raised $2 billion but through a common stock offering. 

Zoom 2019 market cap: $18.8B Airlines 2019 market cap: $78.1B Zoom current market cap: $44.5B Airlines current market cap: $27.0B Note: Airlines includes Delta, United, American and Jet Blue. — Will Hershey 🟢 (@maybebullish) March 23, 2020

Way Forward: Zoom’s growth Strategy

It now appears that Zoom has started expanding its footing across industries quickly as the coronavirus pandemic continues. For example,the company offers  its services to K-12 schools  for no charge in various countries like UAE, Germany, Canada, the UK, and the US. It also waived its monthly charge to all users in China.

Moreover, Zoom introduced a new accessibility feature to make the app more comfortable to use in September 2020 for those who have hearing or visually impaired. This included moving around the video windows in the gallery view, pin video windows to be spotlighted, improved keyboard shortcuts, new tools to adjust the size of closed captioning text, and sign language interpreters’ windows who can sit directly next to the speaker. 

Today Zoom has become one of the most successful and used applications in the world. Nine years ago, no one had heard of such an application, let alone imagine how it would contribute to helping humanity to survive and move on with their lives during the Pandemic. Today you can find the application on almost every device.  

According to  the 2020 Businesses @ Work report from Okta notes, “Zoom was the #1 fastest growing video conferencing app in 2016, and it hasn’t slowed down since. Over the past three years, Zoom has enjoyed an astounding 876% growth in number of customers in our network. For comparison, second-place Cisco Webex grew 91% over that same period.”

One of the major reasons that Zoom became successful is because of its easy accessibility. A customer (or a user) would use the product the more it is available to him/her. Everyone can use the application no matter how they can access or connect to the internet. This helped various people to use Zoom creatively.

With Zoom’s 4 word motto ‘Make Communication Frictionless’ , It certainly did smooth the communication process. In fact, so many weddings were also held through zoom. Anyways I will end the article here since I need to attend Zoom Meeting. Ciao!

-AMAZONPOLLY-ONLYWORDS-START-

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Kashish M is an Undergraduate student from the Middle East. Apart from listening songs and learning new languages and exploring different culture over time she developed interests in writing and gained interest in exploring different parts of the accounting/finance world.

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Zoom Success [Part 4] How Zoom’s clever business model delivers and captures value

09 Jul Zoom Success [Part 4] How Zoom’s clever business model delivers and captures value

As businesses had to revert to working from home, Zoom became a global phenomenon. Their growth in Q1 fiscal 2021 generated some notable profit results for the company. Their net income, an unadjusted profit metric, rose from $0.2 million in the year-ago quarter to $27.0 million in its most recent three months.

How do you grow a business like that? Read through this last episode of our series if you want to learn more about their economic model and how they make money.

#1 Strong freemium offering

Zoom is giving away an excellent product for free. People can set a free 40-minute conference call with up to 100 participants and enjoy the freedom to jump on video conference without having to download any application or software. It might not seem like a big deal, but it’s actually a driving force in Zoom’s adoption pace and virality.

The freemium model not only speeds up the rate at which Zoom’s conference URLs are shared from one-to-many users, it also allows potential customers to get to know their products, which increases awareness for Zoom through word-of-mouth.

This no-charge offer turns out to be the biggest money earner ever. Once people are happy with what they discover for free, they are more inclined to evangelize the product and buy the premium service. This goes for enterprises too. 55% of Zoom’s enterprise deals over 100,000 started with a single employee trialling a free version of the product .

The same bottoms-up approach from early adopters worked wonders for Facebook, Twitter, and Gmail.

#2 Their market is EVERYONE

In the first part of our series, we’ve highlighted what makes Zoom the go-to platform for video communications. We’ve also talked about how they succeeded in building a sensational brand . They’ve done things right even with their culture . All these areas – product, people, promotion – have set the ground for a market explosion. The work-from-home trend just pushed the pedal, landing Zoom on the biggest addressable markets ever. Because the reality is their market is no longer just teachers, students, trainers, and small businesses. Now, their market is everyone.

3 Ways Zoom Captures Value

If you take a look at the Google Search results for video conferencing services in the last couple of months, it’s even easier to understand how the market exploded for Zoom. The nearest competitor to Zoom’s growth, in terms of search, is Skype with nearly 20%. But even way before the global lockdown, Zoom was already way ahead. The quarantine only fueled their growth.

