Zoom is looking beyond, video calls, virtual classes, and videoconferences. To stay relevant and expand as Work from Home (WFH) could soon end, Zoom Video Communications Inc. has confirmed it is acquiring Five9 Inc.
Zoom is acquiring Five9, in a deal that values the latter at $14.7 Billion. The company is a prominent player in providing intelligent cloud contact center services.
Zoom seeks expansion in the enterprise segment as general-purpose video calls start losing users:
There’s no doubt that businesses are eager to get employees working from offices. As vaccination drives progress, and the pandemic wanes, the corporate segment will gradually welcome employees.
Zoom soared in popularity and usage during the pandemic. Before Work from Home became a temporary normal, platforms such as Skype, Facebook, and WhatsApp were sufficient for quick video calls.
Exciting news! 🎉 We have signed an agreement to acquire @Five9. Together we will build the customer engagement platform of the future! Details: https://t.co/gBpDMIUQuD
— Zoom (@Zoom) July 19, 2021
However, the pandemic forced companies to look for reliable alternatives to videoconferences. Microsoft strangely sidelined Skype and focused its efforts on Teams.
Needless to mention, the clear leading favorite for lengthy video calls or virtual meetings was Zoom. Although Google offered its own competing service, Zoom captured and retained a large chunk of users.
Zoom to buy cloud software provider Five9 in $15 bln deal https://t.co/9f7R2WWTow pic.twitter.com/2FpupReDX6
— Reuters (@Reuters) July 19, 2021
From teachers, students, and employees, to businesses and customers, several regularly relied on Zoom. But this will gradually change.
As businesses around the globe start welcoming employees, the need for all videoconferencing tools will reduce, if not vanish. Of all the companies, Zoom is the one that is acutely aware of the same. Needless to add, Zoom has most to lose as users abandon video calls for in-person meetings.
Zoom acquires Five9 to venture into the lucrative and sustainable call center market:
The pandemic will not last forever, but businesses will always need to offer reliable customer service platforms. Presumably realizing this before it’s too late, Zoom is acquiring Five9.
Speaking about the acquisition, Eric S. Yuan, Chief Executive Officer and Founder of Zoom said:
“We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers. Enterprises communicate with their customers primarily through the contact center, and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers.”
Zoom to Buy Five9 in All-Stock Deal Valued at $14.7bn.
Analysts expect Five9 to do USD 93 million PAT in FY22. So this will be >150x FY22e EPS. WoW pic.twitter.com/Nsinx0CuBz— Varinder Bansal 🇮🇳 (@varinder_bansal) July 19, 2021
Incidentally, Zoom recently started offering Zoom Phone. It is a modern, cloud phone system that offers a digital alternative to legacy phone offerings. Using the same organizations can connect and interact in new ways, claims the company.
The acquisition could significantly help boost Zoom’s collaboration with enterprise customers and should allow the company to accelerate its long-term growth.
Some analysts claim the Call Center or “Contact Center” market is about $24 billion. By combining Zoom Phone and Five9’s products, Zoom gets a robust platform and ready customers.