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Home Tech

How does Zoom make Money and Why is it Successful?

Kajal by Kajal
June 10, 2021
in Tech
Reading Time: 8 mins read
0
zoom

Entrepreneurs and companies looking forward to venturing into the video conferencing business have only one question – How Does Zoom Make Money?

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During this COVID-19 pandemic, start-ups, MNCs, educational institutions, healthcare providers, and anyone who desired to interact via video conferencing opted for Zoom Meetings predominantly. The company reached new heights as social distancing and remote functioning was implemented worldwide.

Zoom made it to the topmost list in all three categories: App Store Downloads, Google Play Downloads, and Overall Downloads.

What is Zoom?

 

Zoom is a cloud-based video communications app that enables you to set up virtual video and audio conferencing, webinars, live chats, screen-sharing, and other collaborative skills.

Zoom was established on April 21, 2019, by Eric Yuan. Its headquarters are in San Jose, California, United States.

You don’t require an account to attend a Zoom meeting, and the platform is compatible with systems like Mac, Windows, Linux, iOS, and Android, meaning approximately anyone can access it.

In short, a big piece of Zoom’s appeal is simplicity. It’s easy to start, the app is lightweight, and the interface is moderately intuitive to use. It comes with attractive features like Gallery View which is a mode that permits you to see every person on the call at once, built right into the app.

Features of Zoom

zoom-fetured

One-On-One video conferencing

This is the most basic use of the service. Zoom utilises audio and video to connect two people with each other virtually.

Group Meetings 

This trait is used by office administration to connect with their employees in real-time. The free version of the service can join up to 100 participants at once for 40 minutes, however, the number of participants can be raised to 500 and the 40 minutes can also be eliminated in a paid version.

Screen Sharing

This feature is often used for presenting presentations in a virtual group meeting.

Zoom Meeting

It means that a meeting on a video call can be connected that is hosted using zoom.

Zoom Room

This feature permits a physical setup in the conference rooms of corporations to do meetings via video call.

 

So, “How Does Zoom Make Money?“

The Inspiring Narration of Zoom

Before we understand How Does Zoom Make Money, let’s have a quick glance at Zoom’s success timeline – its early history, growth, and success.

The history of Zoom is quite remarkable. Eric Yuan came to the US in 1997 from China after his visa getting declined for the 8th time. He joined WebEx, a web and video conferencing application, as one of the leading twenty software engineers. In 2007, Cisco acquired WebEx, and ultimately, Eric became VP of Engineering.

Eric saw that customers were unhappy with their product. Whenever users logged into the WebEx conference, the system had to recognise the user’s product version, i.e., PC, Andriod, Mac, or iPhone. Thus, it lagged down the process. Also, if many people logged into the corresponding conference, the connection got too weak to operate. Consequently, it gave weak audio and video quality.

Moreover, it didn’t own a screen sharing feature for mobile users. To fix the obstacle, Eric proposed his new video conferencing idea to the firm but got rejected. So, he chose to make his own company to generate a new version of smartphone-friendly video technology. He resigned from Cisco, followed by 40 Cisco engineers.

Primarily, Eric initiated the company as Saasbee. However, he strived to convince Venture Capital firms to invest initially. As there were powerful competitors in the market like Skype, Google and Cisco, the firm rejected investing in Saasbee. Luckily, prior WebEx CEO Subrah Iyar trusted Eric and his in-depth expertise in technology and gave $3 million in seed funding. A year later, Eric renamed his firm Zoom Video Communications, Inc.

Growth of Zoom

growth

 

Initially, Zoom launched a beta version, which permitted only 15 people to attend the video conference. But Zoom encountered difficulties due to its substandard technology, complicated interfaces and ageing, complex proprietary architectures and expensive deployment.

However, Zoom devised its video calling features. In 2013, Zoom launched its initial product and raised a $6 million Series A round. It allowed 25 people to enter the conference at the same time. Zoom is distinct from other video calling apps for its vast interoperability with several devices, third-party applications and operating systems. You can easily set up Zoom on your desktop and mobile or tablet and it now enables 100 participants for free. By March 2020, Zoom possessed 200 million daily users.

How to Host a Zoom Meeting?

How-to-Host-a-Zoom-Meeting

You may imitate the steps to host a meeting in Zoom.

  • Download and install the Zoom app from the Google Play Store or Apple Store on your mobile.
  • Initiate the app on your device and click on Sign Up Free if you haven’t done yet.
  • If you don’t have the app, then go to the website and select Host a meeting to commence the installation.
  • If you have the app installed, then Sign in using your email id and password or your Google or Facebook account.
  • Press the descending arrow.
  • Select Start with video > New meeting.
  • Likewise, you can join a meeting by clicking Join a meeting.

How Does Zoom Make Money?

How-Does-Zoom-Make-Money

Zoom renders video telephony services. It offers a platform to communicate with people via both audio and video in real-time. To learn how does Zoom make money, we need to understand its business model.

It principally targets businesses and enterprises of all sizes, healthcare providers, educational institutions, and anyone seeking video conferencing solutions. Therefore, these constitute the customer segments of Zoom.

