How Does Zoom Make Money?
Zoom has become a household name over the past year due to the COVID-19 pandemic and remote work and learning becoming a new normal. While many people are familiar with Zoom’s video conferencing capabilities, not everyone knows how the company generates revenue. In this article, we will explore the different ways that Zoom makes money, including subscription plans, integration with third-party apps, add-on features, enterprise-level solutions, and hardware products.
Subscription Plans
Zoom offers four different subscription plans – Basic, Pro, Business, and Enterprise. The Basic plan is free, and the most popular Pro plan costs $14.99 per month. Business and Enterprise plans are priced higher and offer additional features and more extensive support.
Zoom’s subscription plans offer premium features that enhance the user experience, including more extended meeting times, increased storage, and advanced administrative controls. Businesses can also take advantage of unique features such as Single Sign-On (SSO) and integration with corporate directories.
The subscription plans generate revenue for Zoom since users pay for the added value and advanced features that come with their plans. The company reports that as of Q4 2020, they had approximately 467,100 customers with more than ten employees, and over 1.35M users that had subscribed to the paid plans, indicating a robust customer base that is contributing to the company’s revenue.
Integration with Third-Party Apps
Zoom integrates with a variety of third-party apps, including platforms for productivity, marketing, and customer relationship management, such as Salesforce, Slack, and Hubspot. Through these integrations, zoom users can access additional features, minimize switching between platforms during meetings and collaborate more efficiently with their colleagues.
The integration generates revenue for Zoom through partnerships with these third-party apps and through commissions or fees charged for additional services. Zoom benefits from revenue-generating partnerships with other prominent organizations in the tech industry and subsequently increases its own revenue.
Add-On Features
Zoom also offers add-on features such as virtual backgrounds, transcripts, and additional storage. These features provide added value to users and enhance their video conferencing experience. Virtual backgrounds, for example, can offer a creative and tangle-free alternative to traditional home backgrounds during work from home video meetings.
The add-on features generate additional revenue streams for Zoom as users are charged extra for them. This model is suitable for users who prefer to pay for additional features, and the extra cash enables Zoom to continue to invest in developing new tools to improve user experiences and explore new opportunities that may further enhance their revenue streams.
Zoom for Businesses
Zoom for Businesses offers enterprise-level solutions that provide a tailored video conferencing experience uniquely suited to large businesses. This includes custom branding, virtual waiting rooms, and SSO, among others. Zoom’s pricing for these services is tiered based on the number of employees, making the company’s products accessible to firms of various sizes and scopes
Zoom’s pricing ranges from $20 per month for ten or fewer employees to $270 per month for more extensive firms with over 1,000 employees. These business services generate significant revenue for zoom since they are an enterprise-grade solution that improves communication within organizations and collaboration with external parties. The service’s pricing and features are well-tailored to the distinctive requirements of businesses, enabling Zoom to cater to this massive customer base effectively.
Zoom’s Hardware Products
Zoom also offers a range of hardware products that expand beyond its software offerings. Zoom’s range of conference room cameras, Zoom Rooms, and smart displays are designed to create a seamless video conferencing experience for users and help Zoom, convert more customers into long-term subscribers.
These hardware products, while not a primary revenue stream, can still impact Zoom’s finances positively. They serve as additional revenue streams that improve the company’s bottom line and deepen its integrated hardware and software offerings.
Conclusion
Zoom generates revenue from various products, including its subscription plans, third-party integrations, add-on features, enterprise-level solutions, and hardware products. These offerings showcase Zoom’s emphasis on providing value to its customers while also expanding on new opportunities to grow their revenue streams. The company’s diversification of income sources makes it possible for zoom to continue offering quality service to its users as it aims to remain a pacesetter in the video conferencing and remote work market.