#3 Hardware revenue, why not?

Hardware is not crucial to Zoom’s business, but it definitely brings in revenue and has great potential to become a more solid growth stream.

Zoom Rooms and Workspaces let businesses use computers, tablets, cameras, microphones, and more to hold virtual meetings. For larger-scale organizations, which need to hold meetings across different offices, Zoom comes in with the perfect setup because they also make integration with the hardware much easier.

They either offer their own set of hardware, which they co-created with other manufacturers, or they promote and recommend purchasing from Zoom-certified hardware providers. Such providers pay a percentage of every hardware sale to Zoom, which in return makes sure to promote their products to the company’s customers.

Zoom’s recent elevation of funding in a private company designing and developing video communication hardware shows that Zoom sees great potential in this new revenue stream. “ In the third quarter of fiscal year 2020, we made a $3.0 million strategic investment in a private company in the business of designing and developing video communications hardware. In the first quarter of fiscal year 2021, we made an additional $8.0 million strategic investment in this company ,” Zoom announced in early June. (Zoom’s fiscal 2020 ended Jan. 31, 2020).

To gain free access to the end-to-end case study on Zoom’s growth and success, you can  sign up to BottomUp Skills .

About BottomUp Skills

BottomUp Skills is  the e-learning platform  created and supported by the QUALITANCE global thought-leadership team for innovators, makers, and creatives who want to sharpen their skills in innovation, design thinking, and technology. Usually, such courses are exclusive to our clients such as Ford Motor Company, News Corp Australia, Breville, and many others around the world. Now, we have opened the paid subscription courses and made them available to everyone for life.

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As DEI gets more divisive, companies are ditching their teams

Zoom and snap are among companies that have cut roles in recent weeks.

what is the business model of zoom

After George Floyd’s murder in 2020, companies made big pledges about racial equity, hiring teams dedicated to diversity, equity and inclusion. Now corporate America is pulling back — cutting DEI jobs and outsourcing the work to consultants.

DEI jobs peaked in early 2023 before falling 5 percent that year and shrinking by 8 percent so far in 2024, according to Revelio Labs data shared with The Washington Post. The attrition rate for DEI roles has been about double that of non-DEI jobs, says Revelio, which tracks workforce dynamics.

In recent weeks, Zoom axed its internal DEI team amid broader layoffs, and Snap cut workers who worked on retention and engagement efforts for employees from underrepresented groups. Meta, Tesla, DoorDash, Lyft, Home Depot, Wayfair and X were among major corporations making steep cuts in 2023, slashing the size of their DEI teams by 50 percent or more, Revelio’s data shows.

“The overall number of DEI officers has decreased,” said Lisa Simon, Revelio’s senior economist, “but it’s not enough to destroy all the strides that happened after 2020.”

DEI’s ‘Rooney Rule’ placed under legal microscope, on and off the field

At Zoom, chief operating officer Aparna Bawa told employees that the company would replace its internal DEI team with DEI consultants who would “champion inclusion by embedding our values … directly into our people programs rather than as a separate initiative,” according to a Jan. 29 memo seen by The Post.

Colleen Rodriguez, the company’s head of global corporate communications, said Zoom “remains committed” to DEI work.

Snap made a similar decision in February, according to reporting from Business Insider. Snap did not respond to a request for comment.

Corporate America’s retreat from DEI has coincided with increased legal risk and political animosity toward systemic efforts to boost racial equity. State legislators have introduced at least 65 anti-DEI bills since 2023, according to the Chronicle of Higher Education . The resignation of Claudine Gay , Harvard University’s first Black president, amid plagiarism allegations in January was billed as “the beginning of the end for DEI in America’s institutions” by the conservative activist who led the campaign to oust her. Mentions of DEI on corporate earnings calls have plunged in the past year, according to the Wall Street Journal .

For companies that were never really committed, “this is the perfect air cover for backing off diversity,” said Joelle Emerson, CEO of DEI consultancy Paradigm.

Not all companies downsizing teams are giving up on the work, Emerson said, noting that some employers overhired when they established their DEI teams.

“I don’t know that it ever made sense to have a 25-person diversity team sitting to the side of a core business function,” Emerson said. “Companies should be able to say, ‘We’ve tried this, it didn’t have an impact, we’re going to try something different.’”

