Zoom looks beyond video conferencing as triple-digit 2020 growth begins to slow

It’s been a heady 12-18 months for Zoom, the decade-old company that experienced monster 2020 growth and more recently, a mega acquisition with the $14.7 billion Five9 deal in July. That addition is part of a broader strategy the company has been undertaking the last couple of years to move beyond its core video conferencing market into adjacencies like phone, meeting management and messaging, among other things. Here’s a closer look at how the plan is unfolding.

As the pandemic took hold in March 2020, everyone from businesses to schools to doctors and and places of worship moved online. As they did, Zoom video conferencing became central to this cultural shift and the revenue began pouring in, ushering in a period of sustained triple-digit growth for the company that only recently abated.


By Ron Miller

Virtual meeting platform Vowel raises $13.5M, aims to cure meeting fatigue

Meetings are an inevitable part of the work day, but as workplaces became more distributed over the past 18 months, Vowel CEO Andy Berman says we are steadily moving toward “death by meeting.”

His virtual meeting platform is the latest to receive venture capital funding — $13.5 million — with the goal of making meetings more useful before, during and after.

Vowel is launching a meeting operating system with tools like real-time transcription; integrated agendas, notes and action items; meeting analytics; and searchable, on-demand recordings of meetings. The company has a freemium business model and will also be rolling out a business plan this fall for $16 per user per month. Extra features will include advanced integrations, security and admin controls.

The Series A was led by David Hornik of Lobby Capital, who was joined by existing investors Amity Ventures and Box Group and a group of individual investors, including Calendly CEO Tope Awotona, Intercom co-founder Des Traynor, Slack VP Ethan Eismann, former Yammer executive Viviana Faga, former InVision president David Fraga and Okta co-founder Frederic Kerrest.

Prior to starting Vowel, Berman was one of the founders of baby monitor company Nanit. The company had teams spread out around the world, and communication was tough as a result. In 2018, the company went looking for a tool that would work for synchronous and asynchronous meetings, but there were still a lot of time zones to manage, he said.

Taking a cue from Nanit’s own baby monitors that were streaming video over 17 hours a day, the idea for Vowel was born, and the company began to focus on the hypothesis that distributed work would be prevalent.

“People initially thought we were crazy, but then the pandemic hit, and everyone was learning how to work remotely,” Berman told TechCrunch. “As we now go back to hybrid work, we see this as an opportunity.”

In 2017, Harvard Business Review reported that executives spent 23 hours in meetings each week. Berman now estimates that the average worker spends half of their time each week in meetings.

Vowel is out to bring Slack, Figma and GitHub components to meetings by recording audio and video that can be paused at any time. Users can add notes and see where those notes fall within a real-time transcription that enables people who arrive late or could not make the meeting to catch up easily. After meetings are over, they can be shared, and Vowel has a search function so that users can go back and see where a particular person or topic was discussed.

The new funding will enable the company to grow its team in product, design and engineering. Vowel plans to hire up to 30 new people over the next year. The company recently closed its beta test and has amassed a 10,000-person waitlist. The public launch will happen in the fall, Berman said.

Workplace productivity and office communication tools are not new concepts, but as Berman explained, became increasingly important when homes became offices over the past 18 months.

Competitors took different approaches to solving these problems: focusing on video conferencing or audio or meeting management with plugins. Berman says an area where many have not succeeded yet is integrating meetings into the typical workflow. That’s where Vowel comes in with its “meeting OS,” he added.

“Our goal is to make meetings more inclusive and worthwhile, which includes the prep, the meeting and the follow-up,” Berman said. “We see the future will be about knowledge management, so the difference between what we are doing is ensuring you can catch up quickly and keep that knowledge base. A Garner report said that 75% of workplace meetings will be recorded by 2025, and that is a trend we are reinventing from the ground up.”

David Hornick, founding partner at Lobby Capital, said he became acquainted with Vowel from its existing investor Amity Ventures. Hornick, who sits on the GitLab board, said GitLab was one of the largest distributed companies in the tech space, prior to the pandemic, and saw first-hand the challenge of making distributed teams functionable.

When Hornick heard about Vowell, he said he “jumped quickly” on the opportunity. His firm typically invests in platform businesses that have the capacity to transform business spaces. Many are pure software, like Splunk or GitLab, while others are akin to Bill.com, which transformed how small businesses manage financial operations, he added.

All of those combine into a company, like Vowel, especially given the company’s vision for a meeting OS to transform a meeting space that hadn’t moved forward in decades, he said.

“This was quickly obvious to me because my day is meetings — an eight-Zoom day is a normal day — I just wish I could remember everything,” Hornick said. “Speaking with early customers using the product, when I asked them what they would do if this ever went away, the first thing they said was ‘cry,’ and, because there was no alternative, would return to Zoom or other tools, but it would be a big setback.”


