Zoom Video Communications, Inc. on Tuesday announced that it is opening a new technology centre in Bengaluru. Zoom already has an office in Mumbai, and a data centre each in Mumbai and Hyderabad.
Zoom said that between January and April, its free user base in India grew 6700%, while the paid user base grew four times. This expansion will supplement Zoom’s existing R&D centres and support Zoom’s engineering leadership, which is based at its San Jose, California headquarters, a release said.
“We plan to hire key employees for the technology centre over the next few years, pulling from India’s highly-educated engineering talent pool. This facility will play a critical role in Zoom’s continued growth,” the release quoted CEO Eric S. Yuan as saying.
Bawa said that India was an incredibly important market for Zoom. ““India has one of the richest sources of technology companies available and they are the most likely to take on video collaboration services; you have the second-largest telco market… [and] you have an individual user base that is willing to adopt technology in a mass way.”
Velchamy Sankarlingam, president of product and engineering, said the Bengaluru centre would be an innovation hub. “The talent in India is truly exceptional and we are looking forward to expanding our DevOps, IT, security, and business operations teams here as we scale our operations.”
Zoom executives said that the focus was on international markets now. “In Q1, we had over 250% growth outside the US compared to the previous year, and that was about 25% of our revenues,” Abe Smith, head of international, said.
Last week, Bawa spoke to Fortune India from Saratoga, California, over a Zoom call, in one of her first interactions with Indian media. She spoke about Zoom’s evolution, its origins, keeping data safe, competition, and coping with the pandemic, among other things. Edited excerpts:
How have you dealt with the surge in users worldwide? How did you scale up?
It is difficult to anticipate this kind of demand and then react to it. I would say that there’s a lot of aspects to Zoom that deliver the service that you see today—very easy to use and a good video connection despite a lot of load on networks—and one of those things is our architecture and the way we have architectured our product on the back end. We ourselves tested our own abilities to scale through this pandemic. I would say it is the architecture, it’s our own ability to know how to scale our product. And so far, so good.
Of course, we have had to take on a whole lot of new users and customers; of course, it’s a tax on the organisation. From the person taking the order, processing the order, provisioning the service, you can imagine that the entire organisation has been taxed. And we have deployed resources where possible.
It helps to have a very team-oriented culture where people sort of just pitch in. Our employee culture is strong; we do have a value system that stresses care for, not just the community, the customer base, but even the employees and ourselves. And I think that we see that as a testament to what we have been able to deliver through the pandemic.
What do you think of India as a market? Are you engaging with the government to put an end to rumours?
India is extremely important for many different reasons. First, India itself is such an important marketplace for us—we have a lot of customers who have R&D centres in India that they want to connect to. In our quest to expand the resources available to us, we want to tap into the extraordinary talent within India, and we are very committed, to serving India and all those facets.
I would say right now we are actively engaged with the government to have them get to know us as well. So, we do not have these rumours flying around and we kind of put them to rest.
What do you think of competition? What sets you apart? What do you have to say about competition from India, more specifically JioMeet?
We have been dealing with competition since 2011, when the company was founded. We have had to deal with very large incumbents in the marketplace from an early timeframe. We view competition as a good thing. It only spurs us to focus on what we can control—our innovation and our ability to deliver happiness to our customers.
It takes a lot for us to deliver Zoom in the way it is: a very easy to use, high quality, video collaboration service. And as I mentioned, the architecture is very important. The know-how around the globally distributed network that we have, even the user interface, the simplicity, the feature set, etc. These are all things that we agonise over and have agonised over in our development. And really take feedback from our customers to heart—both our free customers all the way to our paid customers.
I would say there is no one thing that makes Zoom special. I think it is a combination of all of that and an intensely focussed and driven employee base that really cares for its customer and its community. And I think that has helped us up to this point address competitive threats, and it will help us going forward.
About JioMeet, to be honest, I haven’t looked at the product. But I will say the factors that help us compete, you know, historically are going to be the factors that help us compete going forward, we are focussed on delivering a very secure, very reliable, and very easy to use product. And that we are going to focus on what we can control.
Having said that competition just makes you more hungry. There should be no difference to how that impacts Zoom today as it has impacted Zoom years before as well and all along.
