Zoom may be struggling to get more individual users to pay for licenses but the company is continuing to make inroads into enterprise telephony and the contact centre – its Q2 earnings showed Zoom Phone hitting four million users, and the company clinching two 125,000+ seat deals with a global bank and a major retailer.
Whilst earnings growth disappointed analysts (Zoom revenue grew 8% year-over-year to $1.099 billion, $16 million less than expected for the quarter), enterprise adoption was a strong point – with Zoom reporting revenue from enterprise customers growing 27% year-over-year to reach a healthy 54% of total revenue.
(The company is eying growing market share as enterprises move away from expensive legacy telephony with its hardwired desk phones and landline infrastructure in favour of more flexible cloud-based UCaaS offerings and is offering customers the ability to keep their current PSTN service providers by redirecting existing voice circuits to the Zoom Phone cloud, or implementing a hybrid solution in a bid to make the move smooth.)
As Zoom President Greg Tomb told analysts on an August 22, 2022 earnings call: “We see a large number of our enterprise customers today looking for ways to consolidate and have a more modern communication experience and the fact that it’s fully integrated with video makes it a natural place to go… We’re increasing our focus up to the larger enterprise side… because there is a lot of money there that we are just missing.”
Zoom Phone launched in January 2019 as part of a push to build a Unified Communications as a Service (UCaaS) set of VoIP offerings spanning video, audio, web conferencing, enterprise telephony and messaging.
And in February 2022 Zoom also launched Zoom Contact Centre, an “omnichannel contact center platform optimized for video with a robust suite of channels, such as video, voice, SMS, and webchat [the latter two in beta], in a single, user-friendly experience” – with CEO Eric Yuan telling analysts this week that “we are going to be very aggressive and double down on that from Zoom’s perspective because the product is ready.”
With its May 2022 agreement to acquire Solvvy, a conversational AI and automation platform for customer support, Zoom is aiming to land and expand in the enterprise space as customers look to improve agent productivity and drive down cost to serve with automated but personalised resolutions for customers.
As Tomb noted: “Almost every one of [of our enterprise customers is] replacing an older legacy solution, one that is costly and complex. And most of them… don’t have the flexibility to enhance them, right? So we bring a more flexible, innovative solution that could be implemented very fast right? It is integrated with our other solutions. It is a lower cost in many cases. And people have been very positively impressed with the solution.”
Zoom now has 204,100 enterprise customers and ended the quarter with approximately $5.5 billion in cash, cash equivalents and marketable securities, excluding restricted cash. The quarter was its fifth straight in which Zoom reported over $1 billion in revenue. Enterprise customers include UCLA, Warner Bros., and Discovery Inc.