Home Business Insights & Advice Zoom being charged ‘millions’ for servicing free users

Zoom being charged ‘millions’ for servicing free users

by Sponsored Content
24th Sep 20 9:32 am

Video conferencing giant, Zoom, has announced strong growth during its quarterly results, following its astronomic rise during the Covid-19 pandemic.

The company announced this month that revenue rose 355 per cent to $663.5 (£495m), topping analysts’ average estimate of $500.5m (£373.5m). The company’s gross profit rose to 71 per cent from 68 per cent, but still remains far below the 80 percent range that Zoom operated at before free users flocked to the service.

The video sharing platform admits that it is spending millions on the free users that have adopted the product, something that has seen the number of users jump from 10 million to 200 million worldwide in the last year, expanding to over 40 countries.

Whilst Zoom works on a paid model for accounts that want to use the service with multiple admins or for longer sessions, there is a free version which allows anyone to download it and talk for up to 45 minutes. However, any free users are still hosted by the platform which relies on support from Oracle and Amazon, which Zoom pays the bill for.

Founded by former Cisco executive Eric Yuan, Zoom became arguably the most popular and successful brand following the Covid-19 pandemic, with working professionals using the service as an alternative to face-to-face meetings – and continuing to use the service when lockdown measures eased in the UK and US.

Friends and families jumped on the bandwagon too, to celebrate birthdays, catch-up calls and other festive occasions. The term ‘zoom’ has joined the everyday rhetoric and has become a household name.

The process involves creating a Zoom account, which can be connected via your Apple or Google login, you download the app onto your phone or desktop, create or receive an invitation from a guest and the video conferencing begins.

Many have struggled logging onto Zoom, especially the older generations who battle to download apps to their phone or desktop and find challenges with accepting online invitations.

This has led other Zoom alternatives to thrive in 2020, with greater adoption of competitors such as Google Meets, Join.me, GoToMeeting and Whereby.

Whereby.com has thrived on the basis of being able to create your own personalised URL, which can then be sent to individual guests and the conversation starts automatically on your browser.

Skype, which has been popular for over 15 years, allows people to make free calls and video sharing provided you have a free account. Customers only pay to call landlines and mobile numbers or upgrade to extra features.

As of 1 st Sep, Zoom Inc has a market valuation of $125 billion.

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