06 Mar Zoom Video Conferencing (ZM)
Teleconferencing to gain from virus cancellations
Conferences all over the world are being cancelled. We have seen cancellations of sporting events, postponement of movie releases, flight cancellations, holidays abandoned and now Google is cancelling its annual developer conference and Facebook (FB) and Twitter (TWTR) said they will not be sending anyone to SXSW, the giant tech conference in Austin.
Whilst it is damaging to the travel industry it is also an opportunity for other industries.
The entire world is in the midst of a giant transition from face to face events to remote teleconferencing. There is already a trend towards working from home and achieving a work-life balance.
When it comes to events, why assemble thousands of people, pay for food, drinks and entertainment, when, in most circumstances, a high definition video camera will do the trick.
Now, with the advent of coronavirus and quarantine, be it self-imposed or forced the demand for such services is skyrocketing. Even my gym today was half empty because corporates are advising their staff not to attend.
The Los Angeles Times reported Tuesday that Twitter managers are now strongly encouraging most of its 4800 employees work from home. Staff in Hong Kong, Japan and South Korea will have no choice.
A report from Global Workplace Analytics and Owl Labs found that 34% of remote workers in the US were willing to take a 5% pay cut to continue working remotely. These employees were also 29% happier with their jobs.
This trend is growing in pace and is only heightened by coronavirus fears. Which is where teleconferencing software is set to win big.
Zoom Video Communications (ZM) makes best-in-class cloud-based software to help companies host business meetings, conference calls, webinars, instant messaging and even phone calls.
The company listed on the Nasdaq last November at an offer price of $36 and closed the first day at $62 and is at $125 now. It is one company that is going against the market and heading higher as coronavirus fear grips the world.
Unlike a lot of technology companies, Zoom actually makes a profit. Most of its clients used to use old legacy products like Cisco (CSCO) and Microsoft (MSFT). But their products were not built for video conferencing and their architecture cannot handle the demands.
The limitations of older code are beginning to show and the new kids on the block, with platforms purpose-built for the new demand are winning over the customers.
The future of large parts of employment is remote and Zoom is the most likely company to dominate the video-conferencing space.
The author does not hold an investment in the company mentioned and has not been renumerated for this report