Zoom Video Communications, Inc. is a technology company that operates in the communications sector. It launched its first product in 2012, allowing up to fifteen people to video chat simultaneously.
Millions of people worldwide – myself included – use Zoom’s video telecommunication application daily for work, school, and talking to friends.
Nevertheless, the globalized marketplace in which Zoom operates is highly competitive, with many other companies investing in new technologies to secure an advantage.
While Zoom is an industry leader, influential names in the technology world like Google and Microsoft also provide alternative meeting solutions that are attractive to consumers, thanks to the brand loyalty these companies have created over the past two decades.
Zoom’s net worth is estimated to be over $10.46 billion. However, this otherwise impressive figure pales compared to the global telecom market’s value of $1,707.96 billion in 2021.
This Zoom competitors analysis provides insight into the video communications industry and how Zoom positions itself strategically within this crowded space.
Bottom Line Up Front
The video communications industry in which Zoom must compete for a market share has grown exponentially since the Covid-19 pandemic in 2020. While this is excellent news for consumers like you and me, Zoom must respond rapidly to increasing pressure for innovation.
Despite fierce competition from established brands like Microsoft, Zoom has mainly been successful in securing its position as one of the significant video communications companies in the world.
List of Zoom’s Main Competitors
- Microsoft Teams
- Google Meet
- Webex Meetings
Zoom Business Strategy
Zoom operates a freemium business strategy similar to that of companies like Spotify. This means it offers users an essential service for free with the opportunity for upgrades that provide advanced features.
In Zoom’s case, it offers several different plans to users:
- Business Plus
Each plan is more expensive than the one that came before it, primarily because it caters to a more significant number of people. The most expensive plan allows up to one thousand participants for meetings lasting up to thirty hours. Imagine!
This is one of the most popular business models for software applications; it’s highly effective at getting people to sign up. I don’t know about you, but when a service is free to try, I am far more likely to use it.
There are additional ways that Zoom makes money, for example, through advertising, hardware sales, and investing in other startups. For more information about how Zoom generates revenue, read this article.
Zoom sought to differentiate its offering from competitors by creating a video conference platform that didn’t require you to install any software. However, there is a Zoom app you can download.
In July 2020, Zoom introduced two hardware products: Zoom Rooms and Zoom Phone. That same year, the company also introduced features designed to make the app easier for visually impaired, deaf, or hard of hearing people.
The fastest-growing markets for Zoom are Japan, the USA, and India.
Regarding Zoom’s growth strategy, it’s clear the company is expanding to as many corners of the globe as possible by making its product accessible to all. For example, certain K-12 schools in Germany, the UAE, the UK, the USA, and Canada can use Zoom’s services for free.
Zoom Competitors Analysis
Though Zoom has many competitors, it did become the most prominent video communication company in the world during the pandemic and since then has gone from strength to strength.
Here is an analysis of Zoom’s five biggest competitors.
Microsoft is one of Zoom’s most potent competitors due to its Teams product, launched in 2016 as part of the Microsoft Office 365 productivity suite.
Microsoft Teams is a highly successful collaboration platform that incorporates document sharing, video meetings, and many other tools for online communication. It is a popular choice for workplaces, particularly those that have begun working from home since the pandemic.
Teams has about 250 million monthly users as of 2021, and in 2020 it generated a revenue of $6.8 billion. By comparison, Zoom generated just $2.65 billion.
Crucially, both platforms have slightly different offerings, which helps to account for the difference in revenue. While Zoom is purely a video communications company, Microsoft Teams offers an integrated communications experience with multiple components. In my opinion, this makes it a more valuable platform for businesses to use.
Like Zoom, Microsoft Teams offers a freemium business model with different plans:
- Microsoft Teams Essentials
- Microsoft 365 Business Basic
- Microsoft 365 Business Standard
The platform includes many features, such as a chat function, online meetings, audio conferencing, teams and channels, document storage in Sharepoint, video calling, and screen sharing.
Zoom’s market share in 2021 was an astonishing 48.7%, whereas Microsoft Teams had a market share of 14.5%.