By Christine Hall

Box, Zoom chief product officers discuss how the changing workplace drove their latest collaboration

If the past 18 months is any indication, the nature of the workplace is changing. And while Box and Zoom already have integrations together, it makes sense for them to continue to work more closely.

Their newest collaboration is the Box app for Zoom, a new type of in-product integration that allows users to bring apps into a Zoom meeting to provide the full Box experience.

While in Zoom, users can securely and directly access Box to browse, preview and share files from Zoom — even if they are not taking part in an active meeting. This new feature follows a Zoom integration Box launched last year with its “Recommended Apps” section that enables access to Zoom from Box so that workflows aren’t disrupted.

The companies’ chief product officers, Diego Dugatkin with Box and Oded Gal with Zoom, discussed with TechCrunch why seamless partnerships like these are a solution for the changing workplace.

With digitization happening everywhere, an integration of “best-in-breed” products for collaboration is essential, Dugatkin said. Not only that, people don’t want to be moving from app to app, instead wanting to stay in one environment.

“It’s access to content while never having to leave the Zoom platform,” he added.

It’s also access to content and contacts in different situations. When everyone was in an office, meeting at a moment’s notice internally was not a challenge. Now, more people are understanding the value of flexibility, and both Gal and Dugatkin expect that spending some time at home and some time in the office will not change anytime soon.

As a result, across the spectrum of a company, there is an increasing need for allowing and even empowering people to work from anywhere, Dugatkin said. That then leads to a conversation about sharing documents in a secure way for companies, which this collaboration enables.

The new Box and Zoom integration enables meeting in a hybrid workplace: chat, video, audio, computers or mobile devices, and also being able to access content from all of those methods, Gal said.

“Companies need to be dynamic as people make the decision of how they want to work,” he added. “The digital world is providing that flexibility.”

This long-term partnership is just scratching the surface of the continuous improvement the companies have planned, Dugatkin said.

Dugatkin and Gal expect to continue offering seamless integration before, during and after meetings: utilizing Box’s cloud storage, while also offering the ability for offline communication between people so that they can keep the workflow going.

“As Diego said about digitization, we are seeing continuous collaboration enhanced with the communication aspect of meetings day in and day out,” Gal added. “Being able to connect between asynchronous and synchronous with Zoom is addressing the future of work and how it is shaping where we go in the future.”


By Christine Hall

Zoom announces first startups receiving funding from $100M investment fund

For more than year now, Zoom has been on a mission to transform from an application into a platform. To that end it made three announcements last year: Zoom Apps development tools, the Zoom Apps marketplace and a $100 million development fund to invest in some of the more promising startups building tools on top of their platform. Today, at the closing bell, the company announced it has made its first round of investments.

Ross Mayfield, product lead for Zoom Apps and integrations spoke to TechCrunch about the round of investments. “We’re in the process of creating this ecosystem. We felt it important, particularly to focus on the seed stage and A stage of partnering with entrepreneurs to create great things on this platform. And I think what you see in the first batch of more than a dozen investments is representative of something that’s going to be a significant ongoing undertaking,” he explained.

He said while they aren’t announcing exact investment amounts, they are writing checks for between $250,000 and $2.5 million. They are teaming with other investment partners, rather than leading the rounds, but that doesn’t mean they aren’t working with these startups using internal resources for advice and executive backing, beyond the money.

“Every one of these investments has an executive or senior sponsor within the company. So there’s another person inside that knows the lay of the land, can help them advance and spend more personal time with them,” Mayfield said.

The company is also running several Zoom chat channels for the startups receiving investments to learn from one another and the Zoom Apps team. “We have a shared chat channel between the startup and my team. We have a channel called Announcements and a channel called Help, and another one that the startups created called Community,” he said.

Every week they use these channels to hold a developer office hour, business office hour which Mayfield runs, and then there’s a community hour where the startups can gather and talk amongst themselves about whatever they want.

Among the specific categories receiving funding are collaboration and productivity, community and charity, DE&I and PeopleOps, and gaming and entertainment. In the collaboration and productivity category, Warmly is a sales tool that provides background and information about each person participating in the meeting ahead of time, while allowing the meeting organizer to create customized Zoom backgrounds for each event.

Another is Fathom, which alleviates the need to take notes during a meeting, but it’s more than recording and transcription. “It gives you this really simple interface where you can just tag moments. And then, as a result you have this transcript of the video recording, and you can click on those tagged moments as highlights, and then share a clip of the meeting highlights to Salesforce, Slack and other tools,” Mayfield said.

