Zoom needs to redefine its place in the future of work

“Zoom finds itself at a critical point. Its video conferencing tools will play a vital role in the hybrid working model that will dominate the future of work, but its revenue growth will inevitably slow as the pandemic subsides and employees return to offices. In its latest results, the company reported a lower-than-expected increase in the number of large customers, raising doubts about the company’s future in the highly competitive collaboration tools market.

“Zoom is under increasing pressure to move beyond video conferencing and expand its communication platform. The company has made inroads into conference room hardware and developed a hardware as a service offering, but this might not be enough. Its failure to complete the planned acquisition of Five9 was a missed opportunity for Zoom to integrate contact centers into its portfolio.

“Microsoft and Meta (formerly Facebook) are championing the metaverse as the ideal environment to support hybrid working. Jumping on the metaverse bandwagon might look like the natural next step to Zoom, but it's a long-term project - not a short-term solution. Moreover, there's still much uncertainty around how the metaverse will materialize. Zoom doesn't have the same capabilities as Meta and Microsoft in technologies such as augmented reality (AR) and virtual reality (VR), which will be essential parts of the metaverse. Also, many employees are already suffering Zoom fatigue, having been forced to rely on video meetings during the pandemic. Consequently, it might be hard to sell them on the idea of avatar-driven collaboration.”

Laura Petrone, Principal Analyst in the Thematic Research team at GlobalData