2024 might be do-or-die for corporate diversity efforts. Here’s why.

The recalibration is happening under serious legal pressure. Last year, when the Supreme Court struck down affirmative action in college admissions, the decision didn’t apply directly to employers. But the ruling kicked off an effort , driven largely by conservative activists, to dismantle race-conscious policies in other domains of American life.

In July, 13 Republican attorneys general sent a letter urging Microsoft and other Fortune 100 companies to reexamine their DEI policies in response to the ruling. America First Legal, a group backed by former Trump adviser Stephen Miller, has filed legal complaints over diversity practices at scores of companies, including United Airlines, Kellogg’s, Nike, and organizations such as the FBI, National Football League and Major League Baseball.

Edward Blum, the conservative activist behind the lawsuits that toppled affirmative action in college admissions, is suing venture capital firm Fearless Fund over its grant program for early-stage businesses owned by Black women. Blum’s group has also found success targeting major law firms over their diversity fellowships: Three big law firms — Perkins Coie , Morrison Foerster and Winston & Strawn — opened their fellowships for students of color to applicants of all races and backgrounds after being sued. A fourth law firm, Adams and Reese, ended its diversity fellowship after receiving an Oct. 9 letter threatening litigation.

Even before the tide turned last summer, DEI work was an uphill battle. As companies’ commitments have wavered, DEI professionals have had their work challenged.

“Any time I’d raise something with the word ‘equity’ … I was told it scares people away,” said a former head of DEI for a gaming start-up, who was laid off in January. He spoke on the condition of anonymity to avoid violating his separation agreement.

After stepping into the role in 2020, he said he was disheartened by resistance from executives to pay-transparency policies and employee resource groups. The DEI budget kept facing cuts, he said, and he was constantly under pressure to show a “return on investment.”

When it comes to DEI, businesses are “interested until they’re not,” he said. “These positions are going away every day.”

When Reagan tried to undo affirmative action, corporations fought back

Some groups have been imploring companies to maintain their DEI focus. On Monday, the executive board of the Congressional Asian Pacific American Caucus sent a letter to CEOs of Fortune 100 companies, inquiring about efforts to improve Asian American diversity and encouraging them to stay the course amid growing attacks on DEI. The group noted that Asian Americans remain “severely underrepresented at the senior-most levels of the largest U.S. corporations.”

“Without executive leadership representation at Fortune 100 companies, AANHPI employees have fewer role models and fewer internal champions to guide and mentor them,” the letter reads. “Corporate leaders also have fewer internal resources to guide them in fully understanding the needs and aspirations of AANHPI consumers.”

Members of the Congressional Black Caucus sent a similar letter in December to acting labor secretary Julie Su, inquiring about tech layoffs that were disproportionately affecting Black workers.

“Tech companies who previously agreed to address bias and discrimination and create greater opportunities in the workforce are now quietly defunding diversity pledges,” the letter reads, according to TheGrio.

Some companies are bucking the trend. J.M. Smucker, Victoria’s Secret, Michaels, Moderna, Prudential and ConocoPhillips were among big corporations that expanded their DEI teams by 50 percent or more in 2023, according to Revelio’s data. Packaged-food giant Conagra Brands and NASA both doubled the size of their DEI teams.

With 30 years’ experience in diversity work, Cristina Jimenez, head of DEI at RHR International, a leadership consulting firm, says she has “watched the pendulum swing back and forth” between support and resistance. But this moment seems particularly fraught, she said. Her clients feel like “they’re in a battle zone all the time.”

“They’re not sure what to do next,” Jimenez said, “but they understand if they don’t do something, their talent strategies, their culture, their ability to succeed is all at risk.”

what is the business model of zoom

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Temu promises cheap goods. Here's how the shopping app does it

Bill Chappell

what is the business model of zoom

Temu has soared in popularity since it launched in 2022. Here, a photo illustration shows the Temu app in an app store reflected in videos of Temu consumers in Washington, D.C. Stefani Reynolds/AFP via Getty Images hide caption

Temu has soared in popularity since it launched in 2022. Here, a photo illustration shows the Temu app in an app store reflected in videos of Temu consumers in Washington, D.C.

Temu's Super Bowl ads promise to let people "shop like a billionaire" — and they've helped the Chinese-owned online discount marketplace expand in the U.S. at a breathtaking pace.

