At the time Zoom’s CEO, Eric Yuan decided to step into the video conferencing industry in 2011, it was already saturated with incumbents such as Google Hangouts, Microsoft-owned Skype, & Webex, owned by Cisco.
At the time of his departure from Webex, Eric was the company’s VP of Engineering. In other words, why did he leave Webex, to establish Zoom, and how did he go on to make Zoom the top video conference software on the market with a share of over 50%?
Zoom’s growth was accelerated by the coronavirus in ways that no one, not even Eric, could have expected, yet Zoom was already a successful product prior to the virus outbreak. We will discuss “How does Zoom make money” in this post in detail.
Due to the epidemic of 2020, Zoom’s popularity skyrocketed in an unprecedented manner almost immediately. In December 2019, more than 10 million people were using Zoom for their everyday meetings.
In addition to the firm’s revenue growth, Zoom’s extraordinary success can be witnessed in the workplace culture. Zoom earned more money ($1.021 billion) in the second quarter of 2021 than it did in the whole fiscal year 2020 ($622 million).
Before delving into Zoom’s business model, let’s take a look at the intriguing history behind what seems to be an overnight success.
How Zoom Makes Money
It is via Zoom Meetings, the company’s primary business, that Zoom generates the majority of its revenue. Additional subscription-based solutions include Zoom Phone, Zoom Rooms, Zoom Events & Webinar, and Zoom United. Zoom has just introduced two new products: Zoom Apps and OnZoom.
In order to understand well how does Zoom make money, let us take a closer look at each of the income streams.
- Zoom Meetings
User-to-user audio and video conferencing are possible with Zoom Meetings. This service is Zoom’s most often used and popular one. It’s possible to utilize Zoom chat to communicate text, photos, music, and other information during meetings.
A time limit of 40 minutes and a max of 100 participants in each group meeting are the only limitations of the free basic plan. Depending on the number of users and the scope of the company’s requirements, Zoom provides three different pricing tiers: Pro, Business, and Enterprise. Each of these tiers includes capabilities tailored to the company’s size and scope.
- Zoom Phone
Cloud-based phone service, Zoom Phone, may be purchased as an add-on together with the current Zoom service and incorporates conventional phone functions straight into the application, making Zoom a comprehensive collaborative platform.
Features like auto-attendant and call recording are included in the $10 per user per month price tag.
- Zoom Events & Webinars
Users may hold online web conferences using Zoom Video Webinars. The service is currently available for a fee of $79 per license per month, which covers up to 500 participants.
In addition to Zoom Webinars, which are great for presenting to a large audience in a single session, Zoom Events enable you to link many webinar sessions at once. Event management capabilities such as branded event hubs, registration and ticketing, and expanded reporting are also included in the event management package. The Event service costs $99 a month per license for up to 500 people.
- Zoom Rooms
Big businesses have been given the option to conduct Zoom meetings using Zoom rooms in a conference room system.
An initial 30-day free trial period is included with each room. After the free trial expires, customers may buy a membership to Rooms for $49 / month per room if they like to proceed using the service. In order to link additional conference rooms with Zoom rooms, companies will have to spend more money. For example, companies would have to pay $490 per month for a package that covered 10 rooms.
Users of Polycom or Cisco or Lifesize equipment may be able to start Zoom Meetings straight from these systems by connecting to the Conference Room Connector provided by Zoom.
It is possible for them to acquire gear from Zoom’s hardware partners such as Logitech, HP, and Lenovo if they don’t already have conference rooms in place. Zoom can also help with conference room setup if requested by clients.
- Zoom United
When you purchase Zoom United, you receive Zoom Meetings and Zoom Phone all in one place. Pro, Business, and Enterprise options are available based on the number of seats and features needed.
Zoom is currently one of the key players, in fact, a giant, in the video conferencing market. The Coronavirus pandemic skyrocketed its exposure to the masses and opened various streams of profits with the unexpected increase in demand from organizations, and educational institutions from all over the world.