Zoom Video Communications Updates
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The metaverse comes for video calls. Facebook is keen to sell products that facilitate a clash between digital and physical worlds, and wants workers to one day disrupt virtual reality headphones and attend meetings via an avatar. Zoom Video’s share in the virtual communications market is potentially at stake.
The transition from remote control to office or hybrid work has already required some adjustments. Unfortunately for Zoom, these shifts include a drop in market value of $ 60 billion since last fall. As sales growth slowed, Zoom’s value-to-sales ratio of forward-looking businesses, which was once one of the highest in its sector, dropped to 24 times. It is among the multiple for work-from-home stocks like DocuSign and Snowflake.
Zoom got users during the pandemic because of the easy-to-use interface. According to the TechRadar Consumer Technology Review, it retains a better user experience than Microsoft’s Teams. But in Zoom’s first set of quarterly results compared to a period of pandemic restrictions, sales rose 54 percent year-on-year to $ 1.02 billion. This is much less than the annual jump in turnover of 191 percent in the previous quarter. It expects this rate to slow through the year.
As smaller businesses swing between paying for video calls and returning to the office, Zoom’s wants to keep reporting large customers who will spend more. These clients can install the type of equipment needed to combine remote and in-office meetings. On this front, it can claim success. Zoom has more than doubled the number of customers paying more than $ 100,000 a year to nearly 2,300.
But the statement that video conferencing is here to stay does not mean that competitors like Cisco, Microsoft, Alphabet and now Facebook are stopping. No wonder sales and marketing costs increased by 70% over last year.
The answer is to find more services to sell to customers. While investors may be uneasy about the slowdown in video sales, look at Zoom’s expansion into payphone systems. Zoom Phone is a cloud-based phone product that was launched in early 2019 and is gaining an increase in customers. So far, it has sold 2 million “seats”, which has doubled in total since January. In mid-July, Zoom also decided to expand with the $ 14.7 billion purchase from the call center software maker Five9 and pays a modest premium of 13 percent.
Although the corporate metavers sound like a pipe dream, the truth is that business conversations offer a new reality for Zoom.