Almost a year after the World Health Organization discovered the coronavirus, many people are still staying at home in offices, schools, cinemas, stadiums, churches and restaurants. Much of the socialization that would take place in these locations in 2020 will be via video calling. And you can’t talk about that aspect of life without talking about Zoom.
Zoom seemed to come out of nowhere. It wasn’t endorsed by Cisco, Facebook, Google, or Microsoft, although those companies were all trying to catch up with Zoom. A small business that was geared towards large enterprise rollout was suddenly inundated with people trying the service for free as well as thousands of new paying customers. Sales quadrupled and profits increased 90 times, which surprised analysts. The stock rose and rose to emerge as one of the top stocks of the year, gaining more than 450% – alongside vaccine maker Moderna and Chinese Tesla challenger Nio.
This was helpful to Zoom’s founder and CEO Eric Yuan, who had previously worked on the Webex video calling software purchased by Cisco in 2007. Yuan was a billionaire even before Covid-19, having floated Zoom in April 2019 and impressing investors with the combination of rapid growth and profitability. Now he’s one of the 100 richest people in the world. According to FactSet, its Zoom shares are worth nearly $ 17 billion.
“I’m really excited for him. Really,” said Rob Bernshteyn, CEO of Coupa, whose cloud software helps companies keep track of purchases. Bernshteyn has known Yuan for four or five years, and Coupa has long been a Zoom customer. The only thing that has changed with Coupa’s use of Zoom is that the company has started letting employees use their Zoom corporate accounts for face-to-face meetings.
“I use the word happy,” said Bernshteyn. “It’s one of the things he’s said from day one to make sure this platform creates happiness. He sure has created a great platform and foundation to move in that direction for a lot of people who otherwise wouldn’t could have. ” be connected. “
Coupa’s shares are up 144% this year, an increase barely in line with Zoom’s but nonetheless highlighting a trend for 2020.
“If the digital transformation accelerates, we probably want to lag behind some of the companies that are driving this into the world,” said Bernshteyn, trying to articulate what investors were thinking. The WisdomTree Cloud Computing Fund, an exchange-traded fund that tracks an index of the cloud companies owned by venture capital firm Bessemer, grew 119% this year.
Expanding Zoom has not always been easy. In the spring, after Zoom was at the end of an unprecedented demand, the company was also bombarded with concerns about the privacy and security of the software. Then came the questions about Zoom and Yuan’s connections to China. Nancy Pelosi, spokeswoman for the House of Representatives, called Zoom a Chinese entity on live television.
Yuan responded by posting on a company blog.
“I became an American citizen in July 2007,” he wrote. “I’ve lived happily in America since 1997. Zoom is an American company incorporated and headquartered in California, incorporated in Delaware, and publicly traded on the Nasdaq.”
In June, after Zoom announced it had closed accounts holding meetings to commemorate the 1989 protests in Tiananmen Square in Beijing after the Chinese government brought Zoom’s attention to the meetings. Senator Josh Hawley, a Republican who represents Missouri, sent Yuan a letter saying his company had apparently chosen to support censorship over free speech. “Are you trying to win favor with the Chinese Communist Party?” Hawley wrote.
Yuan told analysts in the company’s first quarter earnings call in June that he had been under severe pressure between the surge in usage and what he described as negative PR. He said other CEOs gave their support and advice.
Weeks later, Subrah Iyar, who was Webex’s chief executive at the time of the acquisition and an early Zoom investor, joined Yuan’s defense.
“I’ve known Eric since the day he came to the US,” Iyar said in a video posted on his LinkedIn page. “He is one of the most sincere people I have ever met. He embodied the culture we have tried to convey to Webex: a win-win situation for our customers, for our partners and for our employees.”
All the pressure would have been worth it. According to Bloomberg estimates, Yuan is now worth twice as much as Marc Benioff, co-founder and CEO of Salesforce, who has been selling enterprise cloud software since 1999 to keep track of customers. Benioff was lauded on Salesforce Investor Day earlier this month, zooming in on the role it can play for salespeople who can’t face-to-face with customers.
“I don’t think there has been a more important moment in history for sales organizations, B2B sales organizations,” said Benioff. “Those sales organizations that haven’t automated, who don’t know how to use Zoom, who don’t know how to use Salesforce, have been at a very significant disadvantage this year.”
Benioff has a proven record of making donations, and his company has long made grants to nonprofits. Yuan isn’t here yet, although Zoom launched a nonprofit donation arm called Zoom Cares earlier this year.
“While this foundation’s main long-term priorities are education, climate change and social justice, our main grants in the first quarter went to organizations making a difference during Covid-19,” Yuan was quoted in a June statement.
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