There has been a significant rise in the group video platforms and Zoom has taken full advantage of the timing. The only reason behind this significant rise is the fight against covid-19. People are staying indoors to reduce the density and risk of spreading the covid-19.
Governments across the world are taking preventive measures and are placing their citizens on lockdown. This has caused a hike in the daily usage of video calling platforms, as people can chat with multiple people face to face, while also practicing social-distancing. The most exceptional of them all has been Zoom.
Zoom video communication is an American based remote conferencing services company. It offers free video conferencing services up to 1000 participants, with a limit time of 40 minutes. More advanced features are also available for paid subscribers, some of these features includes more participants & increased time limit.
Initially Zoom started its video conferencing services with a maximum limit of 15 video participants, which increased to 25 in 2013, to 100 with version 2.5 in 2015 & presently at a maximum limit of 1000. Italso often lead the download charts of the Apple’s App Store.
To stop the spread of the virus, educational institutions are switching to online classes and companies are practicing work from home strategies. This has contributed significantly to the increased usage of platform in schools as well as companies.
Old users and families have also contributed to the increase usage as they are separated by the social distancing practiced worldwide. These gathering have been termed as “Zoom parties”. Moreover, the younger generation uses this platform outside classroom environment. Gen Z and Millennials have come together through events like “Zoom blind dates”, “Zoom Recess”, and sharing memes which are highly related to zoom.
Over the first months of pandemic Zoom gained 2.22 million new users which have already surpassed the entire user count of 2019. By march, 2020 the shares of Zoom touched the sky with a worth of $160.98 per share which was a 263% increase from the initial prices from the time when Zoom video communications first went public.
This very thing got the investors excited, so much that they invested in the wrong Zoom. The investors accidently invested in Zoom technologies, which was a Chinese wireless communication company instead of Zoom the video conferencing company. Shares in Zoom technologies jumped up by a gigantic 1500%.
ABOUT ERIC YUAN:-
Eric Yuan who was recently ranked at the 182nd spot of richest person on earth according to a bloomberg index is the founder of the Zoom Video communications. He currently owns a significant amount of the company’s shares, worth US$5.6 Billion.
His net worth also experienced a massive increase by $4 Billion before the pandemic started to $7.9 Billion at present.
Eric Yuan started this venture in 2011. In 1997, he Joined WebEx which was Later acquired by Cisco after 10 years. He convinced 40 engineers who worked with him at Cisco to follow him to his startup. As of 2019 the company has 1968 employees.
In his recent interview Yuan mentioned that he does not give much importance to the stock prices. Although, he is happy for the investors who have kept their faith on them.
There are wide range of video conferencing software available to user from which he can select the best suited for him/her. Hence, Zoom faces stiff competition from other video conferencing software which includes the likes of WebEx, Skype, LogMeIn, GoToMeeting, Blue Jeans network, Join Me, Arkadin, TeamViewer, Fuze & Whereby.
If we put Zoom with all his competitors together, they have raised more than 890M between their 11K employees.
It ranks 3rd amongst its top competitors in terms of revenue. The users as per their reviews tend to like Zoom more than other platforms because:-
- Its Video Conferencing Quality is pretty convincing.
- It allows people to conduct Zoom meetings of up to 100 people for up to 40 minutes for free!
- The Features available to the paid subscribers are also very attractive.
Zoom has performed exceptionally during the pandemic, as companies rely on remote work. In the fourth quarter of the fiscal year, Zoom noticed a revenue growth of 78% on annual basis. At the end of the quarter, the no. of customers rose to 81,900.
Zoom video communications called for fiscal first-quarter adjusted earnings of 10 cents p/s & $199M to 201M.This implies 64% growth at the middle range.
For Fiscal year 2021, the forecast by the video conferencing company was 42 cents- 45 cents adjusted earning p/s on $905M to $915M in revenue. This implies 79% growth at middle range.
The finance chief Kelly Steckelberg said on call to CNBC that they will try to expand their capacity so that they can meet the increased demands of the users. He also mentioned their 80%-82% long term target for gross margin in the fiscal year 2021.