Zoom: What’s next for the Covid-19 pandemic’s biggest winner?
There is a moment all marketers dream of when a product becomes so commonplace that the brand name becomes a verb.
This achievement was last year bestowed on Zoom, the previously obscure video conferencing platform that almost overnight became relied upon for both work and socialising.
It was a year of eye-watering success for the company, which saw its share price quadruple while profits soared to $671.5m from just $21.7m in 2019.
But as Covid-19 lockdown restrictions begin to ease around the world and competition heats up from rivals such as Teams, what’s next for the pandemic’s biggest winner?
Quizzed out?
When the world was first plunged into lockdown and people grappled with the unfamiliar world of video calls, it was largely Zoom’s user-friendly interface that helped it to stand out.
“It’s very easy to use, there’s very little entry barrier to it and you feel from a user experience point of view you can kind of jump through the screen, so I think that made it a stand-out platform of choice,” says Rebecca Bezzina, managing director at digital marketing firm R/GA London.
This helped the California-based firm build a strong user base (its daily user numbers hit 200m in March 2020, up from just 10m the previous December) and become the platform of choice for lockdown quizzes and virtual drinks events the world over.
But as restrictions are lifted and in-person socialising resumes, Zoom is facing question marks over whether its momentum will continue.
Adam Sefton, digital strategy director at WPP brand consultancy Superunion, argues that after an initial dip in demand, virtual socialising will remain an important activity.
“I think you might see a shift culturally in our acceptance of these sorts of Zoom quizzes, which have become a little bit of a pastiche over lockdown but are actually a really nice thing to do every now and again with people I otherwise wouldn’t see,” he says. “They’re not replacing my social interaction in person but they’re building on top of it.”
Bezzina, however, argues that social Zooming has been a product of necessity and will become less important over time.
“It’s a great solution because it is so easy to use and people have got used to it, but my instinct would say that’s not a huge part of the market long-term.”
Business wins
Either way, though, analysts agree that enterprise will be the biggest growth opportunity for Zoom in the coming year.
After an initial period of concern over Zoombombing the company calmed nerves about security and privacy and, aside from a brief outage in August, it has also proved stable. Nevertheless, its initial advantage is now being chipped away by competitors such as Microsoft Teams.
“Zoom took the world by storm and more established players were taken aback, but now I think more organisations, once they got through the initial panic, are looking at their IT and thinking ‘is this actually the best platform going forward?’” says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
A key challenge for Zoom, then, will be to build on its existing dominance and draw in commercial customers through new product or software innovations.
The company recently launched events platform On Zoom in a bid to capitalise on the shift to virtual conferences and events. Other similar products linked to its video conferencing software including Zoom Phone and Zoom Room.
“I think the real game for them is going to be in the enterprise space and trying to capitalise on the businesses that are using the product ongoing,” says Bezzina. “There are lots of adjacent products that they’re trying to spin off that are still linked to the core, but are ways to drive revenue into the business.”
In particular, industry watchers expect Zoom to adapt to changing working habits. While the end of lockdown will signal a return to the office, a shift to more flexible policies promises an era of hybrid working.
As a result, the video platform may look to incorporate new features such as storage and document sharing. Streeter even suggests hardware giving individual screens to virtual participants in a meeting, meaning they could be seated around a table alongside attendees.
“I think tools that allow you to collaborate more effectively in this hybrid or blended working environment are absolutely innovations they will be looking at,” Sefton adds.
Aside from its own innovations, Zoom may also look for further partnerships similar to its existing deal with Slack. This would help it challenge the advantage held by Microsoft, which can win customers by bundling Teams together with Outlook.
Sefton suggests the company could be looking at “pretty big partnerships — even as big as someone like Apple” in a bid to reach more customers.