Cabinet and the Epidemic Response Committee's adoption of Zoom for remote meetings during the first lockdown raised security questions at the time, but helped the Nasdaq-listed company. Photo / File
Cabinet and the Epidemic Response Committee's adoption of Zoom for remote meetings during the first lockdown raised security questions at the time, but helped the Nasdaq-listed company. Photo / File
Zoom's second-quarter result exceeded even the most optimistic forecasts - and the video chat software company's Asia-Pacific boss says NZ politicians played a part in its global success.
The San Jose-based company reported revenues of US$663.5m (NZ$979m) for the three months to July 30 — a 355 per cent increasefrom the year-ago quarter, and more revenue than it made for the whole of 2019 (US$623m).
Net profit jumped from the year-ago US$6m to US$186m.
Zoom's Nasdaq-listed shares, already on bull-run since the start of the pandemic, jumped 25 per cent in after-hours trading on the back of the result, giving the company a market cap of US$129b, or close to five-times its pre-Covid value.
The company's video chat service has been used by hundreds of millions since the outbreak hit and remote working went through the roof worldwide.
But with its quarterly update, the company was keen to emphasise the number of customers who were on pro-accounts - especially those who were generating serious revenue - the better to combat rivals' attempts to paint Zoom as the video for play, while the likes of Cisco's WebEx and Microsoft Teams are for work.
"We have always been an enterprise-grade platform," says Zoom Asia-Pacific boss Michael Chetner (who shifted from Cisco to the 9-year-old Zoom three years ago).
Zoom said the number of customers contributing more than US $100,000 each in trailing 12-month revenue increased 112 per cent year-over-year, and that it now has about 370,200 customers with more than 10 employees, up 458 per cent year-over-year.
The company didn't break out any NZ figures, but Chetner offered that the number of Zoom users here has increased by a factor of 54X since the beginning of the outbreaks.
And he says NZ has something of a model use case, helping Zoom to land business elsewhere.
The New Zealand Parliament's use of Zoom saw Australia, the UK Canada and other territories follow suit.
"Your district health boards have always been strong Zoom users. And one of the first calls I had when you went into lockdown was from chief digital officer for the Ministry of Education, Stuart Wakefield," the Zoom executive says. The pair negotiated a free-use deal.
The use of Zoom by NZ's Cabinet and the cross-party Epidemic Response Committee did not generate glowing headlines at the time.
Experts questioned why Prime Minister Jacinda Ardern et al would be using a video-conferencing solution that lacked full encryption.
And in the US, the FBI warned Congress and schools off Zoom amid a wave of "Zoombombing" or uninvited guests crashing calls to share obscenities or porn.
Zoom's uptake maintained its explosive growth regardless - proving, as ever, that convenience and user-friendliness trumps security.
Regardless, Zoom CEO Eric Yuan apologised for the gaps, and on April 8 ordered his company's developers to concentrate on nothing but security and privacy issues for the next 90 days.
Chetner says that drive yielded a framework for end-to-end encryptions, plus new features that everyday users can identify with - such as new default settings for password-protected meetings, and attendees left in a virtual waiting room until the host allows them in.
The host of a meeting can also now prevent any attendee from talking, or sharing their screen, if necessary.
And data sovereignty and security rumbles about a lot of Zoom traffic being routed through China have been addressed by a new feature that lets you choose a data centre. There's an option to pick one in the US. Chetner says Kiwis might want to pick Zoom's server farms in Sydney or Melbourne simply because they're the closest, which should help performance.
So far, investors seem unworried that Zoom use could fade, if or when a widely-effective vaccine is found, or we finally blunder into herd immunity.
Chetner - Zoom calling from his Sydney home - saw no immediate end to the "new normal." His own company sent all staff home in March, and he doesn't anticipate a return to the office for six to 12 months.
Zoom shares wallowed after is April 2019 IPO, only sparking into life when the pandemic hit in the New Year. Source / Nasdaq
And more broadly, he saw the uptick in use for Zoom and other collaborative cloud applications persisting beyond the pandemic.
He sings the now-familiar tune: many companies had dipped their toes into remote working and the cloud.
"The outbreak has jump-started their transformation," Chetner says. The forced mass working from home experiment led to the revelation that the technology was better than they thought, and remote-workers a lot more productive than anticipated.
Click the iccons top left of your Zoom screen & you now get to see encryption and data centre settings. If you don't want your call routed through servers in China, you can choose the US or Australia.
Many companies in NZ have not made a full return to the office, instead opting for hybrid work weeks. Chetner sees similar blended arrangements becoming the norm around the world.
Certainly, his company's board is backing that view.
In a show of confidence, Zoom raised its revenue projection for its fiscal year ending in January to nearly US$2.4 billion, up from the US$1.8b it predicted in early June. The forecast is now more than double the US$910 million revenue that Zoom had anticipated as it began its fiscal year.
