In March earlier this year, most of the world was placed on lockdown. The fears of a pandemic causing major disruptions to our daily lives was beginning to come true. A virus that was first recorded in China had spread to other countries. As the world went into lockdown, comparisons of the pandemic to “the Spanish flu” of the 1918 pandemic were made. Everywhere you looked, you saw the news of new and rising cases and deaths. We sought for ways to connect and Zoom came to the rescue. Five months into the pandemic and the world is slowly picking itself up and out of lockdown.
With devastating effects to some western and eastern countries and a much lower impact in other areas, we’ve seen a push for a vaccine to be made readily available for the public before we’re fully allowed out of lockdown or to travel internationally. Would this be embraced by everyone? We will have to wait and see.
Despite dark and gloomy days to some industrial sectors as a result of covid, there were some winners and a lot of losers. The economy has taken a big blow and the federal reserve and major banks, making necessary interest rate cuts around the world and providing stimulus checks to those who unfortunately are out of work. However, one sector has stood its ground throughout this period and have made significant gains in revenue and worth.
The big winners
Tech giants based mostly in the US saw significant growth and very promising quarterly earning statements. Amazon has been the main winner, but we also saw Zoom a video conferencing platform that has lived on the sidelines for a very long time. Founded in 2011, they saw a very slow growth but since February this year, we have seen an increase of 250% increase from a price of about $72 to $252 per share as at the time of this writing.
One may wonder why the likes of Skype did not have the same interest and significant growth. There are different factors that came into play. Covid-19 caused a significant change in how we interacted with each other, how we work and have fun together. With much of the world on lockdown with business travel cancelled and holidays going to a complete halt, we as humans had to find a way to connect with each other from a distance.
The race for Video Conferencing
In the age of technology, one player was going to win the race for video conferencing. Everyone who has an internet connection has easy access to zoom. This helped interaction in small and large groups. Skype has had a history of been laggy or unreliable for video calls. Another video chat app, “House Party” gained interest in the early stages of the lockdown. Unfortunately, it had no strong foundation to keep its growth and the hype slowly faded in the following months.
There are many other tech platforms that had their chance at seizing this opportunity for growth but failed to garner enough interest. Companies such as Microsoft with its Skype and Teams platforms. Although interest increased with Teams, it wasn’t enough to become a major player. Slack, Discord amongst others. Zoom stood out from these for some simple reasons.
Factors that influenced Zooms growth
- The shift to working from home for the majority of the workforce
- Remote learning for schools and universities
- Social interaction for family and friends
- Events that would normally have been a physical workshop or networking gathering
- Recruitment and interviews
Studies by independent third parties compiled Riverbed Technology show that about “88% of organisations have implemented remote working models. 31% of the respondents suggest that Covid-19 has triggered the shift.” Taking these factors into consideration including the user-friendly interface, ease of use and reliability, Zoom Video Communications was bound to benefit from these “temporal social norms.”
Would this trend last?
Prominent tech businesses have given their employees the option to work from home either indefinitely or till July next year. Such companies include and is not limited to Google, Spotify, Twitter and others. Many tech and other workers have since adapted to working from home and some are now more comfortable doing so. It may be difficult for some companies to get all their employees back in the office any time soon. Some workers may now prefer to go for roles where remote working is an option. We have seen the trend for the search for remote work go up recently. Only time will decide if it continues to grow.
It is still unclear what is going to happen in the next 6 months or the next year with the pandemic. Large scale vaccine testing has begun in different countries, but will that have an impact on how quickly we come out of international lockdown? We’re yet to find out.
Zoom’s growth has been a lesson to both big and small players in the service they provide. Zoom solved a simple problem during the pandemic. This will always be a major factor in businesses that can withstand and grow through the pandemic.