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Power

How Zoom won 2020 — and how 2020 changed Zoom forever

Zoom never imagined being the company the pandemic forced it to become. Now it has to grapple with what's next.

Zoom app on Facebook's Portal smart display

Zoom got so big in 2020 that even competitors like Facebook have embraced it.

Photo: Facebook

Zoom never wanted any of this. Coming into 2020, the company was in great shape: It was growing quickly, making money and becoming an essential tool for tech-forward businesses everywhere. It's not that nobody at Zoom had ever imagined being a home for happy hours, book clubs, yoga classes, elementary schools and doctor visits. It's just that Zoom had decided, fairly definitively, it never really wanted to be any of those things.

At the beginning of 2020, just before the pandemic upended the world and the rest of the year, Zoom Chief Product Officer Oded Gal told me that Zoom had no plans to become a consumer application. "We are still a business application," he said, "and we don't see ourselves moving away from that." There were some prosumers using Zoom outside of the 9-to-5, he said, and he certainly understood that there were compelling uses for consumer videochat. But he and Zoom were happy to leave those uses to FaceTime and Skype. "We don't want to be a consumer product," he said.

Trying to be both a consumer and business tool, CEO Eric Yuan told me around the same time, would actually be a mistake. One that he learned the hard way. "We were too ambitious" in the early days of Zoom, he said, "with business and consumer. We realized that's not realistic, because there's feature conflict." A consumer app would build fun filters and lenses; those features would just be in the way for business users. So Yuan and Zoom decided, firmly, to stay focused on businesses.

And yet here we are. 2020 was a banner year for videochat no matter who it came from, and it seemed like every app and device on the planet now has its own way to video chat. But the company clearly saw both an opportunity to grow during trying times, and an obligation to try and help where it could. "The pandemic expanded Zoom's reach from a business platform to a central part of daily life as people worldwide transitioned to working remotely, distance learning, and virtual gatherings," Zoom CMO Janine Pelosi said. And that changed the way Zoom thinks about practically everything.

Few companies have benefited more from the pandemic than Zoom. Its stock is up roughly 6x since the beginning of the year. Its revenue was up 367% in the most recent quarter, compared to the same quarter in 2019. It's an even more essential tool to even more businesses, with 485% more customers with more than 10 employees than it had a year ago. Maybe most impressively, Zoom continues to sit at the top of app store charts everywhere. Zoom has entered the rarified territory of Google and Band-Aid and Kleenex: It has become so mainstream that it now essentially defines the category. Videochats are Zooms, Zooms are videochats.

The Zoom Effect is permeating through the tech industry and through culture. Webcams were the year's hottest gadgets, and even camera manufacturers like Canon and GoPro rushed to build software to turn their products into top-notch models. Lots of people got plastic surgery just to look a little better on their Zoom calls. (Zoom's "touch up appearance" setting evidently doesn't go far enough for some people.) Devices like the Facebook Portal and the Google Home added support for Zoom, even though it competes with those companies' own products, because if you don't have Zoom you don't have anything. Zoom became an ongoing SNL punchline … and for a while, the only way the show got made at all.

Zoom is now officially and forever both a business and a consumer product. Which feels appropriate, really, given the way the pandemic has blurred the lines between work and life for everyone. "Nine months ago, if Zoom wasn't working, that was IT's problem," said Phil Libin, the CEO of video app Mmhmm. "And now it's not. It's your problem. That's a big change." That change forced Zoom to rethink the way its product worked: It stopped developing new features for months, opting instead to focus on increasing its security. "We now have a much broader set of users who are utilizing our product in a myriad of unexpected ways, presenting us with challenges we did not anticipate when the platform was conceived," Yuan wrote in a post announcing the 90-day security sprint. Even now, Yuan told CNN that his workdays are dedicated entirely to security and privacy.

Zoombombing, for instance, hadn't been an issue when Zoom was just for internal meetings, but suddenly Zoom's ease of use was a liability. The company also had to rethink the way it collected and stored user data, and even how it taught users to use the product. It's one thing to sell to IT departments, and quite another to get an influx of users who just found you on the App Store. That has changed Zoom in lots of little ways, too; it's now making a habit of lifting the 40-minute limit for free users around major holidays, and offering decidedly sillier virtual backgrounds than you might find in your average business meeting.

The pandemic didn't catch Zoom totally off-guard, though. The company had been betting for years that remote work would become more the norm, and was already thinking about deeper ways to help people interact from afar. The team has been investigating features like real-time translation and automatic note-taking for a while. Yuan thinks a lot about augmented reality: how to make a virtual handshake feel like a real one, how to make it easier for people to make eye contact through a webcam, how to make it so that everyone on your call can smell the coffee you're drinking. (Seriously.)

Zoom's big plan, at least before the pandemic, was to take over other parts of business communication. Zoom Phone was a growing project, replacing one desk phone at a time. And Zoom was working on things like text chat, too. "We think about the ability to upgrade the modalities," Gal said. "It's kind of a food chain: You can start with chat, then you can upgrade to voice calls and then you can upgrade to a video."