Pledge enables individuals or organizations to request and collect donations inside a Zoom meeting instantly, and Canvas is a hiring and interview tool that helps companies build diverse teams with data that helps them set and meet DEI goals.

These and the other companies represent the first tranche of investments from this fund, and Mayfield says the company intends to continue looking for startups using the Zoom platform to build their startup or integrate with Zoom.

He says that every company starts as a feature, then becomes a product and then aspires to be a line of products. The trick is getting there.  The goal of the investment program and the entire set of Zoom Apps tools is about helping these companies take the first step.

“The art of being an entrepreneur is working with that risk in the absence of resources and pushing at the frontier of what you know.” Zoom is trying to be a role model, a mentor and an investor on that journey.


By Ron Miller

Zoom buys cloud call center firm Five9 for $14.7 billion

Zoom is taking advantage of the impressive rise in its stock price in the past year to make its first major acquisition. The popular video conferencing firm, which was valued at about $9 billion at its IPO two years ago, said Sunday evening it has agreed a deal to buy cloud call centre service provider Five9 for about $14.7 billion in an all-stock transaction.

20-year-old Five9 will become an operating unit of Zoom after the deal, which is expected to close in the first half of 2022, the two firms said.

The proposed acquisition is Zoom’s latest attempt to expand its offerings. In the past year, the video conferencing software has added several office collaboration products, a cloud phone system, and an all-in-one home communications appliance.

The acquisition of Five9 — which has amassed over 2,000 customers worldwide including Citrix and Under Armour and processes over 7 billion minutes of calls annually — will help Zoom enter the “$24 billion” market for contact centers, the company said.

“We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers,” said Eric S. Yuan, founder and chief executive of Zoom, in a statement.

Joining forces will offer both firms “significant” cross-selling opportunities in each other’s respective customer bases, the two firms said.

“Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers,” said Rowan Trollope, chief executive of Five9.

“It has always been Five9’s mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way. Joining forces with Zoom will provide Five9’s business customers access to best-of-breed solutions, particularly Zoom Phone, that will enable them to realize more value and deliver real results for their business. This, combined with Zoom’s ‘ease-of use’ philosophy and broad communication portfolio, will truly enable customers to engage via their preferred channel of choice.”

The two firms will do a joint Zoom call Monday to share more about the transaction.


By Manish Singh

PingPong is a video chat app for product teams working across multiple time zones

From the earliest days of the pandemic, it was no secret that video chat was about to become a very hot space.

Over the past several months investors have bankrolled a handful of video startups with specific niches, ranging from always-on office surveillance to platforms that encouraged plenty of mini calls to avoid the need for more lengthy team-wide meetings. As the pandemic wanes and plenty of startups begin to look towards hybrid office models, there are others who have decided to lean into embracing a fully remote workforce, a strategy that may require new tools.

PingPong, a recent launch from Y Combinator’s latest batch, is building an asynchronous video chat app for the workplace. We selected PingPong as one of our favorite startups that debuted last week.

The company’s central sell is that for remote teams, there needs to be a better alternative to Slack or email for catching up with co-workers across time zones. While Zoom calls might be able to convey a company’s culture better than a post in a company-wide Slack channel, for fully remote teams operating on different continents, scheduling a company-wide meeting is often a non-starter.

PingPong is selling its service as an addendum to Slack that helps remote product teams collaborate and convey what they’re working on. Users can capture a short video of themselves and share their screen in lieu of a standup presentation and then they can get caught up on each other’s progress on their own time. PingPong’s hope is that users find more value in brainstorming, conducting design reviews, reporting bugs and more inside while using asynchronous video than they would with text.

“We have a lot to do before we can replace Slack, so right now we kind of emphasize playing nice with Slack,” PingPong CEO Jeff Whitlock tells TechCrunch. “Our longer term vision is that what young people are doing in their consumer lives, they bring into the enterprise when they graduate into the workforce. You and I were using Instant Messenger all the time in the early 2000s and then we got to the workplace, that was the opportunity for Slack… We believe in the next five or so years, something that’s a richer, more asynchronous video-based Slack alternative will have a lot more interest.”

Building a chat app specifically designed for remote product teams operating in multiple time zones is a tight niche for now, but Whitlock believes that this will become a more common problem as companies embrace the benefits of remote teams post-pandemic. PingPong costs $100 per user per year.


By Lucas Matney

Salesforce updates includes sales info overlay for Zoom meetings

The pandemic has clearly had an impact on the way we work, and this is especially true for salespeople. Salesforce introduced a number updates to Sales Cloud this morning including Salesforce Meetings, a smart overlay for Zoom meetings that gives information and advice to the sales team as they interact with potential customers in online meetings.