Coming onto its value proposition, it provides high accessibility as it is available across all platforms like Windows, Linux, Mac OS, iOS, and Android. It also offers high-performance, ease-of-use, and most importantly, it connects people globally and remotely.

To sum it up, one can use Zoom for many purposes like business meetings, training programs, online conferences, job interviews, webinars, etc., on any platform without any hassle.

Additionally, Zoom runs on a freemium business model. Now, you may question, “What is freemium?”

Freemium is a business model. The business provides limited services to its users without imposing any fee. The intention behind giving these is to secure the customers and make them subscribe to the upgraded services.

Most of us believe that Zoom is a basic video conferencing service. Yet, it is much more than that.

Let’s review each service separately so that we can understand How Does Zoom Make Money.

Zoom Services

1. Zoom Meetings 

Zoom-Meetings 

Zoom Meetings is the firm’s core contribution, and it is also the most used service. It allows its users to interact via video conferencing. It also offers a feature called Zoom Chat, where-in users can leave text messages, URLs, and other content.

Below this, there are four subscription models, particularly:

  • Basic

This choice is best for personal meetings. The best part is that it enables users to host a meeting with up to 100 participants free of cost. However, there is a time limit of 40 minutes for the sessions. In contradiction to this, the time for 1:1 meetings is unlimited.

How Does Zoom Make Money with this model? – This is the free alternative to the Zoom meetings, and the company don’t charge for offering this service.

  • Pro

As this model gives unlimited group meetings, small units can opt for this option and host conferences with up to 100 people without worrying about the time limit. Additionally, it gives features such as social media streaming and 1 GB cloud recording.

How Does Zoom Make Money with this model? – This alternative is chargeable and is priced at $149.90/year/license.

  • Business

This option is the best fit for small and medium enterprises. This model allows hosting a group meeting with up to 300 participants in contradiction to the above two. Additionally, it gives features such as single sign-on, cloud recording transcripts, company branding, and operated domains.

How Does Zoom Make Money with this model? – This variant is further expensive than the Pro model and is valued at $199.90/year/license.

  • Enterprise

This alternative allows users to host a meeting with 500 participants. Additionally, it grants unlimited cloud storage, a dedicated customer success manager, and transcription.

How Does Zoom Make Money with this model? – This alternative is by far the most expensive one and is rated at $300.00/year/license.

Please note that the costs may vary depending upon your location and currency. 

2. Zoom Phone

Zoom-Phone

Zoom Phone presents the application as a complete collaboration product for corporations and businesses. It offers traditional phone abilities within the application, making Zoom a one-stop answer for calling, messaging, and video conferencing.

Below this, there are four subscription models, namely:

  • US & Canada Metered

It provides a US and Canada number, and you can make and receive calls (metered) from various devices.

How Does Zoom Make Money with this model? – This variant is valued at $120.00/year/license.

  • US and Canada Unlimited

Aside from the previous model’s features, it offers unlimited calling within the US and Canada and gives advanced phone features.

How Does Zoom Make Money with this model? – This variant is valued at $180.00/year/license.

  • Pro Global Select

This alternative offers unlimited domestic calling in more than 40 countries and regions and a direct dial number trait. Moreover, the previous model’s elements are also covered in this variant.

How Does Zoom Make Money with this model? – This alternative is priced at $240.00/year/license.

Please note that the prices may differ depending upon your location and currency.

3. Zoom Video Webinar

Video-Webinar

Zoom Video Webinar enables users to host webinars with anywhere between 100 to 10,000 participants, depending on your pricing policy. It has interactive characteristics such as polling, Q&A session, likes and upvotes, and so on. Additionally, it also offers a list of traits that businesses can make use of.

How Does Zoom Make Money with this model? – The pricing begins from $400.00/year/license and goes up to $64,900.00/year/license. Apart from this, if you want to have a webinar with 10,000+ participants, you will be required to get in touch with Zoom’s sales team.

4. Zoom Rooms

Zoom Rooms

Zoom Rooms is another video conferencing innovation offered by the company; however, this helps the members conduct the meeting more seamlessly and efficiently. It gives features such as one-click joining, 1080p HD video and audio, 1000 video participants or 10,000 webinar spectators, calendar integrations, and so on.

How Does Zoom Make Money with this model? – It allows a 30-day free trial for Zoom Rooms; however, it asks for your credit card details. Besides, the pricing begins from $499.00/year/license.

Interested in making short videos? Well, then check out the Top 10 Short Video Apps in India.

Summary

During COVID-19 in 2020, Zoom has earned more popularity in the video conference platform. This video-first cloud system went on viral due to the tremendous demand for work from home. The founder Eric Yuan set its bar of victory through product development, strategic and engineering direction.

One can enjoy the high quality of audio and video streaming working with Zoom. Its premium packages, as well as additional services, make Zoom a real money-making app.

Zoom now has 300 million everyday participants and 148.8 million users. Starting with 40 engineers only now, Zoom has 2854 employees with a record income increase of 88% in 2020. This sustainable business model offers customer satisfaction with easy communication and collaboration.

Tags: appmeetingvideo conferencingzoom
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Kajal

Kajal

Belonging from a Psychology background, Kajal is a keen observer and a splendid writer with considerable experience in writing content. She loves watching movies and has a keen interest in reading.

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