Google developed Google Meet as one of two applications to replace Google Hangouts. It hasn’t been around for as long as many of its competitors, having been launched in March 2017. Still, it does have the benefit of Google’s immense wealth and existing success in various technology markets.
Again, Google Meet operates a freemium business strategy. In fact, anyone with a Google account (nearly everybody, then) can create an online meeting with up to 100 people for as long as 60 minutes.
Additional plans include Google Workspace Individual and Google Workspace Enterprise.
Between January and April 2020, Google Meet grew by 30, with 100 million users accessing the platform daily. By comparison, Zoom achieved 200 million daily users as of 2020.
Some features of Google meet include:
- Multiway audio/video calls
- Noise-canceling audio filter
- Screen sharing to present documents
- Low light mode for video
As someone who uses video calling platforms daily, it’s clear that Google Meet aims to develop new solutions to user problems that set it apart from competitors by providing a better experience.
In 2021, Google Meet had a market share of 21.8%, putting it ahead of Microsoft Teams. Again, I suspect this is due to the former offering services to a broader array of people, including individual users, rather than strictly businesses and groups.
As a technology company, Google has many different products, so it’s difficult to determine how much revenue comes from Google Meet alone.
In 2021, Google made a total revenue of $257.63 billion. This means that, while Google Meet currently has a smaller market share than Zoom, Google has the potential to pour more money into research and development, as well as marketing.
Skype is a technology company founded in 2003 and headquartered in Luxembourg. The Skype app offers video calls and online messaging services.
Before Covid-19, Skype was one of the most popular video communication companies, but the pandemic saw Zoom and Microsoft Teams gain significant footing within the industry, negatively impacting Skype.
In fact, between 2020 and 2021, Skype saw a 25.8% loss of market share, going from 32.4% to just 6.6%.
This is a typical example of how certain technology-based products can very quickly go out of fashion when something newer, faster, and more streamlined comes along.
Competitors like Zoom are getting hundreds of millions of users daily, whereas Skype receives just over 100 million a month on average.
Interestingly, Skype is part of Microsoft, yet it performs significantly worse than Teams.
While Skype initially made money by partnering with other companies that sold products like headsets, today, it makes money using a freemium model by selling credits and subscription services.
Purchasing credits allows you to send texts and make calls anywhere in the world, but this seems outdated, considering that most people nowadays use monthly phone contracts.
RingCentral provides state-of-the-art cloud communication solutions to companies across the world.
It was founded in 1999 but didn’t receive its first round of venture capital investment until 2006. Five years later, in 2011, RingCentral added Silicon Valley Bank and Cisco to its investors, securing $45 million.
The company’s primary product is RingCentral Office, which includes a company directory, call handling and forwarding, auto-attendant, video conferencing, and screen sharing.
In 2021, RingCentral announced a new product, RingCentral Rise. It is described as a secure and strategic communications platform for service providers across the globe.
RingCentral uses a highly successful subscription-based revenue model. In fact, between 2020 and 2021, the company’s subscriptions revenue in Q4 increased an impressive 37% year-on-year to $420 million.
At the heart of RingCentral’s business strategy is consistency in growth. It has certainly managed to achieve this by leveraging the benefits of cloud communications in our increasingly online world.
Still, I think RingCentral hasn’t achieved the same brand recognition as some of its competitors because its target audience is primarily large corporate businesses.
Webex by Cisco is an American enterprise solution for video conferencing, screen sharing, online meetings, and webinars. It was founded in 1995 as Webex but was taken over by technology giant Cisco Systems in 2007. The Webex headquarters are in San Jose, California.
Like RingCentral, Webex is not designed to be used by individuals; instead, it is the leading solution for large companies. Cisco’s ambition has always been to make Webex the leading collaboration brand.
There have been many recent product developments aimed at creating an excellent experience for hybrid work. For example, speech enhancements, open APIs, noise removal, custom layouts, and gesture recognition.
Despite Cisco’s attempts to become the industry leader, Zoom is still ahead of Webex regarding user-friendliness and range of features. In my experience, Webex is undoubtedly more challenging to use than Zoom, and with so much of our lives and work now being online, this feels like a significant hindrance.