Bill Patterson, EVP and General Manager of CRM applications at Salesforce says that the company wanted to help sales teams manage these types of interactions better and take advantage of the fact they are digital.

“There’s a broad recognition, not just from Salesforce, but really from every sales organization that selling is forever changed, and I think that there’s been a broad understanding, and maybe a surprise in learning how effective we can be in the from anywhere kind of times, whether that’s in office or not in office or whatever,” Patterson explained.

Salesforce Meetings gives that overlay of information, whether it’s advice to slow down the pace of your speech or information about the person speaking. It can also compile action items and present a To Do list to participants at the end of each meeting to make sure that tasks don’t fall through the cracks.

This is made possible in part through the Einstein intelligence layer that is built across the entire Salesforce platform. In this case, it takes advantage of a new tool called Einstein Intelligent Insights, which the company is also exposing as a feature for developers to build their own solutions using this tool.

For sales people who might find the tool a bit too invasive, you can dial the confidence level of the information up or down on an individual basis, so that you can get a lot of information or a little depending on your needs.

For now, it works with Zoom and the company has been working closely with the Zoom development team to provide the API and SDK tooling it needs to pull something like this off, according to Patterson. He notes that plans are in the works to make it compatible with WebEx and Microsoft Teams in the future.

While the idea was in the works prior to the pandemic, COVID created a sense of urgency for this kind of feature, as well as other features announced today like Pipeline Inspection, which uses AI to analyze the sales pipeline. It searches for changes to deals over time with the goal of finding the ones that could benefit most from coaching or managerial support to get them over the finish line.

Brent Leary, founder and principal analyst at CRM Essentials says that this ability to capture information in online meetings is changing the way we think about CRM.

“The thing the caught my attention is how tightly integrated video meetings/collaboration is now into sales process. This is really compelling because meeting interactions that may not find their way into the CRM system are now automatically captured,” Leary told me.

Salesforce Meetings is available today, while Pipeline Inspection is expected to be available this summer.


By Ron Miller

Will Zoom Apps be the next hot startup platform?

When Zoom announced Zapps last month — the name has since been wisely changed to Zoom Apps — VC Twitter immediately began speculating that Zoom could make the leap from successful video conferencing service to becoming a launching pad for startup innovation. It certainly caught the attention of former TechCrunch writer and current investor at Signal Fire Josh Constine, who tweeted that “Zoom’s new ‘Zapps’ app platform will crush or king-make lots of startups.”

As Zoom usage exploded during the pandemic and it became a key tool for business and education, the idea of using a video conferencing platform to build a set of adjacent tooling makes a lot of sense. While the pandemic will come to an end, we have learned enough about remote work that the need for tools like Zoom will remain long after we get the all-clear to return to schools and offices.

We are already seeing promising startups like Mmhmm, Docket and ClassEdu built with Zoom in mind, and these companies are garnering investor attention. In fact, some investors believe Zoom could be the next great startup ecosystem.

Moving beyond video conferencing

Salesforce paved the way for Zoom more than a decade ago when it opened up its platform to developers and later launched the AppExchange as a distribution channel. Both were revolutionary ideas at the time. Today we are seeing Zoom building on that.

Jim Scheinman, founding managing partner at Maven Ventures and an early Zoom investor (who is credited with naming the company) says he always saw the service as potentially a platform play. “I’ve been saying publicly, before anyone realized it, that Zoom is the next great open platform on which to build billion-dollar businesses,” Scheinman told me.

He says he talked with Zoom leadership about opening up the platform to external developers several years ago before the IPO. It wasn’t really a priority at that point, but COVID-19 pushed the idea to the forefront. “Post-IPO and COVID, with the massive growth of Zoom on both the enterprise and consumer side, it became very clear that an app marketplace is now a critical growth area for Zoom, which creates a huge opportunity for nascent startups to scale,” he said.

Jason Green, founder and managing director at Emergence Capital (another early investor in Zoom and Salesforce) agreed: “Zoom believes that adding capabilities to the core Zoom platform to make it more functional for specific use cases is an opportunity to build an ecosystem of partners similar to what Salesforce did with AppExchange in the past.”

Building the platform

Before a platform can succeed with developers, it requires a critical mass of users, a bar that Zoom has clearly passed. It also needs a set of developer tools to connect to the various services on the platform. Then the substantial user base acts as a ready market for the startup. Finally, it requires a way to distribute those creations in a marketplace.

Zoom has been working on the developer components and brought in industry veteran Ross Mayfield, who has been part of two collaboration startups in his career, to run the developer program. He says that the Zoom Apps development toolset has been designed with flexibility to allow developers to build applications the way that they want.

