How Zoom beat out Microsoft, Google, and Cisco to win customer love and tons of hype amid the coronavirus crisis, according to experts

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How Zoom beat out Microsoft, Google, and Cisco to win customer love and tons of hype amid the coronavirus crisis, according to experts

Eric Yuan Zoom

REUTERS/Carlo Allegri

Zoom CEO Eric Yuan.

  • The coronavirus crisis has turned Zoom into a household name: People are turning to video calls to talk to colleagues, classmates, friends, and family as the coronavirus crisis keeps them indoors and isolated.
  • In so doing, it has overtaken competitors like Microsoft Teams, Cisco Webex, and Google Hangouts to become the most prominent videoconferencing software.
  • Zoom was intended as a corporate conferencing system but has gotten popular with consumers because it "just works," analysts say - and that consumer popularity has in turn made it even more of a hit with its original corporate-customer demographic.
  • Zoom also has more subtle advantages, experts say: It lifted limits on its free product amid the crisis before its competitors did the same. And it has invested in making sure that you can make Zoom calls from both old and new devices, meaning that almost anybody can take advantage.
  • Click here for more BI Prime stories.

In just a few weeks, the coronavirus crisis has turned Zoom into a household name.

As people increasingly stay home to help stop the spread of COVID-19, the coronavirus disease, they're turning to Zoom to collaborate with colleagues, attend school, keep in touch with family and friends, and even attend yoga classes.

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And Zoom is seeing the benefits: The company's stock has just about doubled since January 31, even as it told investors that it had to increase its cloud-computing spending to keep pace with its rapid growth. While Zoom isn't sharing user numbers, it hinted earlier this month that it has seen a dramatic increase in usage, and its smartphone apps have rocketed to the tops of the download charts.

In short: Zoom's popularity as a business tool is turning it into a widely used consumer tool, which is in turn making it a household name among both types of customers - and driving up the value of the company.

Amid this rapid rise, the big question has been: How did Zoom, a relative upstart that focuses mainly on corporate customers, find itself in the spotlight when there are so many other options out there, including Google Hangouts, Microsoft Teams, Cisco's Webex?

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Experts tell Business Insider that the answer to that question has been a combination of Zoom's ease-of-use, quick and decisive action from the company itself amid the crisis - and a healthy amount of having the good luck to be in the right place at the right time.

"I don't know of any other tool that started as an enterprise software product that became a consumer product so quickly or heavily," Alex Zukin, an analyst at RBC said.

'That's the brand they know'

Ultimately, the analysts say, Zoom couldn't be a success amongst consumers without first being a hit in the workplace.

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Rishi Jaluria, an analyst at D.A. Davidson, tells Business Insider that Zoom is benefiting from a certain dynamic: People are now using Zoom for hours every day at work or to attend classes virtually. So when those same people go looking for ways to socialize virtually, they turn to Zoom because it's the system with which they're most familiar.

That said, it's to Zoom's credit that it came up with a business-grade videoconferencing system so simple and easy that people still want to use it in their free time, Jaluria says - and that, in turn, has given Zoom plenty of positive word-of-mouth and attracted new users into the fold.

"That's the brand they know, it's known to be easy to set up and run, and I think there is a brand association, not only is this is the way things are done, but Zoom is seen as the cooler or hotter brand," Jaluria said.

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Jaluria said even at his own firm, employees use Cisco WebEx for official purposes, but that the hype around Zoom is such that the younger employees use it to organize virtual happy hours after work.

Smart decisions

The analysts also praised several of Zoom's decisions as owing to its current success - first, in terms of product decisions, and then, in terms of its response to the coronavirus crisis.

Beyond flashy, popular features like its custom video backgrounds, Zoom invested from its early days in ensuring compatibility with all types of devices, new and old. That's paying off now, because it means that Zoom can reach a wider net of users, regardless of whether or not they have a cutting-edge PC or smartphone. That gave it an edge in the workplace, and again with consumers.

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"Particularly in the enterprise, The ability for Zoom to basically work with all of your existing legacy hardware from a video conferencing perspective was a huge boost and benefit," Zukin said.

Some of Zoom's popularity right now also stems from the fact that it was quick to react to the coronavirus crisis, and offer up its tools to be helpful during the crisis, said Dan Newman, an analyst at Futurum Research.

As the end of February, Zoom lifted the 40 minute limit on conference calls in China, as CEO Eric Yuan said he wanted to do something to help those affected. It's also made the product free for schools. After that companies like Slack, Cisco, Google, Microsoft and others started following suit.

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That gave Zoom a head start to make itself known as a way to help people connect during even the earlier stages of the pandemic, Newman said.

Privacy and security concerns

Becoming a consumer friendly app also comes with added responsibility, particularly around privacy and security, several analysts noted. The fact that it's so easy to join and participate in Zoom calls is a big part of its appeal, but it also raises questions around its privacy and security controls.

"I think people look at Zoom as an enterprise application that would have the same stringent data privacy rules as a Microsoft or a Cisco, but they don't," Newman said.

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That's why Zoom may need to be proactive about upping its privacy and security features, as its usage grows outside of business needs, Jaluria said. Like Facebook or Twitter, the company has to start getting serious about protecting consumer users. That's going to be a learning process for Zoom, which previously mainly dealt with customers who were using it in a professional context.

"Zoom, I think proactively, may need to be in a position where people can better monitor their own content, or Zoom can better find people who are irresponsibly using the product, and a way of kind of policing content," Jaluria said.

Security experts have highlighted concerns about a lack of clarity over the firm's privacy policy. Also, recently, internet trolls have been infiltrating Zoom calls to share indecent images or other spam. This prompted Zoom to address the issue and show people how to prevent that from happening in a blog post.

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Zoom said it "only collects user data to the extent it is absolutely necessary to provide technical and operational support, and to improve our services," and does not "does not sell user data of any kind to anyone."

One thing that analysts agree on is that Zoom will change the way we work forever, even if people may not keep using it for happy hours and college classes after this crisis ends. And all those college kids who are using Zoom for class now, will likely continue using it even after they graduate, Jaluria said.

Got a tip? Contact this reporter via email at pzaveri@businessinsider.com or Signal at 925-364-4258. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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