Specialist
Senior executive at Totalcom Solutions Inc
Agenda
- Zoom Video Communications' (NASDAQ: ZM) operating environment – sustainability of coronavirus- driven revenue momentum and churn risk
- TAM expansion from product extensions such as Zoom Phone, Zoom Rooms and Zoom for Home
- Competitive differentiation relative to Microsoft (NASDAQ: MSFT), Google, Cisco (NASDAQ: CSCO) and others
- Outlook for H2 2020 and beyond – longevity of remote work and strategic optionality
Questions
1.
What is your broader industry-wide overview of the trends or drivers that have recently been impacting the video conferencing segment the most? Obviously there have been considerable tailwinds secularly for video conferencing driven by the remote work due to the coronavirus.
2.
How would you size the TAM opportunity for Zoom? For example, Forrester reports 1.25 billion information workers as of 2018 – is that the right way to think about things? Based on that, how under- penetrated would you say the market still is?
3.
What are the biggest use cases and which are the more notable emerging ones? What are your thoughts on telehealth and what are you most excited for to drive revenues to the USD 200bn-300bn mark?
4.
You suggested that Zoom has a pricing advantage. Does the pricing advantage matter for the enterprise opportunities when you stack it up against the platform play you alluded to with Cisco and Teams, and the typical level of seats that enterprise customers garner?
5.
What else are you comparing when you stack Cisco, Webex and Teams against Zoom? Is there anything else to point to for revenue? Could you elaborate on feature functionality, integrations and speed to deployment, etc?
6.
How are customer preferences evolving? Are decisions made primarily by video over voice? Is there anything else to be said around customers’ priorities and what’s in Zoom’s favour?
7.
RingCentral is a little nascent on the adoption curve for enterprise, but what’s difficult to transition into? RingCentral phone-based into video or vice versa, Zoom video-based bringing out a phone product?
8.
How are you assessing the multinational corporations’ buying process? Is this allocated on a per-headcount basis, per-department basis, or is it more of an all-you-can-eat corporate licence with subscriptions shared among the entire company?
9.
Do you consider the coronavirus tailwind to be permanent or temporary? Thinking about the extremely high demand in March-May when corporations were preparing for remote work, relative to the summer months where remote working is well established, is it a one-time hit to the revenue opportunity or does demand sustain throughout the remainder of 2020 or even into 2021?
10.
How should we think about increased engagement actually being monetised? If already paying monthly for the licence, does the increased usage increase revenues? Or is it ultimately a stickiness factor?
11.
There was considerable press coverage in late March around security or privacy issues, but it seems that it wasn’t a big issue in terms of ability to win business, given Zoom’s Q1 FY21 earnings release. Is this a longer- term issue that we should continue to monitor? Would you say Zoom has properly addressed the issues or is there a risk of losing out on deals if this continues as a trend?
12.
Do you think Zoom’s ability to grow will be increasingly contingent on its ability to expand the product set? It launched Phone, even more recently Rooms, and it has the hardware-as-a-service piece. How should we think about the strengths of its add-on or subsequent products relative to the video? Do you think Zoom is executing well in product innovation?
13.
Is there anything that CIOs [chief information officers] still want from Zoom?
14.
How should we think about the Zoom for Home product? Do you think it will ultimately be desired at scale by customers? Is there a meaningful value proposition for that offering?
15.
Do you think Zoom’s hardware piece – akin to a computer monitor at USD 600 – will be meaningfully adopted or is that too premium to get a lot of uptake?
16.
How are you assessing Zoom’s ability to displace legacy incumbents such as Teams or Cisco? Is it easy to penetrate the accounts in organisations or corporations using Teams or Webex? Would a CIO ever conclude that it’s too costly or time-consuming to move off Webex or Teams given the seat size?
17.
At what point would most CIOs consider standardising across the organisation and paying for a licence? For example, would it be when one-quarter or one-half of the entire organisation is using Zoom on their own coin, is there a good rule of thumb here?
18.
You mentioned the forced-by-Microsoft rip and replace of Zoom. How concerned are you that critical-scale incumbents will be more aggressive and more frequently so, to the point that Zoom can’t prove the productivity and profitability improvements before there’s a negative effect of Microsoft and Cisco saying, “It’s us or we’re hitting the road”?
19.
What is your 1-3-year outlook on the general landscape? What wildcards would you encourage us to track?
20.
Is there anything we didn’t do justice to that you’d like to mention about the video conferencing segment?
