Businessmodel of Zoom Video Communications

Customer Segments

Zoom has a mass market business model, with no significant differentiation between customer segments. The company targets organizations of all industries and sizes that seek videoconferencing solutions.

Value Proposition

Zoom offers three primary value propositions: accessibility, performance, and brand/status.

The company’s solution creates accessibility by providing a wide variety of options. It offers video conferencing, group messaging, simple online meetings, and a software-defined conference room feature. Furthermore, it can be used on the Windows, Linux, Mac, iOS, Blackberry, Android, and Zoom Rooms systems, as well as H.323/SIP room systems such as Cisco Tandberg and Polycom.

The company’s solution has demonstrated strong performance through tangible results for clients. High-profile examples of positive outcomes include the following:

• Trend Micro used Zoom’s solution to simplify its communication platforms, increasing its productivity by 20-39% when compared with its previous systems
• Global logistics company JAS used Zoom’s solution to increase its capacity for large meetings to as many as 100 two-way video participants, particularly useful for training sessions
• Focus Investment Banking used Zoom’s solution to host a wide variety of meetings, saving at least $25,000 a year in air travel while increasing brand exposure
• Access Physicians used Zoom’s solution to expand care access, resulting in reductions in critical care and emergency room visits, translating to significant savings for patients and its facilities

• BAYADA Home Health Care used Zoom’s solution for its 300 offices, resulting in increased efficiency, higher adoption rates, and lower total cost of ownership Zoom’s impressive performance has led to strong approval from customers. The company had a third party conduct a survey of its clients that showed a Net Promoter Score of 69, as well as these results:

• 94% of respondents said Zoom’s solution is easier to use than that of the competition
• 92% of respondents said Zoom’s solution is of a higher quality than that of the competition
• 87% of respondents said Zoom’s solution is more reliable than that of the competition
• 75% of respondents said Zoom’s solution has enhanced their productivity by at least 40% The company has established a strong brand as a result of its performance. It serves over 300,000 companies, including prominent clients such as Arista, UCLA, and SolarCity. It has also won many honors, including recognition as one of Trust Radius’s Top Rated Web Conferencing Software solutions (2016), Frost & Sullivan‘s Entrepreneurial Company of the Year (2016), an Emergence Award from Emergence Capital (2015), and recognition as a Gartner Cool Vendor (2014).

Channels

Zoom’s main channel is its website, through which new customers sign up for an account; however, it also maintains a direct sales team. The company promotes its offering through its social media pages, live demos, webinars, and participation in symposiums and conferences.

Customer Relationships

Zoom’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features self-help resources such as online training and answers to frequently asked questions.

That said there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Zoom’s business model entails designing/developing its software and maintaining/updating its software-as-a-service platform for customers.

Key Partners

Zoom maintains the following types of partnerships:

Integration Partners - The company works with firms that integrate their offerings into its product for an enhanced solution. Integration categories and some of their specific partners are as follows:

• Content Sharing – Microsoft (One Drive), Google Drive, Box, Dropbox
• Scheduling & Starting Meetings – Slack, Salesforce, Skype, Firefox, Microsoft (Outlook)
• Unified Login – Facebook, Google, Centrify, Okta, Microsoft (Active Directory)
• Marketing/Process Automation – Marketo, Zapier, Pardot, Infusionsoft
• Room Collaboration – Intel Unite, Kubi Technology Partners - The company works with firms that pair their offerings with its solution to produce complementary benefits. Partner types are technology vendors, application providers, and manufacturers. Specific partners include Altia Systems, Biscotti, CVI Gear, HoverCam, InFocus, Logitech, OpenSignal, Phoenix Audio Technologies, Revolve Robotics, Vaddio, and Yealink.

Refer-A-Friend - The company invites customers to refer its solution to their friends and associates. Referrals that lead to a purchase result in commissions for the customer.

Reseller Partners – The company works with firms that promote and sell its products to their customers in order to extend its reach. Partner types are value-added resellers and systems integrators with specializations in AV Technology and Video Collaboration.

Partners receive the following benefits:

• Permission to use the Zoom logo
• Co-selling opportunities with Zoom’s salesforce
• Access to competitive incentive programs
• Joint demand-generation activities
• Continuous interoperability testing
• Frequent market and product updates ### Key Resources

Zoom’s main resources are its human resources, who include the engineering employees that design its software and maintain its platform, the sales staff that promote it, and the customer service staff that provide support.

As a relatively new startup it has relied heavily on funding from outside parties, raising $45.5 million from 15 investors as of February 2015.

Cost Structure

Zoom has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed expense. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

Zoom has one revenue stream: the subscription fees it charges for monthly access to its software platform. Subscription plans are as follows:

• Basic – Free
• Pro - $14.99 per month per host
• Business - $19.99 per month per host (minimum of 10 hosts)
• Enterprise – Sales staff must be contacted for price quotes