Softwares

How Does Zoom Make Money [$21 billion]? What’s The Secret Plot?

When we speak about video conferencing, the very first name that might come to the minds is Skype. The program has been the hub of all the private and official video calls session for many years now. But with a lot of tools created over the past years for video calling particularly, Skype may have faded with time.

How does zoom make money zoom business model?

The program that has acquired a lot of attention in recent times has been the Zoom program. Particularly throughout the lockdown period, it really became a crucial app for any corporate for conducting their everyday official meetings.

However, the Zoom tool has really found itself in controversy. The program was linked with many users’ information stolen and sold on the web.

With a lot of countries banning this tool completely, there’s still an official statement to be launched by the tool. But today, we’re not here to discuss the controversy. We’re here to discuss the app’s business model that has really assisted it in earning a good amount of money.

About The Zoom Program:

Zoom or Zoom Video Communications, Inc. is a communications Technology Company based in California. It offers online chat and video-telephony services through the cloud-based P2P program platform and is utilized for telecommuting, teleconferencing, distance education, and social relations.

How Does Zoom Make Money

The platform use is free for video conferences of up to one hundred participants, with a forty-minute time limit. For larger or longer conferences with more features, there are some paid subscriptions accessible, costing fifteen to twenty dollars per month. Features geared towards business conferences, like the Zoom Rooms, are also accessible for fifty to a hundred dollars per month.

How Was The Tool Really Founded?

Armed with what was required to be accomplished for keeping the clients happy, Eric Yuan, back in the year 2001, took forty engineers for starting his own firm that’d come to be recognized as Zoom. In the beginning, his wife wasn’t on board with his decision, but Yuan had confidence, as did his friends, who gave him three million dollars in seed capital since business enterprise capitalists weren’t buying his idea.

On the 22nd of August, 2012, after determinedly working out of a small office in Santa Clara, the first Zoom version was launched. It had winning funding series, and by 2017, it had a D funding series worth a hundred million and one billion dollars. The business first had to draw users by setting the rates for subscriptions extremely low. The Basic plan of the company had the call durations limited to twenty minutes for the meetings with two attendees as a minimum, but it was free of charge.

The company’s Business plan charges 9.99 dollars monthly for each host and had no time limit in a meeting duration; its Enterprise plan has the same charges and features. The Zoom Education was charges significantly low at 0.99 dollars for each month, allowing it to tap into the education division, where it predicted the growth potential.

How Does The Zoom App Really Make Money?

Zoom provides various products tailored towards the business and private consumers as well. The business works on a Freemium model, which denotes that users can make use of the Zoom’s Chat and Meetings product free of charge. It permits users to host different group meetings with up to a hundred individuals and forty minutes.

video conferencing

If more advanced features or a greater capacity (in terms of time and users) are required, the premium plans have to be purchased. The Freemium model permits the potential clients to become acquainted with the products, which boosts the awareness for the Zoom app through word-of-mouth. Let’s now glance into every revenue layer in more detail here.

Zoom Workspaces And Rooms:

Zoom Rooms are the conference rooms system that permits the different organizations to run video conferences. Users can make use of the existing hardware providers like Cisco and Polycom or buy from the Zoom-certified hardware contributors. The Professional Services unit of the company then makes sure that the installation of the meeting rooms runs as effortlessly as possible.

Users are charged a subscription fee every month, which comes in at forty-nine dollars every month for each installed conference room (or 41.58 dollars for each month when billed annually).

Also, the Zoom app partners up with the creators such as Aver or DTEN for providing their users with the essential hardware tools. In all the likeliness, such providers disburse a percentage of each hardware sale to the Zoom app. In return, the Zoom app will make certain to promote the products to the customers of the company.

Zoom Chats And Meetings:

Zoom Chats and Meetings is the flagship product of the company, permitting individuals to jump on the chat or (video) call over the tool. Users can simply access the tool using numerous sources, comprising Zoom’s mobile or desktop apps. The free version of it limits the usage time to forty minutes while limiting the user count to a hundred attendees.

For lifting such restrictions, users will have to disburse a subscription fee every month. Businesses will need to disburse 14.99 dollars when billed monthly or 12.49 dollars for the annual billing.

Zoom Phone:

It’s is the cloud-calling solution created for the users who desire to have fast calls without video. You can open a VoIP call instead while making use of the same Zoom programs accessible in the Meetings product. Other features comprise:

  • IVR and auto-attendant tools for redirecting the calls to the most capable agents
  • Secure HD audio for the clear discussions
  • Voicemail and call recording
  • Artificial intelligence-assisted routing and call management and a lot of others.

Similar to the other products, the app charges a subscription fee every month of 14.99 dollars for each host (or 12.49 dollars for each month when annually billed).

Zoom Video Webinars:

It is a web conferencing service that permits customers to broadcast the Zoom meeting to up to ten thousand view-only attendees. These webinars begin at the capacity of a hundred participants and scale up to ten thousand participants, relying on the license bought. As the webinar organizer, one can share the video, screen, and audio.

Zoom Video Webinars

Additionally, attendees can make use of the question or chat and answer options for interacting with the host of the webinar. Registration for the webinars might either be mandatory or optional, relying on the privacy settings selected.

