Despite Zoom’s success in amassing a base of over 300 million daily meeting participants on its video conferencing platform, the company suffered several security setbacks that have hindered its ability to attract enterprise customers. That has created an opportunity for competitors like Microsoft to swoop in on potential customers.
On April 1, Zoom CEO Eric Yuan announced a 90-day plan in which Zoom would channel all its engineering resources into fixing safety and privacy issues. At the time, these issues included a flawed end-to-end encryption system, as well as lax meeting entry rules that gave rise to the so-called Zoombombing phenomenon. And while Zoom daily meeting participants grew approximately 50% over the first three weeks of the 90-day plan, a number of prominent companies — including Daimler, Ericsson, Bank of America, and Tesla — enacted internal policies to avoid the service over security concerns, hindering Zoom’s ability to grow its base of paid enterprise subscribers.
Here are three recent developments that illustrate how Zoom is attempting to overcome its privacy missteps:
- Zoom made its first acquisition this week — Keybase, a 25-person startup that specializes in end-to-end security. In a blog post announcing the acquisition, Yuan said Zoom would offer an end-to-end encrypted meeting mode for paid enterprise clients. While Zoom previously stored meeting encryption keys on its own servers, presenting a potential vulnerability, Keybase will help Zoom distribute keys directly to meeting participants.
- Zoom hired its first lobbyist to push back against privacy concerns emanating from US government officials. The lobbyist, Josh Kallmer, previously worked for a tech industry lobbying group whose members included Apple, Facebook, and Microsoft, according to Bloomberg. Yuan’s stated effort to “engage stakeholders in Washington” comes on the heels of at least three state attorneys general, Speaker Nancy Pelosi, and Ohio Sen. Sherrod Brown raising concerns over the security of Zoom.
- Zoom addressed privacy concerns held by the New York City Department of Education, paving the way for its platform to be used in the school system. The school system placed a ban on Zoom in late March over security concerns, which pushed teachers toward Microsoft Teams instead. The amended policy sets a precedent that will help Zoom regain share of the burgeoning remote education market. Among the changes enacted by Zoom: Passwords and virtual waiting rooms will be turned on by default for those using the free K-12 education accounts.
Although Zoom maneuvered quickly to address privacy concerns, Microsoft and Google have nonetheless positioned themselves to steal Zoom’s market share in the long run. Both Microsoft and Google have been pouring internal resources into their competing video conferencing platforms in a bid to erode any competitive advantage held by Zoom. For instance, Google added a “tiled view” feature which mirrors Zoom’s popular grid view, while Microsoft enabled custom call backgrounds to match the capability within Zoom.
At the same time, both Microsoft and Google added a bevy of new features to their respective enterprise productivity suites — which encompass their respective video conferencing platforms — in a bid to capture the surge in utilization under quarantine. The response from the two tech giants illustrates the difficulty for a newcomer to break into the market, as the engineering resources held by big tech firms enable them to rapidly respond to a new competitor.