Zoom's still working on all that, but its ambitions have also gotten decidedly bigger. Now, rather than taking on Slack and Teams, Zoom is working on becoming the internet's next great platform. Zoom Apps let developers build their own Zoom integrations, and On Zoom turns Zoom into a full-fledged events platform. Zoom has features designed specifically for health care, others specifically for education. It is reportedly building email and calendar services, to more completely compete with Microsoft and Google, according to The Information. If video is indeed becoming more like an operating system than an app, Zoom might be Windows.

Being the center of modern life has its downsides, though. Zoom's connections to China, both within the company and inside the product, have raised concerns as high as Congress. Its security issues sparked an FTC investigation. And, of course, the video boom is turning into a crowded industry full of deep-pocketed players happy to give their stuff away for free just to take a bite out of Zoom.

But there's no question that 2020 has put Zoom at the epicenter of the technology industry, whether you're a user or a cloud-services company competing for the hottest contract of them all. The pandemic was the story of 2020, and no company describes life in a pandemic better than Zoom. Same goes for life in 2021 and beyond: The new normal is going to be a little different, for everyone and for Zoom. And like the rest of us, it's still learning exactly how that's going to work.

Politics

What tech policy could look like in Biden’s first 100 days

More antitrust laws and bridging the digital divide should be top of mind for the incoming administration.

Antitrust enforcement is one of the big lessons going into the Biden administration.
Photo: Alex Edelman/Getty Images

Although it is too soon to tell with certainty how President-elect Joe Biden will address the questions surrounding tech policy, it is clear that his inaugural transition on Wednesday will affect the world of tech.

Protocol reporters Issie Lapowsky and Emily Birnbaum, virtually met up with panelists Tuesday to discuss what tech policy and regulation could look like in Biden's first 100 days in office — as well as the next four years.

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Penelope Blackwell
Penelope Blackwell is a reporting fellow at Protocol covering ed-tech, where she reports on the decisions leading up toward the advances of remote learning. Previously, she interned at The Baltimore Sun covering emerging news and produced content for Carnegie-Knight’s News21 documenting hate and bias incidents in the U.S. She is also a recent graduate of Columbia University’s Graduate School of Journalism and Morgan State University.
Protocol | Enterprise

For VMware, replacing the CEO will be hard. Working with Dell will be harder.

Two early contenders for the role of CEO are operating chiefs Sanjay Poonen and Raghu Raghuram.

Pat Gelsinger is leaving VMware after eight years.

Photo: VMware

VMware CEO Pat Gelsinger's jump to Intel comes at a particularly precarious time for the company as it navigates a potential spinoff of the business from majority owner Dell.

Chief Financial Officer Zane Rowe is taking over the reins of the virtualization software provider temporarily as the board looks for a permanent replacement, according to a company statement on Wednesday. Two early contenders for the role are operating chiefs Sanjay Poonen and Raghu Raghuram, according to Morningstar analyst Mark Cash.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Protocol | Enterprise

RingCentral is battling Zoom and Teams. Here's how it hopes to win.

Despite being an underdog, the videoconferencing company is banking on key partnerships as a route to success around the globe.

"Don't count us out," RingCentral CEO Vlad Shmunis told Protocol. "Rome lost many battles, but never a war."

Image: Chris Montgomery

The Roman Empire had many enemies in its over 1,000-year history, but ultimately prevailed against most. That's why RingCentral CEO Vlad Shmunis is so apt to use it as a comparison.

The company is in the midst of a fierce competition for dominance in the rapidly growing cloud-based communications industry against Zoom, Microsoft and others. But despite its position as a relative underdog, Shmunis is confident the company will emerge victorious in the end.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

People

How tech leaders changed in 2020

We asked some of tech's most forward-thinking people how their work lives changed in 2020, and how their 2021 plans are shaping up.

One of 2020's most lasting effects: A total overhaul of how we spend our time.

Image: Clockwise

It can be hard to know what to take away from 2020. It was an utterly unique year, with so many changes forced on so many people. And hopefully, 2021 and beyond won't have too much in common with the year that passed. But everyone in tech seems to agree that whatever the future looks like, it'll be different because of what happened in 2020.

In that spirit, we asked a number of leaders across the tech world to reflect a bit on a crazy year, and to tell us a few things they've learned, what's changed, and how they're bringing the new normal into 2021. Here's what they told us.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Politics

Here’s how Big Tech is preparing for regulations in 2021

Companies know that the heat is only going to increase this year.

2021 promises to be a turbulent year for Big Tech.

Photo: Ting Shen/Getty Images

The open internet. Section 230. China. Internet access. 5G. Antitrust. When we asked the policy shops at some of the biggest and most powerful tech companies to identify their 2021 policy priorities, these were the words they had in common.

Each of these issues centers around a common theme. "Despite how tech companies might feel, they've been enjoying a very high innovation phase. They're about to experience a strong regulation phase," said Erika Fisher, Atlassian's general counsel and chief administrative officer. "The question is not if, but how that regulation will be shaped."

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Anna Kramer

Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

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