A quick take on ZOOM’s growth strategy
Published Date: 2019/09/07
As video conferencing industry is getting crowded, getting an understanding of the point of view in its growth strategy can help to firm up expectations. Using Earnings Intelligence’s analysis, the following is a summary extracted from ZOOM’s recent earnings call transcript:
What to expect regarding year-over-year expand and revenue?
"…focused on the strategy of land and expand."
"I think as we further expanded into the large enterprise international and also get into the unified collaboration market, as Ryan's experience can really have us."
" to have a FedRAMP certificate is very important for us to expand into the public sector."
"…we continue to start with small seated land and expand and then growing up from there."
"As we further expand into the international market, doubled our sales and R&D team, we are going to hire more and more people, top indiscernible However, how to maintain our delivering happiness culture, make sure all of us always look at everything from customer perspective, right, responding to customer issues in a timely manner."
"… on margins in the second half of the year are around expanding data centers, we are planning to add two to three more, but that is not necessarily having to do with Zoom Phone."
"And even if you look at the total revenue, probably driven by the revenue team, as we further expand into the international market, with Ryan's good background, I would say, the channel contribution will play a big role in the future."
"Like Verizon partnership just started and we are going to more and more channel partners to help us expand into the international market."
"Over the past several years, we started expanding into large enterprise customers."
"So, when we started, we were focusing on high-tech market and later on we expanded into the high-end, as well as healthcare market."
"And second, Ryan Azus joined Zoom as our Chief Revenue Officer."
"Key drivers of our revenue performance included both our acquisition of new customers and expansion of Zoom's footprint within existing customers."
"Specifically, new customers accounted for approximately 61% of our year-over-year growth in subscription revenue while the remaining 39% was due to additional purchases from existing customers."
"Geographic expansion is another driver of our revenue growth as we continue to deliver strong growth internationally."
"In Q2, our APAC and EMEA revenue combined grew a 115% year-over-year and represented approximately 20% of revenue."
"Revenue from the Americas was up 91% year-over-year and represented approximately 80% of revenue."
"In terms of channel strategy, we just announced the Verizon partnership and the channel always plays a big role for our revenue growth."
"… see more and more of our revenue base come from up market customers is that's really one of our key strategic focus areas."
Is video cloud architecture a differentiator for Zoom?
"Well, so in terms of large enterprise customers, for sure, when we started, we were focusing on SMB customers, right. Over the past several years, we started expanding into large enterprise customers. And the reason why we do see the -- we -- almost every enterprise customers, we do see a lot of users. Even for the large enterprise customers or the standardize on other platform, we see the one user, two user, one department, and two department, they all use their own budget to deploy Zoom. The reason why they are not happy about any other services in terms of ease-of-use, the quality, like this what's your background or feature and consistent experience across the desktop, mobile and conference room statistics, right. I think the combination of technology, ease-of-use, security will win the customer trust, right. If you look at all other solutions out there today, all of them architecture is very old, right. Not a design for modern video cloud -- video first architecture. That's why we're ahead of any of our competitors for several years. Otherwise, I will go back to work all the weekend."