"In less than a year, this business has spun up an online retailer that is, like, 75% the size of [Target.com], which is enormous," The Atlantic 's Amanda Mull told NPR last fall, citing Temu's $16 billion in revenue in 2022.

But that explosive growth has also fueled skepticism from consumers over the quality of Temu's offerings. And some U.S. officials accuse Temu of underpinning its business with unfair and/or unethical practices.

Here's a quick guide to Temu and the questions about it:

Very low prices are only part of the story

Temu aggressively markets "hot deals" — such as a hooded button-up fleece jacket currently going for $8.32 or a car-mounted vacuum cleaner selling for $13.48 . Eye-catching prices like those are frequently cited in its online ad campaigns.

The reasons behind those low prices range from Temu's business model and aggressive market tactics to an obscure U.S. import law.

For decades, importers and retailers have racked up profits by buying Chinese-made items wholesale, bringing them to the U.S. and selling them at a markup. Temu pursues a similar tactic, but it promises a direct, streamlined link between consumers and manufacturers.

Super Bowl ads played it safe, but there were still some winners

Super Bowl 2024

Super bowl ads played it safe, but there were still some winners.

"Dispatching goods directly from the source eliminates the need for multiple stages of transportation and warehousing," a Temu spokesperson told NPR, "addressing what is often the most significant expense and inefficiency in conventional retail operations."

Temu's strategy follows a model that Pinduoduo, the huge Chinese retailer behind Temu, honed when it streamlined connections between farmers and consumers in China's food and produce sector. In 2022, the U.N. Food and Agriculture Organization said Pinduoduo allowed "more than 16 million farmers to sell their produce to 880 million consumers who shop on the platform."

Temu is aiming at Amazon

Compared with its ultrafast-fashion counterpart Shein , Temu focuses a bit less on clothes and more on ultracheap home goods and plasticware. It's increasingly mentioned as one of the biggest threats to Amazon's e-commerce domination.

For now, Amazon's lead is secure — the company recently reported $170 billion in net quarterly sales, including $70.5 billion from its online stores and $43.5 billion from third-party seller services.

But Temu has quickly made inroads — one metric of the retailer's impact is U.S. mail carriers, including one who recently described to Forbes the phenomenon called being "Temu tired," as she seemingly delivers more of the company's orange-labeled packages each day.

On Apple's list of shopping apps as of Tuesday, Temu held No. 1, followed by Shein and then Shopify and Amazon.

America can't resist fast fashion. Shein, with all its issues, is tailored for it

America can't resist fast fashion. Shein, with all its issues, is tailored for it

Temu has reportedly been undercutting its competitors' prices, absorbing losses to win over customers, according to an analysis by China Merchants Securities that was cited in Chinese-language financial news media and by Wired . Recent reports have also alleged that Temu has pressured sellers to keep prices low.

When asked about those claims, Temu's spokesperson told NPR, "Merchants who have developed economies of scale and demonstrate cost efficiency thrive in Temu's environment. Their ability to offer competitive prices, driven by reduced production and operational costs, are rewarded by consumers looking for that combination of price and quality."

An obscure U.S. law helped Temu's meteoric rise

E-commerce innovations alone don't explain Temu's low prices. Lawmakers also accuse Temu of abusing a loophole in U.S. import tax law. The loophole lets companies skip import fees for smaller-value shipments, and Temu uses that rule when shipping individual packages to people's homes rather than importing in bulk to a warehouse.

The rule in question is called de minimis , a legal term for something too insignificant in value to bother imposing duties. The threshold differs around the world ; in the European Union, it's 150 euros (about $160). The U.S. level used to be $200, but it rose to $800 in 2016 — among the highest in the world — when then-President Barack Obama signed the bipartisan Trade Facilitation and Trade Enforcement Act .

Are the products in your shopping cart real?

The Indicator from Planet Money

Are the products in your shopping cart real.

"Both Temu and Shein rely heavily on the de minimis exception to ship packages directly to U.S. consumers," a congressional review found last year, "allowing them to provide less robust data" to Customs and Border Protection and avoid import duties.

"Temu and Shein alone are likely responsible for more than 30% of all packages shipped to the United States daily under the de minimis provision," the committee said in its report.

The import method also minimizes the chances that Temu's packages will be screened for compliance with the Uyghur Forced Labor Prevention Act, the House Select Committee on the Chinese Communist Party said. That law blocks products from China's Xinjiang region , where systematic human rights abuses against the Uyghur minority have been reported.

