Zoom (NASDAQ:ZM) undeniably has a great product. But if it can take that product and expand it into a true platform (or ecosystem), that can mean an amazing future for the company (and its stock).
In this Backstage Pass video, which aired Sept. 28, 2021, Motley Fool analyst Yasser El-Shimy and Fool contributors Brian Withers and Jon Quast talk about the five key ways Zoom is trying to go from product to platform.
Yasser El-Shimy: Absolutely. Thank you, Brian. I want to say here that the slide that says Product and Platform, as I went through these slides, it almost felt that it should be titled Product to Platform. As in Zoom is moving from just being a single product into being an entire inclusive communications platform. If you show the next slide, please? Yeah. [laughs] That’s the one I was talking about.
Brian Withers: There we go.
El-Shimy: Should really be Product to Platform. Next, please?
Withers: I think that’s a great point.
El-Shimy: Yeah. Here’s why. If we look at what’s on the slide here, sure they talk about meetings, chats, securities. It’s so easy to get lost in the details, but you don’t want to miss the forest for the trees. What do they mean when they talk about continuous collaboration, your hybrid workplace, absent integration, content outreach and so on? They really just want to be the platform on which almost all work is conducted moving forward. When they talk about continuous collaboration, that tells me that Marc Benioff with his new acquisition of Slack should watch out, because Zoom is actually coming after that space of work collaboration. This is no longer, or at least the vision of Eric Yuan at this point, is for Zoom not to simply be that video product that people can use to talk to one another. It’s going to be the platform for work.
They have developed all of these new capabilities to try and buttress, first of all, the quality of the meetings, but to extend the work collaboration beyond the meetings into other forms. We’re going to go through those in a second. New hybrid workplaces. Again, this is a vision for a world where our work does not end simply at the office and a world where we’re not always physically present for every single meeting, for every single conversation. There’s apps and integrations and that’s more about how Zoom is going to fit within the entire suite of office productivity software. Where do these other software solutions fit within that Zoom platform I was just talking about. If we can go to the next slide, please. Perfect.
The first one we’re going to talk about is continuous collaboration. First of all, they really talk about enhancing that meetings experience to try and elevate it and they introduced all sorts of new features. I believe the next slide may show some of those, yes, there it is, including, for example, instantaneous translation. If you’re speaking with someone from a different background who speaks different language, you’re certainly able to communicate via subtitles as the meeting effectively just translates everything you say and the other parties as well.
They talk about chats. You’re able to continue talking with that person once a meeting ended. The chat in Zoom as we currently know it is just the panelists being able to send messages back-and-forth while a meeting is taking place, but what they are talking about is more akin to a slide, where we’re still going to be continuing to chat on Zoom before and after the meeting. They’ve also introduced all kinds of new functions, like a Green Room thing, they call it Backstage, I believe, where people can chat before meeting, especially if you’re having a big event and so on. They’re introducing avatars and emojis and all the things to make these calls of these meetings a little more fun, a little more interactive.
Withers: We’ll have to figure out the slide control thing because it looks like you’re asking me to move the slide, but it looks like this is a new feature that’s available that you could actually do it.
El-Shimy: Yes. That would save you a lot of work, Brian. [laughs]
Withers: Yeah. My fingers are going to get tired. [laughs]
El-Shimy: [laughs] I know. Every time I say, next slide, next slide. But now, I’m just going to be able to move the slide without you having to do anything. That’s fantastic. If you could, next slide, please?
Withers: Did you want to talk on the chat?
El-Shimy: Yes, the chat. Again, here we’re having a continuous conversation.
We have a new thing called Huddled View. That’s like more informal. It’s not really a meeting. It’s like, “Hey, let’s get together, let’s brainstorm some ideas,” and so on.
They also introduced widgets that are going to enable you to have a Zoom widget on your laptop or on your computer and your phone to where you can see where your next meeting is, any new chats upcoming, and so on and so forth just to make everything super easy.
Finally, I think the last element of that platform or that continued collaboration theme, is security, where they’re going to effectively do the work for you. They verify the identity of the participants either through Okta or through Bring Your Own Key to make sure that people who are on the panel are actually who they say they are. I didn’t know that that was a problem, but eventually it is, [laughs] especially with the whole Zoom-bombing phenomenon that took place during the pandemic. Now they’re effectively authenticating the identities of everybody on those panels. To me I think that that’s a great initiative.
Next slide, please.
Here, it’s about the developer platform. It’s about introducing APIs and SDKs where Zoom itself as in, let’s say Zoom meeting, like the one we’re currently having, you can integrate the Zoom meeting into another app or into another software such as, let’s say again Slack. You have a Zoom button on your Slack channel and you can just click on it and you immediately have a Zoom meeting. This way, they integrate with other software platforms, but they also have it the other way around so that other platforms can be on Zoom.
Moving forward, the Zoom app itself is going to have integrations with lots and lots of other software programs including Microsoft Office, DocuSign, HubSpot, and so on. It’s a two-way integration. This way, they want to make sure that Zoom is effectively omnipresent. Wherever you are, whatever you’re doing, it either has everything you need to do your work if you’re choosing for Zoom to become your primary platform of productivity, or it is available if you are working from another software program to assist you in whatever communication you would like to have at that time. They are really putting a lot of emphasis on building out the app marketplace. If we could go to the next slide, please.
Jon Quast: Yasser, can I say something real fast?
