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Protocol | Enterprise

Zoom’s second act? A $14.7 billion deal for Five9’s call-center tech.

The combined entity is poised to compete aggressively in the rush by enterprises to digitize their call centers.

Zoom CEO Eric Yuan

Under CEO Eric Yuan, Zoom is expanding its offerings.

Photo: Kena Betancur/Getty Images

Zoom is doubling down on the enterprise in a big way.

Its proposed $14.7 billion, all-stock purchase of Five9 gives the teleconferencing provider a huge presence in the customer service industry, a market in upheaval as companies rush to digitize and automate the human-centric processes of the past, as well as begin to use their call centers to build digital replicas of customers and enable more targeted marketing.

While Zoom profited heavily off the need for businesses and consumers alike to communicate virtually during the pandemic, analysts have questioned how the company would diversify as 2020's sugar rush began to wane and more organizations brought employees back into the office.

Zoom offers some services for free, but has steadily been growing its subscription businesses. It launched its own business phone product in January 2019, for example, a challenger to competing tools from RingCentral and others. But even with the Five9 deal and expansion into the call center, industry experts say more acquisitions are likely.

"Zoom has to do more than Zoom. It makes sense from that perspective," said Valoir analyst Rebecca Wettemann. "They have the opportunity to do more. The smart move is to look more at analytics."

With Five9, Zoom gets access to a fast-growing enterprise software business and industry-leading automation tools that can be applied to its core videoconferencing business. One of the areas Zoom has lagged, according to analysts like Wettemann, is investing in advanced capabilities that harness the power of artificial intelligence to layer on more intelligent features to calls. Rival Microsoft has made it a focus and is adding tools like sentiment analysis to Teams. Five9 offers real-time transcription services, for example, as well as a post-call analysis service. A combined Zoom-Five9 can also offer an attractive option for video-based customer interactions, the next frontier for call centers.

"Enterprises primarily communicate with their customers through the contact center. And this acquisition can bring together best in class video and contact center solutions to create a leading customer engagement platform," Zoom CEO Eric Yuan told investors on Monday.

But Zoom is entering a sector that is still dominated by incumbent providers, namely Avaya, Cisco and Genesys, that are rushing to build out cloud-based offerings to replace the on-premises systems that still dominate many large enterprises. Other Five9 competitors like NICE inContact are also growing at a fast clip as more companies switch to the cloud. And new entrants like AWS and ASAPP are banking on their technology as a differentiator; Five9, for example, uses products from both AWS and Google to support its own AI-based offerings, according to CEO Rowan Trollope.

"We get to stand on the shoulders of giants … with the underlying primitive technology," he told Protocol earlier this year.

AWS is an interesting competitor; it doesn't offer an out-of-the-box service, but rather gives companies the option to build their own call centers using drag-and-drop modules. While the company touts the ability for any organization to quickly prop up their own service department, Trollope said AWS has only seen traction in the most tech-forward firms.

"We don't see them too much because it's apples and oranges," he said. "If we're both in a deal at the final stages, something has gone wrong."

But that divergence gets to the heart of how different contact-center-as-a-service, or CCaaS, is compared to Zoom's core business. Most corporations use several different videoconferencing providers and the switching costs are low. That's not true in the call center.

Organizations have spent years, if not decades, building out their current on-premises systems, including linking them on the back end to other applications like customer-relationship management software or workforce management systems. Many businesses are still stuck in multiyear contracts; Five9 sees the most success when targeting prospective customers who are reaching the end of the current maintenance cycle, per Trollope. And a typical onboarding takes several months.

"It's not like deploying Zoom," said Trollope.

Before the pandemic, enterprises were hesitant to spend too heavily on call center software because there wasn't as much of a return on investment. Now, as the pivot to the cloud opens up new automation capabilities, that thinking has changed.

And with Five9's tech like real-time audio transcription, which Trollope said can now recognize voice better than human agents — along with an expanded customer base that includes some of the world's largest businesses — Zoom could be a juggernaut poised to compete aggressively in a fast-growing market against legacy incumbents and new challengers.

