Understanding The Zoom Business Model: Revenue Streams & How Zoom Works
In a world where technology has taken over almost every aspect of our lives, video calling and conferencing service was mostly driven by Skype, but look up people, there is a new kid in the town, Zoom, a video conferencing app that has managed to make the heads turn of startups and small-large scale businesses with its amazing built-in features to smoothly create and run work meetings from across the globe. With the superiority of audio and video call quality that it provides, it is a bit of a drag that it took a pandemic to realize the true potential of such a powerful video conferencing app.
Zoom, although it has been around for 2013, it has garnered worldwide fame and recognition after COVID-19 hit the world. Since then Zoom has never looked back on gaining a constant user base. This certainly begs the question — How did Zoom do it? The success of Zoom has many layers that need to be thanked.
Without much further ado, in this blog, we’ll put your curiosity to rest and this ultimate guide will help you understand the Zoom business model, how zoom works, and the revenue model of Zoom to get a clear understanding, and if you’re looking to create an app like Zoom, then it’d be an added advantage for your business. But before that, let’s go back to where it all started.
Zoom — Quick Look At The History
Before diving into the details of how Zoom brings in cash, we need to talk about its set of experiences. Zoom is the brainchild of its CEO Eric Yuan, a previous chief at Cisco. He established the conferencing company back in 2011.
Before beginning Zoom, nonetheless, Yuan went through right around 10 years and a half driving designing teams from WebEx and Cisco (after its WebEx procurement in 2007.) After prevailing with regards to getting his ninth visa application, Yuan bounced on board as one of WebEx’s first computer developers.
While at Cisco, Yuan noticed that he regularly saw their clients get disappointed as the company couldn’t precisely tune in to their requests. For instance, the company’s frameworks consistently need to group whether it needs to dispatch the Android, iPhone, Mac, or PC variant of a product at whatever point a client signs onto a WebEx meeting. This eased back things down. Considerably more so if such a large number of individuals attempt to join at the same time, as it strains the association. This prompts more awful sound and video quality. Moreover, highlights like screen-sharing were generally missing in mobile phone variants.
Yuan Bids Farewell To Cisco To Start Zoom
Thus, Yuan chose to leave the company alongside 40 Cisco developers in 2011 to begin their endeavor.
At first, Zoom began as Saasbee before rebranding not long after. It was likewise an unpleasant beginning, as Zoom couldn’t pull in numerous financial backers. This was because no one accepted that current goliaths like Skype, Hangouts, and Yuan’s previous company WebEx, could be supplanted.
Fortunately, $3 million would be raised for Zoom’s seed round not long after, all thanks to Yuan’s particular experience and his company, which included Subrah Iyar, WebEx’s previous CEO. Come 2013, Zoom would at last dispatch its first contribution and declare a $6 million Series A round.
Promptly, this product would stand apart from its rivals, acquiring it the title of a video conferencing industry pioneer. Dissimilar to previously, facilitating video meetings with 40 individuals should now be possible without any problem. In addition, it very well may be handily incorporated into all equipment stages.
Furthermore, Zoom’s costs were likewise altogether lower than its opposition, which pulled in a lot of clients directly from the beginning. Indeed, it prompted a client base of more than 1,000 companies not long after its dispatch. Before long, Zoom would cross 1 million members by May 2013, an achievement for the youthful company.
How Does Zoom Work?
Zoom is a cloud-based SaaS (programming as assistance) application that permits private people and companies to interface essentially with one another. The product as a help model is based on the merchant facilitating and keeping up the workers, code, framework, and data sets.
Clients are simply needed to pay a month-to-month or yearly membership charge for the administrations delivered. This type of model is a critical advance up from the on-premise conveyance frameworks of the ’90s and the mid-2000s. Reviews anticipate that more than 80% of uses will be SaaS-situated soon.
It’s genuinely easy to host, plan, or go to a gathering meeting or a one-on-one gathering with Zoom. Zoom can be utilized as a versatile application or work area application for Windows and macOS. Zoom is additionally accessible as an expansion for Firefox and Chrome.
The serious edge over different companies comes as frictionless great video and sound yield. Enormous scope associations utilize the consistent stage for leading conferences on a worldwide level, with many members participating.
Zoom Business Model
Zoom business model has implemented a recurring subscription charge. In other words, a freemium model. Freemium is the combination of “Free” and “Premium”. So, going by the definition of those words, it works exactly like what they mean. It’s a model which allows users to get the basic features of a product for free and if they want to upgrade, they’ll be charged for the feature they want to use. And Zoom, not just having a freemium model to its name, also generates its fair share of revenue by advertising specific hardware products.