For starters, Zoom has created WebViews, a way to embed functionality into an application like Zoom. To build WebViews in Zoom, the company created a JS Kit, which in combination with existing Zoom APIs enables developers to build functionality inside the Zoom experience. “So we’re giving developers a lot of flexibility in what experience they create with WebViews plus using our very rich set of API’s that are part of the existing platform and creating some new API’s to create the experience,” he said.


By Ron Miller

Daily Crunch: Zoom adds end-to-end encryption to free calls

Zoom adds a much-requested feature (but with a catch), TikTok partners with Shopify and Jack Dorsey lays out his argument for tomorrow’s Senate hearing. This is your Daily Crunch for October 27, 2020.

The big story: Zoom adds end-to-end encryption to free calls

Zoom was criticized earlier this year for saying it would only offer end-to-end encryption to paid users. Now it says free users will have the option as well, starting in Zoom 5.4.0 on both desktop and mobile.

There are, however, a few catches. If you use end-to-end encryption in a free meeting, features like cloud recording, live transcription and meeting reactions will not be available, nor will participants be able to join the call by phone.

In addition, you’ll need to provide a phone number and billing information. And you’ll need to use the Zoom app rather than joining a meeting via web browser.

The tech giants

TikTok partners with Shopify on social commerce — At launch, the agreement allows Shopify merchants to create, run and optimize their TikTok marketing campaigns directly from the Shopify dashboard.

How Jack Dorsey will defend Twitter in tomorrow’s Senate hearing on Section 230 — In his opening statement, the Twitter CEO calls Section 230 “the Internet’s most important law for free speech and safety” and focuses on the kind of cascading effects that could arise if tech’s key legal shield comes undone.

Microsoft stock flat despite better-than-expected earnings, strong Azure growth — In the three months ending September 30, Microsoft had revenues of $37.2 billion and per-share profit of $1.82.

Startups, funding and venture capital

Next-gen skincare, silk without spiders and pollution for lunch: Meet the biotech startups pitching at IndieBio’s Demo Day — Starting in 2015, IndieBio has provided resources to founders solving complex challenges with biotech, from fake meat to sustainability.

SpaceX launches Starlink app and provides pricing and service info to early beta testers — In terms of pricing, SpaceX says the cost for participants in this beta program will be $99 per month, plus a one-time cost of $499 for hardware.

SimilarWeb raises $120M for its AI-based market intelligence platform for sites and apps — The company will expand through acquisitions and its own R&D, with a focus on providing more analytics services to larger enterprises.

Advice and analysis from Extra Crunch

Five startup theses that will transform the 2020s — Danny Crichton lays out five clusters: wellness, climate, data society, creativity and fundamentals.

Ten favorite startups from Techstars’ October 2020 class — Ten favorites culled from the Atlanta, Los Angeles and New York City cohorts, as well as its accelerator with Western Union.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Hands-on: Sony’s DualSense PS5 controller could be a game changer — The question is whether developers will truly embrace the new haptics and audio features.

T-Mobile launches new TVision streaming bundles, pricing starts at $10 per month — The carrier is launching new skinny bundles of live TV and streaming services to compete with expensive cable subscriptions.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.


By Anthony Ha

Daily Crunch: Zoom launches its events marketplace

Zoom has a new marketplace and new integrations, Spotify gets a new format and we review Microsoft’s Surface Laptop Go. This is your Daily Crunch for October 14, 2020.

The big story: Zoom launches its events marketplace

Zoom’s new OnZoom marketplace allows anyone to host and sell tickets for virtual events. It’s also integrating the ability for nonprofits to accept donations.

The company made a couple other announcements at its Zoomtopia user conference. For one thing, it’s also integrating with a starting lineup of 35 third-party “Zapps,” allowing products like Asana and Dropbox to integrate directly into the Zoom experience.

In addition, Zoom said it will begin rolling out end-to-end encryption (a feature it’s been promising since acquiring Keybase in May) to users next week.

The tech giants

Spotify introduces a new music-and-spoken word format, open to all creators — The new format is designed to reproduce the radio-like experience of listening to a DJ talk about the music, and it also enables the creation of music-filled podcasts.

Microsoft reverse engineers a budget computer with the Surface Laptop Go — Brian Heater writes that the Laptop Go is a strange and sometimes successful mix of Surface design and budget decisions.

Google launches a suite of tech-powered tools for reporters, Journalist Studio — The suite includes a host of existing tools as well as two new products aimed at helping reporters search across large documents and visualizing data.

Startups, funding and venture capital

Getaround raises a $140M Series E amid rebound in short-distance travel — The rebound is real: I took my first Getaround this weekend.