Protocol | Fintech

Amazon wants a crypto play. Its history in payments is not encouraging.

It missed chances to be PayPal, Square and Stripe — so is this its chance to miss being Coinbase, too?

Amazon wants to be a crypto player.

Image: NurPhoto/Getty Images

The news that Amazon was hiring a lead for a new digital currency and blockchain initiative sent the price of bitcoin soaring. But there's another way to look at the news that's less bullish on bitcoin and bearish on Amazon: 13 years after Satoshi Nakamoto's whitepaper appeared on the internet, Amazon is just discovering cryptocurrency?

That may be a bit unkind, but the truth is sometimes unkind. And the reality is that Amazon has a long history of stumbles and missed opportunities in payments, which goes back more than two decades to the company's purchase of internet payments startup Accept.com.

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Owen Thomas

Owen Thomas is a senior editor at Protocol overseeing venture capital and financial technology coverage. He was previously business editor at the San Francisco Chronicle and before that editor-in-chief at ReadWrite, a technology news site. You're probably going to remind him that he was managing editor at Valleywag, Gawker Media's Silicon Valley gossip rag. He lives in San Francisco with his husband and Ramona the Love Terrier, whom you should follow on Instagram.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

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Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Enterprise

How Google Cloud plans to kill its ‘Killed By Google’ reputation

Under the new Google Enterprise APIs policy, the company is making a promise that its services will remain available and stable far into the future.

Google Cloud CEO Thomas Kurian has promised to make the company more customer-friendly.

Photo: Michael Short/Bloomberg via Getty Images 2019

Google Cloud issued a promise Monday to current and potential customers that it's safe to build a business around its core technologies, another step in its transformation from an engineering playground to a true enterprise tech vendor.

Starting Monday, Google will designate a subset of APIs across the company as Google Enterprise APIs, including APIs from Google Cloud, Google Workspace and Google Maps. APIs selected for this category — which will include "a majority" of Google Cloud APIs according to Kripa Krishnan, vice president at Google Cloud — will be subject to strict guidelines regarding any changes that could affect customer software built around those APIs.

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Tom Krazit

Tom Krazit ( @tomkrazit) is Protocol's enterprise editor, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire, and served as executive editor of Gigaom and Structure.

Amazon job opening points to plan to accept crypto payments

The news sparked a rally in the values of bitcoin and other cryptocurrencies.

Amazon may be planning to let customers pay for orders with cryptocurrencies.

Photo: David Ryder/Getty Images

Amazon is looking to hire a digital currency and blockchain expert suggesting a plan to let customers accept cryptocurrencies as payments.

The tech giant's job opening says Amazon is looking for "an experienced product leader" to help develop the company's "digital currency and blockchain strategy and roadmap" Amazon is looking for product leader with expertise in blockchain, distributed ledger, central bank digital currencies and cryptocurrency.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

Protocol | Policy

Big Tech tried to redefine terrorism online. It got messy fast.

The Global Internet Forum to Counter Terrorism announced a series of narrow steps it's taking that underscore just how fraught the job of classifying terror online really is.

Erin Saltman is GIFCT's director of programming.

Photo: Paul Morigi/Flickr

A little over a month after the Jan. 6 riot, the tech industry's leading anti-terrorism alliance — a group founded by Facebook, YouTube, Microsoft and Twitter — announced it was seeking ideas for how it could expand its definition of terrorism, which had for years been more or less synonymous with Islamic terrorism. The group, called the Global Internet Forum to Counter Terrorism or GIFCT, had been considering such a shift for at least a year, but the rising threat of domestic extremism, punctuated by the Capitol uprising, made it all the more clear something needed to change.

But after months of interviewing member companies, months of considering academic proposals and months spent mulling the impact of tech platforms on this and other violent events around the world, the group's policies have barely budged. On Monday, in a 177-page report, GIFCT released the first details of its plan, and, well, a radical rethinking of online extremism it is not. Instead, the report lays out a series of narrow steps that underscore just how fraught the job of classifying terror online really is.

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Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

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