Now, this on-demand video calling app is using such a business model because while implementing this, you can pretty easily estimate the revenue. If you go by the general notion, users rarely go out of their way to discontinue their subscriptions. When you’re charging for your service be it monthly or yearly, it’s always to encapsulate. The first thing would be to give your users a factor to put trust in you. And with that being said, there would be no extra charges, say goodbye to those irritating hidden costs, ultimately making it a lot easier and better to keep the free users and make them opt for paying customers. If you take all of these into consideration, it’s only fair that businesses today are looking to create an app like Zoom.
And if you look at things a little differently, the biggest and foremost challenge would be to decrease the churning ratio and keep the customer retention as high as possible. Bigger companies and enterprises are looking for proper ways to deliver value to their users.
Zoom Business Model Canvas
Zoom, a video conferencing app has a business model that allows the platform to comprehend certain elements such as key factors, value propositions, revenue streams, etc to further blossom. The Zoom business model canvas encapsulates the concept of the Zoom mechanics.
Zoom Revenue Model
Now that we are done with the Zoom business model, let’s answer this question: How does Zoom make money? Zoom offers a wide scope of products, which are all pointed towards the two companies and people. But before that, let’s have a look at the astounding figure which shows how Zoom has increased its revenue right after COVID-19.
Concerning its business model, Zoom works on a “freemium model,” which implies that while clients can utilize Chat and Meetings for nothing, you’ll need to pay for cutting-edge features and more prominent facilitating limits. For instance, clients can have gatherings with 100 individuals for as long as 40 minutes. If you need longer time and more clients, there are Zoom’s superior plans.
Moreover, this freemium model acclimates clients with Zoom, all while expanding mindfulness about the products.
We should investigate every income layer in more detail here:
-> Zoom Meetings and Chats
As Zoom’s leader product, it allows individuals to join video calls or visit through the application. It’s additionally accessible on all stages, similar to the desktop and mobile.
Utilizing this variant with the expectation of complimentary cutoff points meeting times to just 40 minutes and 100 participants, and lifting these limitations require paying a monthly membership. For companies, this implies either a regularly scheduled payment of $14.00 or $149.90 every year.
-> Zoom Rooms and Workspaces
This product is focused on associations that hold video gatherings now and again and is ensured to run as easily as could be expected. Furthermore, clients can likewise utilize products from equipment suppliers like Cisco and Polycom, just as they buy from suppliers ensured by Zoom.
For this product, Zoom charges a monthly membership expense of $49 per introduced meeting room. When charged every year, the cost goes down to just $41.58.
Moreover, Zoom additionally guarantees their clients get the required equipment devices by cooperating up with producers like Aver or DTEN, among others. These suppliers at that point pay a rate with each equipment deal, while Zoom keeps on elevating its products to its clients.
-> Zoom Phone
If you favor speedy calls without video, the Zoom phone is for you. Utilizing cloud-calling tech, clients would then be able to settle on a VoIP decision, with a similar Zoom instrument found in its Meetings product accessible to them.
Different features include:
- Artificial intelligence helped call the executives and steering
- Call recording and phone message.
- Secure HD sound for clear discussions
- Auto-orderly and IVR devices to divert calls to qualified specialists and numerous others.
Clients are charged a monthly expense of $14.99 for each host, which additionally goes down to $12.49 when charged each year.
Zoom Video Webinars
Consistent with its name, these Webinars permit Zoom clients to communicate with Zoom getting together with 15,000 view-just participants/users. Contingent upon the permit bought by the client, these Webinars start at a 90+ man limit and step by step increasing.
Online class coordinators can share their screen, video, and sound, while online course participants can collaborate by either utilizing the talk or taking part being referred to and answering alternatives from the host. Furthermore, online class hosts can likewise set the protection settings to make enlistments discretionary or obligatory. Besides, these online courses can likewise either be held once or on different occasions, even reoccur progressively.
Concerning evaluating, the Webinar product begins at just $14.99 each month and clients monthly. Furthermore, an online class permit should likewise be purchased, the cost of which relies upon the number of its participants.
Ultimately, extraordinary bundles to associations in the Education, Finance, Healthcare, and Government businesses are likewise given by Zoom.
For instance, if a business firm is ready to pay $1500 every year, they can open more than 15 hosts, just to gain admittance to Zoom’s exceptional features.
Looking To Create An App Like Zoom?
The above complete guide on Zoom, a video calling app that provides the best conferencing features must have given you enough information on how zoom actually makes money, how Zoom’s business model operates and how it gained such popularity in such a short amount of time. Furthermore, businesses are taking this into consideration and starting their own business like Zoom to reap the benefits. Easier said than done, right? Well, we at Moon Technolabs are providing stellar video conferencing app solutions to make sure your business reaches its potential without having to spend too much.