El-Shimy: Sure, please.
Quast: With the whiteboard in the chat specifically, analysts, they asked if Zoom had plans to monetize these new features. They said there is no plans to monetize this right now because priority number 1 is delivering customer satisfaction. They want to improve their current product with these new offerings before they think about how can we monetize this. That really stood out to me as this company is really mission guided.
El-Shimy: Absolutely. This is a classical case of what we mean when we talk about customer-obsessed companies. Zoom, initially, they set out to solve a big problem for a lot of customers. That is, frankly, the new communication platforms did not work. Up until a week ago, I had a Cisco Webex meeting. I still couldn’t figure out how to use it. [laughs] I would like to think that I’m pretty tech savvy, so Cisco still hasn’t figured out how to make their video platform simpler, or a little more easier to use. But in any case, if we can go to the next slide, please.
Here are some examples of how Zoom will integrate with the app that you’re working on. It’s just basically, you embed the Zoom into whatever platform you’re working on. Next slide, please, yeah.
Here we’ve been talking about how they are supporting developers to develop more apps for the Zoom app marketplace and they are really putting a lot of emphasis on developing that marketplace to become a big place where you effectively have all the apps you really need to do your work. We see here in the example next to the guy wearing the headphones, you see Asana, you see other apps that will exist within Zoom so that you can quickly launch them and work with them from Zoom. Zoom is your goal to initial point of launch, if you will. Next slide, please.
Withers: Yeah. I would love to see this Zoom apps store being built out. I would love to see just regular, typical meeting tools that people use like a meeting agenda and a timer, and just a participant list and who’s talking and things like that. That, to me, are missing. It’s like a blank conference room with [laughs] none of the things that make meetings go really well and I’d love to see some of that stuff added in which I think will deliver happiness for its users.
El-Shimy: Absolutely. They do talk about all the new features they’re going to introduce to actually enhance that experience, including giving you the control. Let’s say if you’re setting up a meeting and the participants come in early. Instead of just having that lag page with the host has not started the meeting message, you are either able to allow the participants to huddle together, chat with each other, engage in a green room type setting or you can effectively play some content or leave certain messages for them while they’re waiting for you to come. They are really working on customizing a lot of these things and improve the product moving forward.
Quast: Can I just say with the venture fund real fast, this might be my favorite part of the Zoom right now, as I really dug into this, this is the ultimate optionality lever because Zoom is funding the development of the apps, but they’re hands off the steering wheel. They have no idea where this is going to go. They’re saying we don’t actually know, we can’t think of everything ourselves. We’re putting the ball in your court to see where this goes.
Quast: One option that they put out there is that somebody is working on a video game inside of Zoom right now and they had never thought of that, so it’s like, wow, who knows where this could go? The management team doesn’t even know where this could go. This is incredible optionality for Zoom.
El-Shimy: Absolutely. Jon, one term stood out to me from the transcript when the Chief Product Officers talked about the importance of an app ecosystem and that struck me as very Apple-like. Like they want to build up app marketplace. I think they’re going to monetize it. I don’t know if they’re going to take a 30 percent cut like Apple does but there’s tremendous optionality just within that aspect of the business. We can go to the next slide, please.
Yeah, somebody talked about the video webinars, the Zoom events. I think a lot of people really underestimate how big of an opportunity events are for Zoom. I don’t know about you, but I think we live in a world nowadays where we’re concerned about being in large congregations with other people. There are so many things to worry about. It’s either COVID or security or just don’t want to even put up for the hassle of traveling to a far destination. Having curated very highly personalized, highly interactive, events that can take place through Zoom and these can be concerts, they can be lectures, they can be whatever they can be, I think, again, gives the business tremendous optionality. Next slide, please.
Yeah, that’s just more talking about the events and webinars and all the enhancements they’re bringing to the table. What I would actually like to focus on here is the Expo Plus and I don’t know if you guys read the section, but it just struck me as one of the most fascinating ones because they are effectively building a virtual world where our avatars would be represented on Zoom, and you have that expo experience of almost like an Easter egg hunt where you go from one booth to another, not knowing what you’re going to find, just timing it for the first time. You’re going to be able to chat with avatars that are near you as you’re virtually walking through the space. I thought that was just very creative and very inventive. Again, another use case here, where I think as we move into a world with augmented reality, virtual reality, I think Zoom is going to be a big player in that.
Withers: Well, I think just the use case of what I’ll call college recruiting. You have a large company like Accenture or whoever relies on a large graduating class coming out of the universities and landing in its trainees to start their Accenture career. Just think of how many campus visits these folks are making and if they can set aside specific days and go virtually meet on specific campuses and like you’re saying, I know my son just graduated from Carnegie Mellon in May and he went to a number of these things, but they were audio I think were mainly the pieces, but where you could go and you could talk and you could give someone your resume and the old exposition where there’s a bunch of booths in the career center and you go and visit with a bunch of people. That’s so much easier to do for universities to pull off, as well as the companies coming to visit. If they used to have to coordinate all the companies coming in for this expo and then they had to house them all for physical interviews and all that and you can certainly do all of that through Zoom.
El-Shimy: Absolutely. Also what conference features that really should enhance the ability to host a complete conference virtually. Again, multi-track. You have multiple sessions taking place over the same time and attendance can pick and choose which one they go through seamlessly over multiple days and you have control over so many things.
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