Wednesday 21 July 2021 11:00 am

Zoom has bought Five9 for $14.9bn but it will need to work hard to find its niche post-pandemic

Adam Sefton is digital strategy director at WPP brand consultancy Superunion

As the pressure for workers to return to the office continues to grow, Zoom is looking to a future where video conferencing software isn’t a replacement for in person social interaction.

It is clear that most businesses will expect their employees to return to the office for at least part of the working week. What a hybrid system looks like may vary from business to business, but whatever happens, the reliance on video telecommunications that has helped to push Zoom’s share price up by 383 per cent will be gone.

Earlier this week, Zoom announced it had bought contact centre software company Five9 for more $14.9bn to “deliver more happiness” to its customers, according to CEO Eric Yuan. The acquisition shows the beginning of an expansion into adjacent and complementary markets.

Five9 itself has been a beneficiary of the pandemic, it is cloud based, and one of the few systems that allow call centre employees to easily work from home. In Five9’s case, customers will always have to call companies, whether they’re working from home or the office. The expansion into call centres can be seen as a purposeful step for Zoom to carve out a market for itself outside of the pandemic.

Some sectors will continue to use video calls in ways developed over the pandemic. For example, the automotive sector allows customers to see work done on their car. Providing customer care over video calls adds a premium layer to an otherwise pretty standardised service. This is Zoom’s endgame: building on top of the existing experience, rather than seeking to replace it. 

This is in stark contrast to office meetings, where for many, a Zoom call will always be a cheap and dirty replacement for face-to-face contact.

Zoom’s previous two acquisitions – Keybase, a security and encryption firm, and Kites, a provider of real-time machine translation – are clearly connected directly to its core offering of video conferencing. The Five9 acquisition is different. Zoom’s ability to become a brand that augments and improves existing working experiences gives it a clear direction for growth. Office productivity, calendar and diary management all become interesting potential new areas for investment.

Another area ripe for expansion is email. Outlook is the dominant player, but there has been almost no innovation in email since Gmail developed conversation threads. Google hangouts and video chat were almost completely left behind during the pandemic. An email client more directly integrated with video could offer something different to Microsoft’s less than convincing combination of Teams and Outlook. 

There is no doubt Zoom’s growth has been exponential. At the beginning of 2020, Zoom logged 1.3 billion minutes of video calls. This year, they are headed for over 3 trillion minutes. However slowly it happens, the pandemic will end and Zoom’s continued success depends on its ability to adjust and expand. Zoom’s purchase of Five9 gives an intriguing glimpse into a new and different future for the video conferencing giant.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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