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A Pandemic Winner: How Zoom Beat Tech Giants To Dominate Video Chat

Mar 19, 2021
Originally published on March 19, 2021 11:06 am

If there's one business that has come out ahead after a very hard year, it's Zoom.

The Silicon Valley upstart has become synonymous with video chat over the course of the pandemic. It has fulfilled our need to see and be with each other, even when we can't do that in person. And it's beat out some of the biggest names in tech along the way.

Kelly Steckelberg, the company's chief financial officer, can pinpoint the day when everything changed: March 15, 2020.

"Almost overnight, the demand grew exponentially," she told NPR.

Zoom had sent its own workforce home two weeks earlier. By mid-March, businesses across the world were doing the same and looking for ways to keep working remotely. Schools were setting up virtual classrooms, so Zoom started offering educational accounts.

Then, the floodgates opened.

"People were thinking, 'Oh my gosh, I still need my children to take their tutoring lesson' or 'I still want to take my yoga class,'" Steckelberg said. "This is what we started to see happening sort of gradually and then, all of a sudden, it really exploded for us."

Fitness classes, happy hours and club DJs moved to Zoom. So did court proceedings and presidential campaigns. People celebrated weddings and bar mitzvahs. They learned to give themselves haircuts and facials.

There were sad moments too. Companies laid off workers over Zoom. Families held Zoom memorial services when they couldn't gather together to honor the loved ones they lost.

Just how quickly the technology reshaped people's lives can be summed up in a single figure: Zoom meetings attracted 300 million participants a day by April — 30 times the amount just four months earlier.

"It was just simply way easier"

Zoom was going up against well-known video software like Webex and GoToMeeting, not to mention products from tech giants such as Google and Microsoft.

So how did it beat these heavyweights?

"The real reason is: It was just simply way easier," said Jason Fried, CEO of Basecamp, which makes software to help employees collaborate even when they're not in the same office. Fried is no stranger to video and conference-call software. He's been working remotely for nearly two decades and even wrote a book with his co-founder, David Heinemeier Hansson, called Remote: Office Not Required.

Fried says Zoom made sending a meeting link as easy as sharing a YouTube video. People invited to Zoom meetings don't have to log in or download software, a key difference with competing products.

"You open a room, you get a URL, you send the URL around to people. That's it," he said.

That simplicity, combined with high-quality video and stable connections, meant that even though Zoom had designed its software for business use, it was really easy for everyone else to use too.

The rise of Zoombombing and other security threats

But Zoom's growing popularity and convenience came with a downside: Intruders crashed Zoom meetings because security was so lax. The attacks soon gained a name: Zoombombing.

Town halls, university classes and Alcoholics Anonymous meetings were all targets. It got so bad, the FBI issued a warning.

Among the victims was Dennis Johnson. Last March, he was defending his doctoral dissertation on Zoom, in front of family and friends, when an unknown attacker scrawled racial slurs and genitalia on the screen.

A year later, Johnson says he still avoids Zoom when he can.

"Every time somebody calls me a doctor, I think of that moment," he said. "It's just a nasty taste in my mouth."

Zoom's problems didn't end there. Researchers uncovered other security and privacy flaws, including one that could let hackers spy through a computer's webcam or microphone. The company told users meetings were fully encrypted when they weren't. It admitted it shut down the accounts of activists in China after pressure from its government.

The company went into damage control mode, issuing fixes for the flaws and helping users lock down their meetings. It put everything except privacy and security on pause for three months. Eventually, it reached settlements with federal and state regulators investigating the issues.

Steckelberg, Zoom's CFO, describes that period as "a humbling experience for all of us."

"But we learned a lot through it," she added. "And we have come out on the other side a better company with a stronger and more secure platform."

Post pandemic, a new "hybrid" normal

Now, after a year of daily life and major milestones conducted over Zoom, what happens as more people get vaccinated and can go back to seeing others face to face?

"There could definitely be a Roaring '20s type feel post-COVID, where people are just going to want to get out," said Daniel Ives, an analyst at Wedbush Securities. But he said Zoom has made such inroads into people's lives that, over the long term, it's "here to stay."

Zoom is betting that people will still use video to meet, especially in the workplace. Many analysts are predicting a future of hybrid work, with more people working remotely at least some of the time. After Zoom's sales more than quadrupled in 2020, the company projects revenue will grow another 43% this year, topping $3.7 billion.

But there is also increasing acknowledgment of "Zoom fatigue" — that feeling of being wiped out after video meetings.

