Zoom looks for post-pandemic, APAC growth

To say 2020 has been a significant year for Zoom Video Communications would be an understatement, but the video conferencing company is looking for continued growth beyond the pandemic as workplaces take on a new definition. It also is keen to expand its footprint in Asia-Pacific, where it has a data centre in Singapore and has seen accelerated growth. 

The year indeed had been “hyper accelerated” and “dramatic” for Zoom, which clocked 200 million meeting participants a day worldwide in March during the height of the pandemic, said Abe Smith, Zoom’s head of international. In comparison, this figure was at 10 million just a couple of months earlier in December 2019. By April, the number of daily meeting participants had climbed to 300 million, Smith said in a video interview with ZDNet. 

Zoom reached 370,200 paying enterprise customers with at least 10 employees in its second quarter, up 458% from just 66,000 a year ago. Ended July 31, the quarter also saw the company hit $663.5 million in revenue, up 355% year-on-year, 

Asia-Pacific is registering similar growth rates, according to Smith. For the second quarter, revenue from the region increased 572% year-on-year to some $81 million, or about 12.2% of the company’s total revenue. Its Asia-Pacific region includes China, Australia, and Japan. 

Zoom also saw accelerated growth in Singapore, he noted, where it clocked a 65-fold increase in the number of free accounts — where meeting sessions are capped at 40 minutes — in April, compared to January, while paying customers with at least 10 employees grew three-fold. Its local clientele includes Grab, GIC, and the Ministry of Education, where 45,000 educators across 400 schools had used the video conferencing platform extensively during the country’s lockdown earlier this year. 

The city-state also was home to the company’s first data centre in Southeast Asia, operational since July and joining 19 other sites worldwide, including two data centres each in Japan, India, and Australia.

The need and location for new data centres were assessed based on capacity and performance, Smith said, adding that the company would continue to expand its datacentre footprint. The company also pumped up capacity via cloud partners such as Oracle.

To boost its development efforts, Zoom recently unveiled a technology centre in Bangalore, where it would be looking to increase its engineering headcount. It also continued to maintain an engineering and devops team in China, despite having exited the market in August. 

Smith said: “So we still have a strong headcount there. While we’re not selling directly in China, we’re empowering native solutions [there] so products, which now are delivered through our local partners, are designed to serve the local market.” He added that having tech facilities in India and the US enabled the company to have a more diversified engineering team.

“We’re not stepping back from Asia, we’re leaning in,” he said, adding that Zoom offered a service that was relevant both in the current pandemic as well as beyond it. 

Tapping the untapped video market

Organisations in Asia-Pacific were struggling to understand how their workplace would function in the future, which Smith said likely would see the emergence of a hybrid work environment where some employees would return to the office, while others would continue to work from home. 

“So businesses need the flexibility and we need to help people solve that problem around how you connect, regardless of where you are and what device you have,” he said, pointing to Zoom Phone. Integrated with its core platform, the cloud phone service supports calls made through traditional PSTN (public switched telephone network) and allows customers to consolidate their PBX system and enterprise communication tools into the video platform. 

Businesses also were turning to Zoom to transform their own service offerings, he added. HSBC in the UK, for instance, had begun tapping the video conferencing platform to facilitate mortgage appointments, allowing home buyers to move ahead with their loan application amidst the global pandemic and giving customers more flexibility with appointment times. 

There was potential for more use cases where, for instance, helpdesk calls could be video calls, Smith said, noting that Zoom currently was integrated with some 600 applications, including Salesforce.com and ServiceNow. 

“The addressable market for what we do with video is massive [and] the opportunity with Phone is huge,” he said. “Before the pandemic, there were 60 million conference rooms worldwide, of which less than 5% were video-enabled.”

“As people return into the office, the need to connect with those working remotely [and] those from the office, that’s a massive market,” he noted. There also were opportunities in the home market, he added, and Zoom would continue to introduce products and features designed for this space. 

For some customer installations such as the deployment for Singapore’s Education Ministry, he added, customised features were built into the product, including mobile support and integration with single singon service and other learning systems. 

Acknowledging that it had hit a snag earlier with security issues, he said the company worked to resolve these, freezing development work for 90 days and dedicating the time to enhancing security. It also announced more than 100 security features, including the ability to push and force passwords and advanced encryption, as well as increased its data centre infrastructure and acquired encryption startup, Keybase. 

More security consultants also were brought into the company, and a CISO council was established, he said. In Singapore, it also worked with the Education Ministry to address security concerns, leading to the rollout of customised features such as the single signon and other access control policies.

Singapore schools had tapped Zoom as they began home-based learning, but this was quickly suspended after two reported incidents of Zoom-bombing within virtual classrooms. In one such breach, male strangers hijacked a lesson to broadcast obscene images and asked female students to expose themselves. Use of the video platform resumed after added controls were put in place and some features turned off. 

Smith alluded to the introduction of more features at the company’s Zoomtopia event next week, which he revealed would include an APAC-focused track.

Asked if security features would remain available to all its customers, he said security had to be “foundational” and would remain so. “Everyone, including those using our free service, wants to have meetings that are safe,” he said. “Sometimes, there are more stringent requirements for governments, such as meetings involving classified documents…these are areas we need to work with [customers] that can include unique systems or unique approach to integrating [added features].”

He noted that while some of such features would be accessible for paying customers, meetings should “always be safe and secure”. 

Zoom in June backtracked on an earlier decision to limit support for end-to-end encrypted calls for its paying customers, making the feature available to all users.

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