Zoom Video Communications ( ZM Quick Quote ZM - Free Report) recently announced a strategic partnership with Lumen Technologies ( LUMN Quick Quote LUMN - Free Report) to include Zoom in Lumen's Unified Communications and Collaboration (UC&C) Suite. Notably, earlier this month, CenturyLink had rebranded itself to Lumen Technologies. Per the partnership, Lumen will deliver enhanced services around Zoom’s video-first unified communications platform to its base of customers globally. Moreover, Lumen will combine its embedded network security with Zoom’s built-in security features. This will proactively protect customers using the combined services. Partnership to Aid Enterprise Customer Expansion
The collaboration will allow Zoom to gain access to Lumen’s enterprise customer base. For enterprise customers, minimal involvement of IT, lower cost and scalability are major factors behind selecting Zoom. Notably, the company had 988 customers, contributing to more than $100,000 of trailing 12 months’ (TTM) revenues in second-quarter fiscal 2021.
Markedly, Zoom is one of the leading names in the UC&C space, which is expected to witness a healthy CAGR of 7.1% during 2019-2023 period, per IDC data. The partnership with Lumen should help Zoom to compete with the likes of Cisco, Microsoft ( MSFT Quick Quote MSFT - Free Report) , Google Meet, Vonage and RingCentral who recently launched video offerings. Microsoft Teams has been gaining market share. Notably, 69 organizations with more than 100,000 users leverage Teams, and over 1800 organizations with more than 10,000 users have selected Teams in recent times. The uptick can be attributed to coronavirus-led work-from-home, stay-at-home, telehealth and online learning wave. Solid User Growth: A Key Growth Driver
Zoom continues to add a record number of subscribers and expand enterprise customer base amid the coronavirus-induced remote-working and online-learning wave. Easy to deploy, use, manage and solid scalability make Zoom’s software popular among customers.
Notably, the company’s freemium business model helps it win customers rapidly, whom it can later convert into paying customers. At the end of the fiscal second quarter, Zoom had roughly 370,200 customers (with more than 10 employees), up 458% year over year. Markedly, Zoom’s trailing 12-month net dollar-expansion rate in customers with more than 10 employees was above 130% for the ninth consecutive quarter. Additionally, this Zacks Rank #1 (Strong Buy) company’s efforts to eliminate the security and privacy loopholes, and new hardware and Zoom From Home solution’s launch are expected to help in expanding clientele. You can see the complete list of today’s Zacks #1 Rank stocks here. Moreover, per a report by Global Market Insights, the global video conferencing market is expected to go beyond $50 billion by 2026. Moreover, Zoom’s strong partner base that includes the likes of Atlassian, ServiceNow ( NOW Quick Quote NOW - Free Report) and Dropbox is also expected to benefit the company in winning customers in the near term. Zoom is using ServiceNow’s Customer Service Management to scale its customer-service operations. It will also deploy the Now Platform, including new AIOps capabilities, to enable its new HaaS business model. Zoom will also expand its implementation of ServiceNow’s CSM to provide HaaS customer support. Further, the company’s expanding international footprint is a major driver. Zoom plans to expand its presence in India by opening a new technology center in Bangalore. The Hottest Tech Mega-Trend of All
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