"Regarding the compliance issue of products related to forced labor, we attach great importance to it," the Temu representative told NPR. "Our current standards and practices are no different from those of major U.S. e-commerce platforms. The allegations in this regard are completely ungrounded."

Timing and inflation have boosted Temu

Temu exploded in popularity in the U.S. after its first Super Bowl ad in 2023, becoming one of the most downloaded apps in the United States.

The bold decision to tout its months-old marketplace and app with high-profile TV ads came as the company sought a foothold in the U.S. market. Almost immediately, downloads and use of Temu's app spiked, according to Momentum Works , a Singapore-based market research firm.

That first Super Bowl ad placement, which the company repeated in 2024, came as Americans were reeling from record levels of inflation . In that context, Temu's promise of selling everyday items at remarkably low prices resonated.

But there has been backlash, including a federal class action lawsuit filed last year accusing Temu and its parent company of collecting "user data beyond what is necessary for an online shopping app, including biometric information and data from users of the app."

Are Temu products legit?

"On average, some of them are going to be exactly the same, some of them are going to be coming from exactly the same sellers" that consumers might find at other retailers, The Atlantic 's Mull said last year. "Others are going to be a little bit junkier. Others might use substandard materials that might not always pass muster in the U.S. for safety standards."

Also worth noting: Pinduoduo's app and website — but not Temu itself — has for several years been on the U.S. list of "Notorious Markets for Counterfeiting and Piracy," recently updated by the Office of the United States Trade Representative.

The USTR listing says that despite Pinduoduo's claims of adopting new anti-counterfeiting initiatives, a litany of issues remains, including refusals to remove bogus products and "a further deterioration of Pinduoduo's already ineffective seller vetting."

Online pricing algorithms are gaming the system, and could mean you pay more

Online pricing algorithms are gaming the system, and could mean you pay more

Last year, Pinduoduo changed its corporate name to PDD Holdings Inc., which is now the parent company of both Pinduoduo and Temu. Shares of PDD Holdings are listed on the Nasdaq exchange; at the end of stock trading last week, PDD Holdings closed at $127.48 , giving it a market capitalization of $169.37 billion.

As for the U.S.-based Temu, the company is not accredited by the Better Business Bureau, which gives it a rating of C-plus . For comparison, Amazon, which is accredited, has a B rating. To earn accreditation, a business must both meet BBB standards and pay an annual fee.

Alina Selyukh contributed additional reporting.

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IRS shares 7 warning signs Employee Retention Credit claims may be incorrect; urges businesses to revisit eligibility, resolve issues now before March 22

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IR-2024-39, Feb. 13, 2024

WASHINGTON — With a key March deadline quickly approaching, the Internal Revenue Service today highlighted special warning signs that an Employee Retention Credit (ERC) claim may be questionable to help small businesses that may need to resolve incorrect claims.

The agency alerted businesses about seven suspicious warning signs that could signal future IRS problems involving ERC claims. The indicators, built on feedback from the tax professional community and IRS compliance personnel, center on misinformation some unscrupulous ERC promoters used. Many of these groups urged taxpayers to ignore advice from trusted tax professionals and claim the pandemic-era credit even though they may not qualify.

“IRS compliance activity continues increasing involving Employee Retention Credit claims, and those claiming this pandemic-era credit need to quickly review their situation to avoid future problems,” said IRS Commissioner Danny Werfel. “Many businesses were wildly misled about the qualifications, and the IRS is taking a special step to highlight common problems being seen about these claims. The IRS urges ERC claimants to get with a trusted tax professional and review their qualifications before time runs out on IRS disclosure and withdrawal programs. The ‘suspicious seven’ signs released today are clear red flags that ERC claimants should carefully review.”

The alert comes as a March 22, 2024, deadline approaches for the ERC Voluntary Disclosure Program for anyone that filed a claim in error and received a payment; the disclosure program allows businesses to repay just 80% of the claim. Taxpayers who filed a claim previously that hasn’t been processed should also review the guidelines and quickly pursue the claim withdrawal process if they now see their claim is ineligible.

