Zoom, which boomed during the pandemic and became nearly synonymous with video chat, could yet find itself squeezed out despite a recent push to expand into new areas.
The big picture: Businesses tend to like to get their services from as few vendors as possible, a trend that encourages bundling and makes it hard for ambitious, innovative start-ups to succeed.
Driving the news: Zoom will report its latest quarterly earnings on Monday, where it is expected to post per-share quarterly earnings of 84 cents, per Zacks, down 24% from a year ago. Revenue, meanwhile, is seen growing 4%, to $1.1 billion.
- Zoom's stock has lost more than half its value in 2022, a steeper drop than the average for tech companies.
- Earlier this month, Zoom announced it is expanding to offer email and calendar services as well as new types of casual collaboration features to augment its core video meeting feature.
What they're saying: "Zoom recognizes that good video meetings are not enough, which is progress compared to what (CEO) Eric Yuan was saying 3 years ago," Creative Strategies analyst Carolina Milanesi told Axios.
Yes, but: Most companies already have an email and calendar system.
Of note: Early next year Zoom also plans to launch Spots, a "virtual coworking space" that aims to "bring the fluid interactions of in-person work to distributed, hybrid teams."
- "Spots is an interesting concept nobody else has thought of to try and recreate that water cooler moment, but it has to be thought through carefully from a privacy perspective," Milanesi said. "For now it seems that Zoom is willing to let customers experiment and see what works."
Between the lines: Analysts say Zoom is doing the right things, but still could be in trouble, as Microsoft, Google and Cisco all offer their own video conferencing options that can be bundled with other software.
- Consider what happened to Slack: It had its market arguably far more to itself than Zoom does, yet it still struggled to compete as Microsoft bundled Teams into Office.
- Companies like Microsoft or Google can afford to add in more services without charging separately, a luxury the one-trick ponies can't afford.
- That's a big reason that Slack eventually sold itself to Salesforce.