Augury taps $55M for tech that predicts machine faults from vibration, sound and temperature — The startup works with large enterprises like Colgate and Heineken to maintain machines in their production and distribution lines.

Plenty has raised over $500M to grow fruits and veggies indoors — The funding was led by existing investor SoftBank Vision Fund and included the berry farming giant Driscoll’s.

Advice and analysis from Extra Crunch

What the iPhone 12 tells us about the state of the smartphone industry in 2020 — While the iPhone 12 was no doubt in development long before the current pandemic, the pandemic’s global shutdown has only exacerbated many existing problems for smartphone makers.

Databricks crossed $350M run rate in Q3, up from $200M one year ago — The data analytics company scaled rapidly to put itself on an obvious IPO path.

Dear Sophie: I came on a B-1 visa, then COVID-19 happened. How can I stay? — The latest advice from immigration lawyer Sophie Alcorn.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. And we’re having a fall sale!)

Everything else

NASA loads 14 companies with $370M for ‘tipping point’ technologies — NASA has announced more than a third of a billion dollars’ worth of “Tipping Point” contracts awarded to over a dozen companies pursuing potentially transformative space technologies.

Harley-Davidson should keep making e-motorcycles — That’s Jake Bright’s takeaway after three weeks with the LiveWire e-motorcycle.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.


By Anthony Ha

Zoom to start first phase of E2E encryption rollout next week

Zoom will begin rolling out end-to-end encryption to users of its videoconferencing platform from next week, it said today.

The platform, whose fortunes have been supercharged by the pandemic-driven boom in remote working and socializing this year, has been working on rebooting its battered reputation in the areas of security and privacy since April — after it was called out on misleading marketing claims of having E2E encryption (when it did not). E2E is now finally on its way though.

“We’re excited to announce that starting next week, Zoom’s end-to-end encryption (E2EE) offering will be available as a technical preview, which means we’re proactively soliciting feedback from users for the first 30 days,” it writes in a blog post. “Zoom users — free and paid — around the world can host up to 200 participants in an E2EE meeting on Zoom, providing increased privacy and security for your Zoom sessions.”

Zoom acquired Keybase in May, saying then that it was aiming to develop “the most broadly used enterprise end-to-end encryption offering”.

However, initially, CEO Eric Yuan said this level of encryption would be reserved for fee-paying users only. But after facing a storm of criticism the company enacted a swift U-turn — saying in June that all users would be provided with the highest level of security, regardless of whether they are paying to use its service or not.

Zoom confirmed today that Free/Basics users who want to get access to E2EE will need to participate in a one-time verification process — in which it will ask them to provide additional pieces of information, such as verifying a phone number via text message — saying it’s implementing this to try to reduce “mass creation of abusive accounts”.

“We are confident that by implementing risk-based authentication, in combination with our current mix of tools — including our work with human rights and children’s safety organizations and our users’ ability to lock down a meeting, report abuse, and a myriad of other features made available as part of our security icon — we can continue to enhance the safety of our users,” it writes.

Next week’s roll out of a technical preview is phase 1 of a four-stage process to bring E2E encryption to the platform.

This means there are some limitations — including on the features that are available in E2EE Zoom meetings (you won’t have access to join before host, cloud recording, streaming, live transcription, Breakout Rooms, polling, 1:1 private chat, and meeting reactions); and on the clients that can be used to join meetings (for phase 1 all E2EE meeting participants must join from the Zoom desktop client, mobile app, or Zoom Rooms). 

The next phase of the E2EE rollout — which will include “better identity management and E2EE SSO integration”, per Zoom’s blog — is “tentatively” slated for 2021.

From next week, customers wanting to check out the technical preview must enable E2EE meetings at the account level and opt-in to E2EE on a per-meeting basis.

All meeting participants must have the E2EE setting enabled in order to join an E2EE meeting. Hosts can enable the setting for E2EE at the account, group, and user level and can be locked at the account or group level, Zoom notes in an FAQ.

The AES 256-bit GCM encryption that’s being used is the same as Zoom currently uses but here combined with public key cryptography — which means the keys are generated locally, by the meeting host, before being distributed to participants, rather than Zoom’s cloud performing the key generating role.

“Zoom’s servers become oblivious relays and never see the encryption keys required to decrypt the meeting contents,” it explains of the E2EE implementation.

If you’re wondering how you can be sure you’ve joined an E2EE Zoom meeting a dark padlock will be displayed atop the green shield icon in the upper left corner of the meeting screen. (Zoom’s standard GCM encryption shows a checkmark here.)

Meeting participants will also see the meeting leader’s security code — which they can use to verify the connection is secure. “The host can read this code out loud, and all participants can check that their clients display the same code,” Zoom notes.