The IRS took steps on the ERC program after the well-intentioned pandemic-era program came under aggressive, misleading marketing that oversimplified or misrepresented eligibility rules. Promoters pushed more applicants into the program, frequently by taking a percentage of the payout. The IRS wants businesses to know about these warning signs, revisit their claim if there are questions and act quickly before the special disclosure and withdrawal programs end. Resolving an incorrect claim through the IRS’s special programs will avoid penalties and interest.

“We’ve heard from the tax pro community and others that sharing more warning signs can help point well-intentioned people in the right direction,” Werfel said. “Many of these taxpayers were misled by overzealous and unscrupulous promoters taking advantage of honest taxpayers. The most beneficial time to resolve any incorrect claims is now before this special window closes.”

The ERC, sometimes called the Employee Retention Tax Credit or ERTC, is complex, and the IRS urged claimants to talk to a reputable tax professional for help with an ERC claim. Taxpayers should avoid working with anyone who doesn’t ask for details or business records, such as payroll records.

7 suspicious signs an ERC claim could be incorrect

Here are some of the common red flags being seen on ERC claims that the IRS is focusing on:

  • Too many quarters being claimed. Some promoters have urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon, and this could be a sign of an incorrect claim. Employers should carefully review their eligibility for each quarter.
  • Government orders must have been in effect and the employer’s operations must have been fully or partially suspended by the government order during the period for which they’re claiming the credit.
  • The government order must be due to the COVID-19 pandemic.
  • The order must be a government order, not guidance, a recommendation or a statement. Some promoters suggest that an employer qualifies based on communications from the Occupational Safety and Health Administration (OSHA). This is generally not true. See the ERC FAQ about OSHA communications and the 2023 legal memo on OSHA communications PDF for details and examples. The frequently asked questions about ERC – Qualifying Government Orders section of IRS.gov has helpful examples. Employers should make sure they have documentation of the government order related to COVID-19 and how and when it suspended their operations. Employers should avoid a promoter that supplies a generic narrative about a government order.  
  • Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. The law changed throughout 2020 and 2021. There are dollar limits and varying credit amounts, and employers need to meet certain rules for wages to be considered qualified wages , depending on the tax period. The IRS urges employers to carefully review all calculations and to avoid overclaiming the credit, which can happen if an employer erroneously uses the same credit amount across multiple tax periods for each employee. For details about credit amounts, see the Employee Retention Credit - 2020 vs 2021 Comparison Chart .  
  • Business citing supply chain issues. Qualifying for ERC based on a supply chain disruption is very uncommon. A supply chain disruption by itself doesn’t qualify an employer for ERC. An employer needs to ensure that their supplier’s government order meets the requirements. Employers should carefully review the rules on supply chain issues and examples in the 2023 legal memo on supply chain disruptions PDF .  
  • Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter . A business in this situation can claim ERC only for wages paid during the suspension period, not the whole quarter. Businesses should check their claim for overstated qualifying wages and should keep payroll records that support their claim.  
  • Business didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. Some taxpayers claimed the ERC but records available to the IRS show they didn’t have any employees. Others have claimed ERC for tax periods before they even had an employer identification number with the IRS, meaning the business didn’t exist during the eligibility period. The IRS has started disallowing these claims, and more work continues in this area as well as other aspects of ERC.  
  • Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment requirements, penalties, interest, audit and potential expenses of hiring someone to help resolve the incorrect claim, amend previous returns or represent them in an audit.

Resolving incorrect ERC claims

Businesses that are not eligible for ERC but have received it – as a check that’s been cashed or deposited, or in the form of a credit applied to a tax period – may be able to participate in the IRS’s ERC Voluntary Disclosure Program . The special program runs through March 22, 2024, and allows eligible participants to repay their incorrect ERC, minus 20%.

If a taxpayer’s ERC is incorrect and is paid after Dec. 21, 2023, they aren’t eligible for the ERC VDP. They should not cash or deposit their check. They can withdraw the claim , return the check and avoid penalties and interest.

The withdrawal option lets certain employers withdraw their ERC submission and avoid future repayment, interest and penalties. Businesses can use this option if they haven’t received the payment, or they've received a check but haven’t deposited or cashed it. If a taxpayer’s withdrawal request is accepted, the IRS will treat the claim as though it was never filed.

Resources and tools to learn more about ERC eligibility

The IRS’s frequently asked questions on ERC include links to additional resources and some helpful examples. The IRS also has an interactive ERC Eligibility Checklist that tax professionals and taxpayers can use to check potential eligibility for ERC. It’s also available as a printable guide PDF .