There is speculation about Zoom being a Chinese company. Could you tell us something about its origins?
I will just say that Zoom is not a Chinese company. We are listed on the Nasdaq and our headquarters are here in San Jose. Our founder [Yuan] may be ethnically Chinese, but he’s an American citizen. He's been in this country since 1997. His three kids go to the local schools. His life has largely been American by choice.
We were set up with the intention to provide workplace collaboration services, for businesses, and with the view that, if we can provide video conferencing or video collaboration services to enterprises. That would be sort of the holy grail for us. At the end of December, we had around 10 million daily meeting participants. And by the end of April we had 300 million daily meeting participants, and that has been the significant shift during the pandemic.
A lot of it are schools. Education has always had a big value for our company. Eric’s core passion in education, but it's also our employees’ core passion. We did a ground-up survey of our employees and education was one of the top three initiatives. So, it made sense when the pandemic hit, to offer countries across the world, the opportunity to have free service for schools.
I think I noticed the difference when we offered K through 12 services for free in the U.S. Suddenly everybody knew about Zoom. We started to get a lot of different use-cases that we had probably not anticipated, because largely we are focussed on enterprises. And the challenge we face going forward is how do we embrace and continue to allow to flourish these various use-cases.
Zoom was made for the enterprise, but individuals took to it in droves. Did problems such as ‘Zoombombing’ and the like crop up because it wasn’t being used the way it was envisaged to be?
Zoom was originally developed for enterprise use and has been confidently selected for complete deployment by a large number of institutions globally, following security reviews of our user, network, and datacentre layers. However, we saw more participation from standalone users, who have been using the platform to connect to their family, friends, and colleagues; increased usage by schools to continue the education processes, etc. A lot of such users are unaware of various security measures one should adopt while on a virtual platform, leading to issues like meeting bombing.
Zoom has recently launched the latest version, Zoom 5.0, that delivers one of our most advanced security enhancements to date with support for AES 256-bit GCM encryption, which provides added protection for meeting data and greater resistance to tampering. The version provides users with features like reporting a user, new encryption icon, and enhanced data centre information which allows more flexibility and security to users.
Let us talk about end-to-end encryption (E2EE) and endless speculation about whether it would be offered to free users. How do you end the speculation?
Well, let me end it right now. We are in the development process for end-to-end encryption. We have already announced that we’re going to have a limited beta. And then we are going to continue working on rolling out this product through the end of the year. It will be the first end-to-end encryption feature available on video collaboration. It’s very hard to do and then it will be the first. What we’re trying to accomplish is to have in Zoom formats or Zoom scale… I want to be very clear that it will be available for all customers across the platform, both paid and free. We’re still working out the details, but we will probably deploy some sort of a one-time risk-based authentication for free users that use E2EE.
But at the end of the day, it is extremely important that we provide an opportunity for our customers to have communications that they believe are private and secure. I want to just make sure that you’re aware that today even without E2EE, when our customers are using the application and are on the parts of the application that are controlled by Zoom, they have AES 256-bit GCM encryption, which is industry leading today.
All Zoom users will continue to use AES 256 GCM transport encryption as the default encryption, while E2EE will be an optional feature. This is because it limits some meeting functionality, such as the ability to include traditional PSTN phone lines or SIP/H.323 hardware conference room systems. Hosts will toggle E2EE on or off on a per-meeting basis. And account administrators can enable and disable E2EE at the account and group level.
How has Zoom adapted itself to the different ways it is being used? And how are you keeping users’ data, especially children’s data, safe?
As I mentioned, we began offering K through 12 services for free in a lot of different jurisdictions—I’ll be honest with you—out of the goodness of our hearts. And I think there we noticed an opportunity to improve our own services.
Our focus historically has been on the enterprise. And we have a very flexible service as enterprises want flexibility, so that they can tailor the services and the product to their needs. That usually happens through an IT department. When we started offering the service free to schools, we saw that some had IT departments, while others did not. And what we started to realise is that it was not consistent, and in many ways, we had to step in and become the IT department for the school, which is not something that we had prepared for. And we also had teachers, for example, turning off features because they felt they were inconvenient; but guess what, by default, that makes you a little bit more susceptible to intrusion or, you know, unwanted people joining your meetings.