The webinars can either be held one time, reoccur successively, or the same webinar session can be held several times. The pricing for webinars begins at 14.99 dollars each month. On top of that, a webinar license has to be bought.

The cost relies on the attendees’ number hosted. Finally, Zoom provides special packages to different organizations in the Finance, Education, Government industries, and Healthcare. For example, schools will need to disburse 1,800 dollars annually for unlocking twenty hosts and access the premium features of the company.

The Revenue Model Of The Company:

For being very precise, the focus of the company was never on making skyrocketing revenues. The present situation of Zoom might look like an overnight success, but it’s actually not. The focus was always on creating a product that can sell itself and make the users content. In simple words, we can utter that the main aspect of the growth plan of the Zoom app has always been to allow the product to do the majority of the talking.

The Revenue Model Of The Company

In spite of the prevalent thinking that the app is an overnight hit, it’s time after time been in the limelight at the right places.

The August 2018 Gartner quadrant for the meeting programs put the Zoom app among the creative leaders, and it was placed alongside Cisco and Microsoft and well in front of Adobe and Google. Even in the stock market, the app has been the best performer. The company’s revenue grew from sixty million dollars in 2017 to around 330 million dollars in 2019.

However, 2020 was a diverse growth level for the Zoom app. The only revenue of the first quarter of the Zoom app in 2020 was 121 million dollars. And what’s shocking is that the only source of income is still the subscriptions. The app provides four subscription plans for the users called Zoom Pro, Zoom Basic, Zoom Enterprise, and Zoom Business. Here’s how such plans differ relying on the offerings:

Zoom Basic:

The Zoom tool’s Basic plan is free for making use of, and it allows the users to have up to a hundred members in a single conference, online customer care services, unlimited one-to-one meetings, and a few additional features for the group meetings.

The major restriction in the free plan is that the time limit of the group video meetings is constrained to just forty minutes.

Zoom Pro:

The Zoom app’s Pro Plan comes at fourteen dollars for each month and persists all the features given by the free plan along with the additional benefits, such as group video call time limit increased to 24 hours as opposed to just forty minutes, the capacity for adding more than a hundred members, integration with the Skype app for business and many other amazing features.

Zoom Business:

It comes at 19.99 dollars for each month and requires at least 10 group members in the team to work. As its name suggests, the Zoom Business Plan is more suitable for medium or small-sized businesses.

Zoom Enterprise:

This plan comes at 19.99 dollars for each month and requires at least fifty members in the team. Again, as its name suggests, it’s an excellent fit for large organizations and businesses.

That is all about how the Zoom app works and makes a lot of cash. The program is most probably the re-definer with regards to video conferencing, and creating a program like Zoom would not be easy without a doubt.

For putting it all together, you’ll have to contempt numerous aspects such as competitor analysis, market research, program development, back-end development, new features to append, and marketing to create a program like Zoom.

So, if you’re really serious about replicating the Zoom app’s success, you have to learn numerous things from the Zoom strategies and business model they adopted to really stand tall in the industry.

Lessons For Learning From The Incredible Success Of The Zoom App:

You can learn the following lessons from the app’s unbelievable success:

Incredible Success Of The Zoom App

Always Be User-Centric:

From 2013-2020, the thing that was steady in Zoom’s journey was the priority for the users. The team at the zoom company never thought about the fast publicity or an overnight success. Zoom’s founder and CEO said in an interview that keeping the existing user’s content was always the main priority of the team, even if that forced them to slow down at times. So, before you plan on replicating Zoom’s success, fit the user-centric plan at the back of your mind.

Concentrate On Making The Product Better:

At the Zoom Company, gathering and analyzing the users’ feedback is the way utilizing which they’ve been capable of creating a top-notch product. Here’s a small note by the founder of Zoom that shows why they’re really successful today:

We always worked so hard on making the free product work really well. We offer most of the features for free, and that assisted us in building a loyal user base. That’s the main reason each day there’re such a great number of users coming to the site, free users. If they find the app helpful, very soon, they’re gonad disburse for the membership.

Never Believe That There’s No Space:

When Zoom was founded, there’re numerous doubts. Wasn’t the industry already targeted? How can one struggle against the rivals such as Microsoft and Google? However, the man behind the Zoom app was sure about his idea. He comprehended that there’s a lot that can be accomplished to make everything better in this market.

And it ought to be a thumb rule for each startup, either resolve a huge issue or resolve the already resolved issue in a better way. The founder of the app picked the latter and became what he’s today, the CEO of the billion-dollar business.

Conclusion:

So that was all about how the Zoom app really works and earns money. It’s an excellent example of how the video-conferencing tools ought to be. With the astonishing business model, the program is winning industry shares and providing neck-to-neck competition to huge players in the market such as Skype. Well, if you too desire to make a tool like Zoom, you have to pull the socks now.

No doubt there’re still many ways to stand out for the new players. But, the journey all of them would have to follow will not be a simple one.

The returns and benefits on the investment of creating video conferencing programs like zoom are clear enough with such tools getting great success. Also, the trend isn’t going anytime soon anywhere with the world taking on the work from the home policies.

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