Eligibility highlights

The ERC is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before Jan. 1, 2022. Eligibility and credit amounts vary depending on when the business impacts occurred. The ERC is not available to individuals.

  • For 2020 and the first two calendar quarters of 2021, an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19 or they experienced the required decline in gross receipts .
  • For the third quarter of 2021 , an employer may qualify if their trade or business operations were fully or partially suspended due to a government order related to COVID-19, they experienced the required decline in gross receipts, or they were considered a recovery startup business .
  • For the fourth quarter of 2021 , only recovery startup businesses are eligible.
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People say they use recordings of random company Zoom meetings they found on YouTube to pretend they're busy at work

  • Some people say they use recordings of random Zoom meetings they found on YouTube to look busy.
  • Some said they would play the videos with the sound on to dodge work and avoid small talk.
  • "This meeting has been of more use to me than any other meeting at work," read one YouTube comment.

Insider Today

People trying to dodge work and avoid small talk have been turning to an unlikely tool — pretending to be in a meeting by playing Zoom recordings they found on YouTube.

In 2020 and 2021, organizations like the software company GitLab and the City of Santa Fe uploaded videos of their Zoom meetings on YouTube.

Though the videos were probably meant for record-keeping purposes, some people have figured out that playing them on one's computer is a neat way to look busy.

"I use this whenever I need people in the house to leave me alone lol. It gives me a good 2 hours of alone time when needed," one person commented on GitLab's Zoom recording .

The video, uploaded in June 2021, has been viewed over 290,000 times as of press time. It has also received over 200 comments, with some expressing appreciation for the video's existence. GitLab's channel has over 11,000 videos and more than 28,000 subscribers.

"This meeting has been of more use to me than any other meeting at work that could've been an email," read another comment.

Others found it amusing that there was a fledgling community of such viewers.

"I can't believe I found my people! I thought I was the only one. I can't stop laughing," another person commented.

Based on YouTube comments seen by BI, the trend appears to have been going around since 2020.

"This really came in handy during COVID's high days," one person commented on the City of Santa Fe's video. "This really did the job of getting people to leave me alone in my home office between meetings."

The City of Santa Fe first streamed the video in April 2020. Since then, the video has been viewed more than 167,000 times. The channel has over 1,700 videos and over 2,300 subscribers.

It's not just work. Students are also using Zoom recordings of online classes to escape their parents.

"Sometimes in order to get out of things I will put this on and pretend I'm in class so my parents can't bother me for hours," read a comment to a history class by a history professor at Thomas More College, Patrick Eagan.

Some even offered tips on how to make the ruse more convincing.

"Every now and then I'll pause it at a good point between them talking to make my voice heard contributing to the 'meeting' lol. Gets the full effect in!" read one comment on GitLab's video .

what is the business model of zoom

Watch: A guy Skyped his parents while jumping out of a plane

what is the business model of zoom

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  24. Companies like Zoom and Snap are cutting DEI jobs

    Zoom and Snap are among companies that have cut roles in recent weeks.

  25. 20 Hurdles Organizations Face When Implementing A New Business Model

    3. Poor Product-Market Fit. When implementing a new business model, businesses should really nail the product-market fit. Experiment quickly with a minimum viable product to drill down on the ...

  26. Sam Altman just reminded everyone why OpenAI is leading the pack

    Google announced "something mind-blowing," he said on X, by expanding Gemini's "context window" — the number of words an AI model can process around a target token — by up to 1 million ...

  27. Google Launches Internal AI Model 'Goose' to Help Staff Code Faster

    Google has an internal large language model named Goose, designed to make employees more productive. Goose is trained on "25 years of engineering expertise at Google." The company is leveraging AI ...

  28. Temu promises cheap goods. Here's how the shopping app does it

    The reasons behind those low prices range from Temu's business model and aggressive market tactics to an obscure U.S. import law. For decades, importers and retailers have racked up profits by ...

  29. IRS shares 7 warning signs Employee Retention Credit claims may be

    Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. A business in this situation can claim ERC only for wages paid during ...

  30. People Using Random Zoom Meetings Found on YouTube ...

    People trying to dodge work and avoid small talk have been turning to an unlikely tool — pretending to be in a meeting by playing Zoom recordings they found on YouTube. In 2020 and 2021 ...