By Natasha Lomas

Oracle’s TikTok and Zoom deals won’t move cloud market share needle significantly

While the overall cloud infrastructure market is booming having reached $30 billion last quarter worldwide, Oracle is struggling with market share in the low single digits. It is hoping that the Zoom and TikTok deals can jump start those numbers, but trying to catch the market leaders Amazon, Microsoft and Google, never mind several other companies ahead of it, is going to take a lot more than a couple of brand name customers.

By now, you know Oracle and TikTok were joined together in unholy acquisition matrimony last month in the acquisition equivalent of a shotgun wedding. In spite of that, Oracle founder and chief technology officer Larry Ellison gushed in a September 19th press release about how TikTok had “chosen” his company’s cloud infrastructure service. The statement also indicated that this “choice” was influenced by Zoom’s decision to move some percentage of its workloads to Oracle’s infrastructure cloud earlier this year.

The mechanics of the TikTok deal aside, the question is how big an effect will these two customers have on the company’s overall cloud infrastructure market share. We asked a couple of firms who closely watches all things cloud.

John Dinsdale, chief analyst at Synergy Research Group, wasn’t terribly optimistic that they would have much material impact on moving the market share needle for the database giant. “Oracle’s cloud infrastructure services growth has been consistently below overall IaaS and PaaS market growth rates so its market share has [actually] been nudging downwards. Zoom may be a good win but it is unlikely to move the needle too much — and remember Zoom also buys cloud services from AWS,” Dinsdale told TechCrunch.

As for TikTok, Dinsdale like the rest of us wasn’t clear how that deal would ultimately play out, but he says even with both companies in the fold, it wasn’t going to shift market share as much as Oracle might hope. “Hypothetically, even if Zoom/TikTok helped Oracle increase its cloud infrastructure service revenues 50% over 12 months, which would be a real stretch, its market share would still be nearer to 2% than 3%. This compares with Google at 9%, Microsoft 18% and AWS 33%,” Dinsdale said.

He did point out that the company’s SaaS business is much stronger. “Broadening the scope a little to other cloud services, Oracle’s SaaS growth is running roughly in line with overall market SaaS market growth so market share is steady. Oracle’s share of the total enterprise SaaS market is running at around 6%, though if you drill down to the ERP segment it is obviously doing much better than that,” he said.

Canalys, another firm that follows the cloud infrastructure market says their numbers tell a similar story for Oracle. While it’s doing well in Saas with 7.8% market share, it’s struggling in IaaS/PaaS.

“For IaaS/PaaS, Oracle Cloud is at 1.9% for Q2 2020 and that isn’t moving much. The top 3 providers are AWS, Azure and Google Cloud, who have 30.8%, 20.2% and 6.2% respectively,” Blake Murray from Canalys told TechCrunch.

It’s worth keeping in mind that Google hired Diane Greene five years ago with the hope of accelerating its cloud infrastructure business. Former Oracle exec Thomas Kurian replaced her two years ago and the company’s market share still hasn’t reached double digits in spite of a period of big overall market growth, showing how much of a challenge it is to move the needle in a significant way.

Another big company, IBM bought Red Hat two years ago for $34 billion with an eye towards improving its cloud business, and while Red Hat has continued to do well, It does not seem to have much impact on the company’s overall cloud infrastructure market share, which has been superseded by Alibaba in fourth place, according to Synergy’s numbers. Both companies are in the single digits.

Synergy Research Q2 2020 cloud infrastructure market share graphs

Image Credits: Synergy Research

All that means, even with these two clients, the company still has a long way to go to be relevant in the cloud infrastructure arena in the near term. What’s unknown is if this new business will help act as lures for other new business over time, but for now it’s going to take a lot more than a couple of good deals to be relevant — and as Google and IBM have demonstrated, it’s extremely challenging to gain chunks of market share.


By Ron Miller

Meet the anti-antitrust startup club

When Congress called in tech CEOs to testify a few weeks ago, it felt like a defining moment. Hundreds of startups have become unicorns, with the largest worth more than $1 trillion (or perhaps $2 trillion). Indeed, modern tech companies have become so entrenched, Facebook is the only one of the Big Five American tech shops worth less than 13 figures.

The titanic valuations of many companies are predicated on current performance, cash on hand and lofty expectations for future growth. The pandemic has done little to stem Big Tech’s forward march and many startups have seen growth rates accelerate as other sectors rushed to support a suddenly remote workforce.

But inside tech’s current moment in the sun is a concern that Congress worked to highlight: are these firms behaving anti-competitively?

