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Zoom sees sales boom amid pandemic

BBC Technology 02 Jun 2020 10:48
By Natalie Sherman Business reporter, New York
A computer screen with four faces on itImage copyright Zoom

When it comes to its growth rate, video conference company Zoom has lived up to its name.

Use of the firm's software jumped 30-fold in April, as the coronavirus pandemic forced millions to work, learn and socialise remotely.

At its peak, the firm counted more than 300 million daily participants in virtual meetings, while paying customers have more than tripled.

The dramatic uptake has the potential to change the firm's path.

Zoom said it expects sales as high as $1.8bn (£1.4bn) this year - roughly double what it forecast in March.

"It's a huge opportunity," chief executive Eric Yuan told investors on Tuesday.

How did Zoom start?

Mr Yuan didn't intend to create Zoom for the masses.

Image copyright Getty Images

At the time, he faced doubts from many investors, who did not see the need for another option in a market already dominated by big players such as Microsoft and Cisco.

"What Zoom has done is kind of democratised video conferencing for all kinds of businesses and made it very simple for everyone from yoga instructors through to board room executives to deploy video," says Alex Smith, senior director at Canalys.

When the lockdowns started, Zoom lifted the limits for the free version of its software in China and for educators in many countries, including the UK, helping to drive its popularity.

Zoom said on Tuesday that sales jumped 169% year-on-year in the three months to 30 April to $328.2m, as it added more than 180,000 customers with more than 10 employees since January - far more than it had expected.

Reputational hit

Its reputation also took a hit, as the new attention prompted hackers to hijack meetings and exposed a host of security flaws, revealing that the firm had sent user data to Facebook, had wrongly claimed the app had end-to-end encryption, and was allowing meeting hosts to track attendees.

In April, Mr Yuan, who is a US citizen, apologised for the security lapses and the firm started rolling out a number of changes intended to fix the problems. Zoom has also announced a number of new appointments familiar with Washington politics, including H R McMaster, a retired Army general and former national security adviser to Donald Trump.

Analysts said they expected the company would overcome these reputational blows.

Analysts say they expect Zoom to maintain its focus on business customers, since that's how it makes money.

"The stakes are higher and the competition's getting tougher, so we'll see," says Ryan Koontz, managing director at Rosenblatt Securities.

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