We also had a lot of user error where kids would say, ‘I don’t want to go to class, so I’m going to give my meeting password and ID to my friend and let them join and sort of create some ruckus,’ … things like that. So, we’ve done a few things. We have updated for K through 12, and even all our free and basic accounts, we’ve sort of mandated passcodes. And a waiting room by default. We also say that screenshare for host is only turned on by default for our K through 12 schools as well as our free and basic and single pro accounts.
We’ve also done a whole host of education. We’ve proactively reached out to schools to sort of educate the teachers and administrators to make sure that they understand the security features available to them. We’ve also taken all those features and put them on in one area. I think, prior to this, we hadn’t really focussed on this for enterprises. But if you’re in the middle of your meeting and someone disrupts your meeting, it can be jarring. So, we wanted to have an easy way to go find the security feature. You can access all security features with one button. And it’s easy to customise, it’s easy to react. We’ve also added a ‘report a user’ button where the host can say, something awful is going on and can hit the button and take a screenshot. And obviously, it’s with your consent to the host. All those kinds of things we have done to enhance the security offering for K through 12 schools because this is an especially important population. And education is such a big focus for us, not from a revenue or a business perspective, but from the heart, to be perfectly honest.
How did the Zoom team to manage during the pandemic?
For the Zoom people? Well, it has been incredible. I don’t know the exact metric, but everybody is working significantly hard during the pandemic... to deliver a service that hasn’t been planned for. Personally speaking, I’m more productive. Is it good for my body? Probably not as I’m taking lesser steps. Those kinds of trade-offs are happening.
I would say Zoom makes the human connection so easy. I can look into your eyes and I can sort of see the sentiment that you’re feeling. And I have the type of face that you can see what I’m thinking when you see my face. And so, we enable that sort of human-to-human connectivity. The quality is outstanding. It’s reliable, and it is a quick and easy way to connect with your colleague in a way that promotes human connection. And so actually I find us being more productive.
And we’re Zoom. So, we have a flexible mindset. We don’t have those biases on video conferencing in general and we think it expands the potential. For the future of work in general, I think that it has changed. And I see that even in the way our customers are asking us questions, they want our view on how we believe things will progress over time. And what we’re seeing in our customer base, I think it has taught corporations all over the world, that the world is your oyster. Why limit yourself to any region or any building, etc? You can hire from different places that make it easier for you to get the talent that you need. You can also have different models where you optimise space for things that require space for activities and actions that require in-person meetings to, you know, be more productive. Maybe new people want to have a similar sort of physical connection. It’s easier to meet people in the office and chit chat.
I would say I’m personally wondering how we recreate on Zoom for new employees, etc. But I think the possibilities have opened and I think people are much more flexible in their mindset on how to incorporate video conferencing in a more ingrained away.
Shall Zoom be as popular among individuals once people start returning to offices? Or shall it stay the mainstay of enterprises? What does your crystal ball say about the future of the workplace?
I don’t know. I think it is [the mainstay of enterprises]. I don’t think it will change what we are. We are for enterprises, for workplace collaboration. I think your guess is as good as mine. We’ll have to see how sticky the consumer use-cases are. We are here today to help people get that human connection at a time when our lives have turned upside down. We are committed to continuing that post the pandemic. You know, it depends on sort of how people change their lives, or how you know, whether, you know, people use this for good. All indications are saying that consumers have realised that video collaboration provides much more optionality for them, much more flexibility in their lives. And if that is something that they wish to leverage Zoom for, we would love to serve them in a secure, reliable way.
With virtual collaboration tools like Zoom, people have realised success. Employers have realised that employees are more productive and motivated while working from home. Not just working, we are also seeing a trend of frequent events being held on digital platforms. As more people become comfortable with working online, we can expect digital events to have higher relevance and better market penetration.
We expect a future where both virtual and face-to-face connect will coexist in a hybrid environment. Online will enable and expand face-to-face event models, leading to increased attendee capacity, allowing people to connect from anywhere in the world. This will also bring about new monetisation channels, providing face-to-face connects with seamless and scalable models. We are excited to see the industry transform and play a key role in the transition.
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