By now you’ve heard the arguments concerning why Big Tech may be too big, but there’s a neat second story that we, the Equity crew, have been chatting about: some startups are racing into the big kill zone.

They have to be a bit foolhardy to take on Google Gmail and Search, Amazon’s e-commerce platform or Apple’s App Store. Yet, there are startups targeting all of these categories and more, some flush with VC funding from investors who are eager to take a swing at tech’s biggest players

If the little companies manage to carve material market share for themselves, arguments that Big Tech was just too big to kill — let alone fail — will dissolve. But today, their incumbency is a reality and these startups are merely bold.

Still, when we look at the work being done, there are enough companies staring down the most valuable companies in American history (on an unadjusted basis) that we had to shout them out. Say hello to the “anti-antitrust club.”

Hey and Superhuman are coming after Gmail

Gmail has been the undisputed leader in consumer email for years (if not enterprise email, where Microsoft has massive inroads due to Exchange and Outlook). Startups have contested that market, including Mailbox, which sold to Dropbox for about $100 million back in 2013, but whenever a new feature came along that might entice users, Gmail managed to suck it up into its app.


By Natasha Mascarenhas

Zoom UX teardown: 5 fails and how to fix them

Valued at over $60 billion and used by millions each day for work and staying in touch with friends and family, the COVID-19 pandemic has helped make Zoom one of the most popular and relevant enterprise applications.

On one level, its surge to the top can be summed up in three words: “It just works.” However, that doesn’t mean Zoom’s user experience is perfect — in fact, far from it.

With the help of Built for Mars founder and UX expert Peter Ramsey, we dive deeper into the user experience of Zoom on Mac, highlighting five UX fails and how to fix them. More broadly, we discuss how to design for “empty states,” why asking “copy to clipboard” requests are problematic and other issues.

Always point to the next action

This is an incredibly simple rule, yet you’d be surprised how often software and websites leave users scratching their heads trying to figure what they’re expected to do next. Clear signposting and contextual user prompts are key.

The fail: In Zoom, as soon as you create a meeting, you’re sat in an empty meeting room on your own. This sucks, because obviously you want to invite people in. Otherwise, why are you using Zoom? Another problem here is that the next action is hidden in a busy menu with other actions you probably never or rarely use.

The fix: Once you’ve created a meeting (not joined, but created), Zoom should prompt and signpost you how to add people. Sure, have a skip option. But it needs some way of saying “Okay, do this next.”

Steve O’Hear: Not pointing to the next action seems to be quite a common fail, why do you think this is? If I had to guess, product developers become too close to a product and develop a mindset that assumes too much prior knowledge and where the obvious blurs with the nonobvious?


By Steve O’Hear

Emergence’s Jason Green thinks some of the tech backlash is justified, but the B2B opportunities still outweigh the challenges

Jason Green, co-founder and partner at Emergence, is one of the leading VCs investing in enterprise startups at the moment. But even with the focus on B2B, many of their companies have become household names — Zoom, Yammer, Box and Salesforce among them.

Now, we’re all living in a climate where everything has been turned upside down. Meetings are virtual, the future economy and collective health of the world are unknowns, and being an investor — or a founder — comes with completely new parameters and rules of engagement.

We sat down with Green for an enlightening hour to talk about the challenges of all that, plus making deals, running a business, and suddenly finding your quiet, B2B name being turned into a verb. It was an interesting conversation, worth a read for enterprise startups and investors, but — similar to how B2B can spill into consumer — equally insightful for many more.

Extra Crunch Live is our new virtual speaker series for Extra Crunch members. Folks can ask their own questions live during the chat, with guests that include Aileen Lee, Kirsten Green, Mark Cuban and many, many more. You can check out the schedule here.

Below, you’ll find a lightly edited transcript of our recent chat with Green.

How is sourcing impacted in the current climate?

Sourcing is not much different. We follow the same due diligence process, so when we make an investment, the whole team basically dives in and does due diligence. So we make manager references and customer calls and spend time with each of the management team having one-on-ones. In some ways, it was better. First of all, we could very easily do breakout rooms with each of the individual management team members and then come back. So there was this dynamism to the meeting that we hadn’t had before. We were able to basically record it and share it with folks that couldn’t participate. So all of us had all the information when we were making the decision together. That was pretty special, actually. So it took a little bit longer, it probably took about 50% longer than we would have done otherwise. But I think actually, now knowing what we’ve done, we could probably compress it back to our normal timeframe. So I think in a lot of ways, we’ve learned like a lot of folks that we can do things remotely that we probably didn’t think were possible before. Hopefully, we’ll see how the investment turns out, but we’re super excited about it.

Are you considering more startups outside the Valley, and how are they viewing their own place outside the Valley?


By Ingrid Lunden