Share Name Share Symbol Market Type
Zoom Video Communications Inc NASDAQ:ZM NASDAQ Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -3.84 -0.96% 396.743 396.71 396.99 404.3478 391.82 395.7325 1,496,992 15:58:18

Zoom Wants You to Zoom Even When Using Other Companies' Apps

22/03/2021 1:59pm

Dow Jones News

Zoom Video Communications (NASDAQ:ZM)
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By Aaron Tilley 

After a year in which Zoom Video Communications Inc.'s software became the go-to video-call app for many people stuck at home, the tech company now is trying to get other businesses to adapt it as their own.

Zoom said Monday that it would start selling its videoconferencing technology so other companies can embed it in their own products, Chief Technology Officer Brendan Ittelson said. The calls would still run over Zoom, he said, but wouldn't carry the company's brand. The San Jose, Calif.-based company so far has relied largely on users making calls via Zoom's app.

Businesses that opt for the new arrangement would pay Zoom for calls made on a per-minute basis, with the first 10,000 minutes each month free, Mr. Ittelson said. Packaging its service directly into customer apps is an approach that puts Zoom more directly in competition with services offered by others such as Amazon.com Inc., which also offers videoconferencing technology that businesses can embed in their software tools.

Selling the technology for others to integrate would enable healthcare providers to more directly offer patients virtual checkups, Mr. Ittelson said. A social-media company could add live streaming to its app, he said.

"We're looking to definitely expand our business and move into a platform that offers solutions to businesses with various needs," Mr. Ittelson said in an interview. "This is really expanding the menu to meet business needs."

Zoom has been among the biggest beneficiaries of the pandemic-era shift to remote work, gaining popularity among schools and individual users as well as companies that use its paid service to connect with staff and customers.

Zoom this month posted record annual sales, which quadrupled to $2.65 billion in 2020, and forecast that revenue would rise more than 41% this year.

Its success fueled a meteoric rise in Zoom's stock. Shares peaked in October at $588.84, up from $65 when the company started public trading in 2019, giving Zoom a market valuation topping $170 billion.

But maintaining the growth Zoom and others have enjoyed during the coronavirus pandemic has become an increasing concern for executives and investors. Businesses such as food-delivery company DoorDash Inc., online shopping outlet Etsy Inc. and home-improvement outlet Lowe's Cos. that benefited from changes in spending habits have said they are bracing for them to shift again.

Zoom shares have retreated about 20% over the past three months amid concern the Covid-19 vaccine rollout could weaken growth prospects by helping to bring about the return of more in-person gatherings.

"Zoom is in a situation where they've gotten insane amounts of growth during the pandemic, but they need to find additional drivers," said Rishi Jaluria, an analyst for investment research firm D.A. Davidson & Co.

The company in recent months has launched several initiatives to maintain its relevance in day-to-day life during the post-pandemic era. Last year, it announced a new service, called OnZoom, to allow users to host charged-for events, such as yoga classes or guitar lessons.

Zoom's Mr. Ittelson said customers have been asking the company for the ability to integrate their tools more tightly with its videoconferencing technology.

The company has allowed customers to integrate its videoconferencing feature previously, but those applications included the Zoom brand. Offering a more seamless version tied into customers' own applications, Mr. Jaluria said, is likely to speed broader adoption and open up new business. "That's why there's been a big push to build a developer ecosystem," he said.

It is also the kind of video service that others already have been selling. Last year, Amazon struck a partnership with workplace collaboration company Slack Technologies Inc. to bring its videoconferencing tools, called Chime, directly into the chat app. Zoom also would compete with Twilio Inc., a quickly expanding company that provides communications software for businesses. Zoom's core app already is in fierce competition with another tech giant, Microsoft Corp., which offers similar features in its Teams software.

As part of Zoom's push to widen adoption of its app among paying business customers, the company has been adding features to augment its videoconferencing function by forming partnerships with others. Users, for example, can now use Zoom's app to look at documents stored in the data-storage system provided by Dropbox Inc. Previously, they had to shift to Dropbox's app.

Zoom said 1,000 such apps are now available on its platform. On Monday, it also announced analytics tools for these apps so software developers can track how well adoption of the app is doing.

Write to Aaron Tilley at aaron.tilley@wsj.com


(END) Dow Jones Newswires

March 22, 2021 09:44 ET (13:44 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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