Zoom hunts for new growth

Zoom Video Communications revealed on Monday that it expects sales to grow much more slowly than expected, “ramping up pressure on the software vendor to show it can continue to grow beyond the pandemic boom”, says Joseph Williams on Bloomberg. The firm has already said it is expanding its products “in a bid to broaden its business and ease investors’ fears”. These include a new cloud contactcentre product, an internetenabled replacement for landline phones and technology to improve hybrid in-person/remote meetings.

Zoom desperately needs to find another source of revenue: the promise of a return to normality has caused it to “shed more than threequarters of its market value from its peak”, says Dan Gallagher in The Wall Street Journal. Still, its decision to reinvent itself as a “unified communications” company by moving into customer service calls is risky. Investors have taken a dim view lately of cloud companies that are “entering investment mode at a time when sales are also slowing”.

Zoom’s chances of repeating its video-conference success elsewhere are “slim”, says Lex in the Financial Times. Still, the core business remains strong. The company is generating a “comfortable cash cushion and growing profits”. Meanwhile, with hybrid work patterns suggesting that video conferencing “is here to stay”, Zoom remains one of the providers that is “easiest to use” and the ”most reliable” (rival Google caps free calls at one hour). So while “the days of triple-digit growth are over”, that “does not mean the business model is defunct”.