In 2021, Cisco’s software revenue was $15 billion, but it’s important to note that Cisco is a large company with many offshoots; this is not solely revenue from Webex.
Zoom SWOT Analysis
Zoom’s SWOT analysis below shows the company’s strengths, weaknesses, opportunities, and threats.
- Continual revenue growth, going from $331 million in 2018 to $2.6 billion in 2020
- Easy-to-use product that integrates with modern life
- The Freemium model is good at attracting new customers
- No physical product – it’s easy for the company to operate internationally
- The brand name is instantly recognizable
- Has the most significant market share
Zoom’s greatest strength is undoubtedly how easy its video calling service is to use. There’s no requirement to download an app, and it has plenty of features to give an excellent user experience.
Further, Zoom has the capacity to be used by individuals for calling friends and families as well as businesses. It is fairly unique for a video communications company to successfully attract both personal and professional demographics.
- Encryption issues cause privacy concerns
- Security issues relating to data breaches
- Zoom Rooms offer a poor user experience
- Some features haven’t been optimized
Zoom’s biggest weakness is the security of its platform. Not only has it been criticized for its data-sharing policies, but also for allowing hosts to possibly violate the privacy of people participating in their calls.
In addition, in March 2020, an article from Motherboard found the Zoom iOS app was sending analytics data to Facebook without informing the user. Issues like this can seriously damage the company’s reputation; for Zoom, security should be paramount.
- High demand due to increased hybrid working in the post-pandemic world
- Technology is a rapidly evolving industry – Zoom has the opportunity to continue innovating at a fast pace
- Diversification of services – video conferencing is helpful, but to stay ahead, Zoom will need to launch new products
Zoom’s most significant opportunity comes from the increased prevalence of at-home and hybrid working since the global pandemic. More people are turning away from traditional office work, and many companies have realized they can save money this way.
- Highly competitive industry with many competitors who offer similar services
- The post-pandemic world may see a reduction in the need for video calls
- The technology industry is highly susceptible to trends; Zoom could quickly go out of fashion and be replaced by an alternative
The most prominent threat Zoom faces is the sheer number of competitors that offer a similar video calling service. There is significant pressure on Zoom to continually innovate, maintaining its competitive advantage.
Now more than ever, consumers are looking for the best product that’s easiest to use; another company could quickly come into the industry with revolutionary innovation and steal a portion of Zoom’s market share.
Zoom Competitors Analysis FAQs
Question: What makes Zoom different from other video communications companies?
Answer: If you ask me, the thing that makes Zoom stand out is its easy use. As long as you have an internet browser, you can jump on a call. In today’s society, everything is about speed – people don’t want to have to jump through hoops, and zoom realized that and took advantage of it.
Question: What is Zoom best known for?
Answer: Zoom is iconic in many ways, thanks to its role in pandemic life for millions of people. When we were all trapped at home, our lives went temporarily online, and Zoom became a significant part of that.
Not only did Zoom keep companies connected, but it also helped families stay in touch when they couldn’t get together in person. I think that’s what Zoom will always be remembered for.
Question: Which is the best video communications company?
Answer: Zoom has the most significant market share at around 47%, so at least in those terms, it’s the best video communications company. Furthermore, Zoom appeals to individuals and businesses alike, whereas many of its competitors target one or the other. This widespread appeal also solidifies Zoom’s status as the leading company.
Question: Is Zoom an excellent company to work for?
Answer: In 2021, Zoom was among the winners of Glassdoor’s Employees’ Choice Awards “Best Place to Work,” suggesting employee happiness and satisfaction are both high. It also made this list in 2018 and 2019, an impressive feat.
Zoom is the world’s leading video communications company with a strong focus on streamlining the user experience. Its global presence is strong, and in recent years, it benefitted from increased demand for its services thanks to the Covid-19 pandemic.
Going forward, Zoom must continue to innovate and release new features to stay relevant, especially as more people move away from online work and head back into the office. Fortunately, hybrid working remains popular, so Zoom still has opportunities to continue its impressive growth.
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