Zoom Enhances Platform With Document Editing to Rival Microsoft
As it faces tough competition from Microsoft Corp.’s Teams, Zoom Video Communications Inc. is expanding its range of tools to include word processing and exploring innovative features for meetings.
Alphabet Inc’s Google Docs-like collaborative document editing will be available on Zoom next year, the company announced Tuesday ahead of its annual conference. What sets the tool apart is its ability to include information and AI-generated summaries of Zoom meetings, Chief Product Officer Smita Hashim said in an interview.
The company’s fiscal year revenue increased more than fivefold to $4.1 billion from 2020 to 2022 as Zoom became an essential tool during the pandemic. But this explosive growth ended when offices reopened and competition intensified. Analysts now expect sales to grow by less than 2% in the coming quarters. Zoom’s strategy to revive growth relies on offering a wider range of business tools beyond video conferencing, including features from Workvivo, the employee messaging service it agreed to acquire in April.
Zoom has had early success with its office phone service, which now generates about $500 million a year, and its customer service center offering, which passed 500 customers. Morgan Stanley analyst Meta Marshall called these “encouraging statistics.” The company is not yet disclosing usage numbers for other tools launched last year, such as email and calendar.
Still, Microsoft’s Teams is a formidable competitor. Zoom has met with U.S. and European Union regulators over the past year to express concerns about the way Microsoft, the world’s largest software maker, favors its products through design and price bundling. Zoom CEO Eric Yuan said in September that US regulators should also look into the issue.
Zoom executives — and many financial analysts — say most people simply prefer its video conferencing app to Teams. But Zoom only commanded about 7 percent of the communications and collaboration software market in the first quarter of the year, compared to Microsoft’s 42 percent, according to industry analyst IDC.
“The quality of the Zoom is simply incredible – it’s just head and shoulders above everyone else,” Hashim said. He added that while many customers have licenses for multiple video conferencing solutions, they use Zoom a lot.
To maintain that edge, the company is experimenting with some new features, according to recent patent filings. One patent granted this year shows that Zoom aims to add interactive virtual objects to meetings, for example for product advertising or training. Another recently published patent includes a feature that scans the “non-verbal cues” of meeting participants and provides prompts, such as suggestions to call someone who looks like they want to talk. “There’s a lot of technical innovation going on there,” Hashim said of Zoom’s research teams, but declined to comment on specific applications.
In September, Zoom introduced AI features such as call summarization and message drafting. The new tools are included in paid plans at no additional cost. Hashim said this is not promotional pricing and the company is committed to keeping AI features free for users.
“We’re starting to see customer interest and customer adoption continue to grow,” Hashim said of Zoom’s new non-meeting tools. “Right now, the focus is on bringing more and more value to customers through journeys between these kinds of products.”
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