Zoom Video Communication Inc.
Zoom Video Communications, Inc. (Zoom) is an American communications technology company headquartered in San Jose, California. It provides videotelephony and online chat services through a cloud-based peer-to-peer software platform and is used for teleconferencing, telecommuting, distance education, and social relations. Zoom’s business strategy focuses on providing an easier to use product than competitors, as well as cost savings, which include minimizing computational costs at the infrastructure level and having a high degree of employee efficiency. The company was founded in 2011 by Eric Yuan, a former Cisco WebEx engineer and executive, and it was launched in 2013. Zoom’s aggressive revenue growth, and perceive ease-of-use and reliability of its software, resulted in a $1 billion valuation in 2017 and joined NASDAQ-100 stock index on April 30, 2020.
Beginning in early 2020, Zoom’s software saw increased use following the quarantine measures adopted in response to the COVID-19 pandemic. Its software products have faced public and media scrutiny related to security and privacy issues. A large part of Zoom’s workforce is based in China, which has given rise to surveillance and censorship concerns.
The impact of Covid-1 pandemic on Zoom Video Conferencing
During the COVID-19 pandemic, Zoom saw a major increase in usage for remote work, distance education, and online social relations. Thousands of educational institutions switched to online classes using Zoom. The company offered its services for free to K–12 schools in many countries. By February 2020, Zoom had gained 2.22 million users in 2020 — more users than it amassed in the entirety of 2019. On one day in March 2020, the Zoom app was downloaded 2.13 million times. Daily average users rose from about 10 million in December 2019 to about 200 million in March 2020 with 300 million daily meeting participants by the end of April 2020. This led to an increase in the company’s stock price in early 2020, despite a general stock market downturn. Zoom stock went from less than $70 per share in January 2020 to $150 per share by the end of March, giving the company a market value of $42 billion.
On May 7, 2020, Zoom announced that it had acquired Keybase, a company specializing in end-to-end encryption.
“How does Zoom make money and beat competition”.
Zoom is in the Video Communication industry with companies like Google Hangouts Meets, Join.me, Cisco WebEx Meeting and more.
The company’s competitive advantage is centered around the product’s ease of use as well as high-quality audio/video output.
The business model of Zoom is built on charging businesses a reoccurring subscription fee for the various products the company offers. On top of that, Zoom makes money from the promotion of hardware products.
Currently, Zoom Video Communication Inc class A shares traded at $219.52 last Friday before the close of the market. The future of Zoom maybe widely determined or affected by the US-China trade talks and users data. Zoom’s presence in China is the trust that can be placed on the company. As a company in China, Zoom will be required by the Chinese government to collect and hand over data? Thus, I can see how institutions in the US dealing with sensitive data will think twice before exposing themselves to Zoom. This is reminiscent of the problem that Huawei is having with the US government. Tesla and NASA, to name a few, have already decided they would not be using Zoom.....
Keep up with my social media and I will update you on some of the happenings in the financial market; just search Yusf Adegboye... Till next time, bye!!!
References
https://en.m.wikipedia.org/wiki/Zoom_Video_Communications
https://productmint.com/the-zoom-business-model-how-does-zoom-make-money/
“Disclaimer”
Please note that this report is meant for only information purposes and the write is not liable for your investment or trading decisions.
