Dive Brief:
- Zoom is the video communications provider for more large enterprises, with the number of customers contributing $100,000 or more growing 27% in the trailing 12 months, the company said during a Monday earnings call.
- The company named AI a strategic focus this year, with plans to expand upon existing AI-driven capabilities on its platform. This includes Zoom IQ, Zoom Virtual Agent, as well as translation, captioning and meeting summary tools, Eric Yuan, Zoom founder and CEO, said during the earnings call.
- Despite a post-pandemic struggle to retain subscribers, Zoom posted $1.1 billion in revenue during the fourth quarter of FY2023, for the period ending Jan. 31, a year-over-year increase of 4%.
Dive Insight:
Zoom is joining a broader trend playing out in the technology industry, in which providers are bringing novel AI capabilities to the forefront. Microsoft and Google launched conversational AI tools that have drawn public attention in recent months.
"We will layer more AI technologies into our products to truly help our customers maximize their ROI on our platform and thrive in this new era of computing," said Yuan.
Zoom, alongside other large technology organizations, laid off a percentage of its workforce amid tighter economic conditions and more scrutiny on technology spending. Earlier this month, the company announced it would cut 15% of its workers, or about 1,300 people, in what Yuan said was “a hard – yet important – look inward" to reset company strategy given the economic environment.
Part of the reset for Zoom means continuing to attract large enterprise customers with solutions such as its Zoom One offering. Another major effort is to grow the company's phone and contact center solutions, which puts a sharper emphasis on conversational intelligence, according to Mike Fasciani, senior research director at Gartner.
In January, the company launched its Zoom Virtual Agent, a conversational AI and chatbot solution. Yuan said the solution would transform the way businesses assist their customers and employees.
But conversational AI is not without its challenges, according to Fasciani. Solutions must be able to address customer mood or tone, language dialects, regional slang terms, unanticipated responses or poor quality audio.
"Beyond the challenges faced by all Conversational AI platforms, Zoom is still playing catch-up in the baseline requirements of Contact Center use cases," Fasciani said. "While they’ve made tremendous progress over the past couple of years on their Phone and Contact Center offerings, they still need to close requirement gaps to be accepted into the larger enterprise and public sector opportunities."
