By March this year the world looked very different and WFH was now part of our daily lexicon. Yet in the confusion of the global lockdown, most of us missed the investment opportunity of the virtual conferencing space. While Zoom shares were rising, we were busy panic-buying toilet paper.
I’m sure many investors, prospectors and speculators were kicking themselves. With FOMO and determination not to miss another opportunity, we are asking the same question…what’s next?
Where are we now?
Before Covid-19, video conferencing platforms such as Microsoft Teams, Google Meet, Blue Jeans, Cisco Webex, Skype for Business were relatively unfamiliar to non-business users. These platforms must now serve traditional business users (who probably didn’t need virtual backgrounds) as well as new users who have myriad needs.
There is still a tremendous amount of whitespace to conquer before the virtual conferencing companies cannibalise each other’s market share. Large sections of the community are using video conferencing for the first time: students, music lessons, fitness classes, speed dating, virtual weddings, even virtual funerals. We haven’t touched the sides of use cases for these platforms.
To get on the front foot, video conferencing companies are bringing forward their product roadmaps — condensing three years’ worth of upgrade and enhancements into three months. Every advantage is temporary. While some platforms are just catching up, others are differentiating. One thing is for sure; there’s a lot more innovation to come.
Prediction for Growth
The innovations we can conceptualise now are just the beginning. Businesses that will piques the interest of private equity and venture capital are those that feed into the big platforms. Plug-ins and APIs that either extend virtual conferencing, enhance collaboration or integrate seamlessly with other enterprise applications will be the new gold. Until now, these products have probably been great ideas waiting for a use case or a start-up looking for capital. Now they have a booming video conferencing market with an insatiable appetite to deploy solutions that will give them the edge.
I see six key areas which will interest investors as we ride the next wave of growth post the Zoom Boom.
1. Security — Companies that offer enhanced and differentiated protection for video conferencing have significant investment potential. They will find their technology (or perhaps their entire company) snapped up by the big platforms where sustaining a security edge is a critical part of the user experience.
While Zoom acknowledged some security issues, they recently introduced AES 256-bit GCM encryption (the gold standard). In their very first acquisition, Zoom recently acquired a company called Keybase which specialises in end-to-end. Companies like SQR Systems (specifically their Ceerus platform) encrypted military video conferencing for a decade before pivoting, now securing all the popular voice and text messaging platforms for businesses WFH.
2. Noise-cancelling tech — innovations in AI will be a growing feature of video conferencing as more of us work from home. Currently, there is little we can do about the neighbour’s dog, the errant car alarm or our rogue children. Microsoft Teams recently announced they are going to be using AI for this and others will soon be nipping at their heels.
3. Real-time translations and closed captions — closed captions are already available on Google Meet. Alibaba’s DingTalk offers real-time translation in multiple languages. These enhancements will only get better — fertile ground for the start-ups in this space as their technologies will be eyed closely by the major video conferencing players.
4. Real-time transcriptions — Imagine if virtual board meetings and minutes were automatically captioned, transcribed and stored as a pdf as part of the platform. If this is out there please let me know! I’ve lost count how many times someone has said, “if you’re typing can you please go on mute” during virtual meetings.
5. Better video compression — I’m tempted to give the fictional example of Silicon Valley’s Pied Piper. Better video compression will reduce delays and dropouts and lead to possibly 4k quality images and higher resolution screen shares over existing networks.
6. Vanity features — Clearer picture through better compression, higher definition cameras and better technology will unlock a range of vanity features designed to keep us hooked on our chosen virtual platform — blurred wrinkles, slimmer and somehow more dynamic! Virtual backgrounds have brightened up our homes and hidden our clutter, but this is just the start. DJI’s Osmo 2 has a range of ‘beautify’ treatments which could be applied to video conferencing and there are more to come.
The goldrush will start with the encryption, compression and AI technologies feeding into the big players. Where it will finish is unclear, but I’m determined this time not to miss out.