Why Zoom is winning so much hype over Microsoft and Google – Business Insider

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.

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?

Experts told Business Insider that the answer to that question was a combination of Zoom's ease of use, quick and decisive action from the company amid the crisis, and a healthy amount of good luck being 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.

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

Rishi Jaluria, an analyst at D.A. Davidson, told Business Insider that Zoom benefited 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, Zoom also came up with a business-grade videoconferencing system so simple and easy that people still want to use it in their free time, Jaluriasaid 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.

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

The analysts also praised several of Zoom's choices as contributing to its success in terms of product decisions and 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 they have a cutting-edge PC or smartphone. That gave it an edge in the workplace and again with consumers.

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

Some of Zoom's popularity right now also stems from its quick reaction to the coronavirus crisis and decision to offer up its tools during the crisis, Dan Newman, an analyst at Futurum Research, said.

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

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.

Becoming a consumer-friendly app also comes with added responsibility, particularly around privacy and security, several analysts said. 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 about 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.

That's why Zoom may need to be proactive about upping its privacy and security features as its usage grows outside 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. Internet trolls have also recently been infiltrating Zoom calls to share indecent images or other spam. That prompted Zoom to address the issue and show people how to prevent that from happening in a blog post.

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 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 stop using it for happy hours and college classes after the 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 atpzaveri@businessinsider.comor Signal at925-364-4258. (PR pitches by email only, please.)You can alsocontact Business Insider securely via SecureDrop.

Go here to read the rest:

Why Zoom is winning so much hype over Microsoft and Google - Business Insider