Jeremy Bailenson, founding director of Stanford University's Virtual Human Interaction Lab, recently published a paper identifying four causes of the phenomenon, including "excessive" amounts of eye contact and the burden of staring at yourself on the screen.

Bailenson told NPR he thinks video meetings are a great tool for communication. But he urges people to be more conscious of how, and when, they use apps like Zoom.

As COVID-19 restrictions lift and workplaces reopen, he said, "I hope that where we land is somewhere between the two extremes" of being in the office full time and working remotely.

"Looking back, the 9-to-5, everybody needs to be in the same place at the same time during that window so you can pound on a computer for eight hours straight — that's in our rear view mirror," he said.

Editor's note: Zoom, Google and Microsoft are among NPR's financial supporters.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

STEVE INSKEEP, HOST:

Roughly one year ago, I heard colleagues refer to a meeting on Zoom. It was one of those passing references, you know, where people assume you already know what they mean. But I didn't. I'd literally never heard of the brand. Within a few days, of course, I knew, as did millions of others who likely had not known before. Zoom is by no means the only way for a video meeting, but the company has come out ahead during the pandemic. Zoom is among NPR's financial supporters, and we cover it like any other company. NPR's Shannon Bond has the company's pandemic story.

SHANNON BOND, BYLINE: Zoom's chief financial officer, Kelly Steckelberg, vividly remembers one specific date last spring.

KELLY STECKELBERG: March 15 last year was the day when everything changed. It's like we woke up, and almost overnight, the demand grew exponentially.

BOND: Demand from companies trying to keep running after sending everybody home, schools setting up virtual classrooms - then the floodgates opened. Here at NPR, we did stories about fitness classes moving to Zoom.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

KATIE GOULD: You're going to need a broom and a towel.

BOND: Happy hours, complete with drinking games.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

DJ HADDAD: We figured out rules for virtual beer pong.

BOND: One of our producers watched her sister get married over Zoom.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

UNIDENTIFIED PERSON: You may now seal your vows with a kiss.

(CHEERING)

BOND: By April, Zoom meetings were attracting 300 million participants a day, 30 times the amount just a few months before. Zoom was an upstart, and it was going up against products from giants like Google and Microsoft, which are both NPR supporters. So how did Zoom beat these heavyweights?

JASON FRIED: The real reason is, it was just simply way easier.

BOND: Jason Fried is CEO of Basecamp, a company that makes remote work software. He told me, over his preferred app, Skype, he's been working remotely for two decades. He says Zoom made sending a meeting link as easy as sharing a YouTube video.

FRIED: You open a room. You get a URL. You send the URL around to people. That's it.

BOND: Unlike other video meetings, the people you invite to Zoom don't have to log in or download software. Fried says that simplicity meant, even though the app was intended for companies, it was really easy for everyone else to use, too. But Zoom was so popular and convenient, it had a downside.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED NEWS ANCHOR: The FBI is warning about Zoom bombing.

BOND: Intruders had started crashing Zoom meetings because security was so lax. Town halls, school classes, AA meetings were all targets. Dennis Johnson knows all about this. Last March, he was defending his doctoral dissertation on Zoom in front of family and friends when an unknown attacker scrawled racial slurs and genitalia on the screen. A year later, Johnson still avoids Zoom when he can.

DENNIS JOHNSON: Every time somebody calls me a doctor, I think of that moment. So it's just like - it's just a nasty taste in my mouth.

BOND: Researchers uncovered other security and privacy flaws. Zoom told users meetings were fully encrypted when they weren't. The company admitted it shut down the accounts of activists in China after pressure from the government. Zoom went into damage control mode. It put everything except privacy and security on pause for three months, and it reached settlements with federal and state regulators investigating the issues. Steckelberg, Zoom's CFO, says the episode was a wake-up call.

STECKELBERG: It was a humbling experience for all of us, but we learned a lot through it. And we have come out on the other side a stronger - a better company with a stronger and more secure platform.

BOND: Now, after a year of daily life and major milestones conducted over Zoom, what happens when people get vaccinated and can go back to seeing each other face to face? Daniel Ives is an analyst at Wedbush Securities.

DANIEL IVES: There could definitely be a Roaring '20s-type feel post-COVID where people are just going to want to get out and just almost a pent-up demand.

BOND: But, he says, Zoom has made such inroads into our lives in the past year, it's here to stay. So there's still time to learn how to use the mute button.

Shannon Bond, NPR News.

(SOUNDBITE OF MARLEY CARROLL'S "FIREFLIES") Transcript provided by NPR, Copyright NPR.