Zoom, Microsoft, Google, Cisco, Pexip, Houseparty, and Facebook: With Summer Fast Approaching, the Video Conferencing War Begins to Heat up

The News: One of the more interesting bits of news to bubble up from Microsoft’s (NASDAQ: MSFT) FY20 Q3 earnings call a couple of weeks ago is that usage of Microsoft Teams — the company’s UC and collaboration platform — had increased roughly 70% in April alone, reportedly reaching 75 million daily active users. Microsoft CEO Satya Nadella also noted during the call that the company had seen as many as 200 million meeting participants in a single day during the month of April.

It’s important to note here the difference between an active user (DAU) and a daily meeting participant (DMP): An daily active user is counted only once per day, regardless of how many times he or she participates in a meeting. A daily meeting participant, however, is anyone who participates in a meeting, meaning that if one active user participates in seven meetings in a day, that user will be counted as a meeting participant seven times. In this scenario, a single daily active user would count as seven daily meeting participants.

Microsoft, Zoom, Cisco, Google, Pexip, Houseparty, and Facebook: With Summer Fast Approaching, the Video Conferencing War Begins to Heat up

Analyst Take: The distinction between daily active users (DAU) and daily meeting participants (DMP) is hardly trivial. As we explore Zoom, Microsoft, Cisco, Google and others making serious inroads in the video conferencing and collaboration arena, this distinction becomes even more important. Zoom, whose video conferencing product competes against Microsoft Teams, mistakenly reported last month that its platform had grown to 300 million daily active users. The number actually referred to daily meeting participants, and the company promptly corrected its wording as soon as the error was discovered.

While some may argue the virtues of using DAU rather than DMP to gauge true user growth, using DMP as a benchmark isn’t a bad way of eyeballing competing video conferencing platforms’ overall popularity and usage.

The Major Players in the Video Conferencing Platform Ring Right Now

Microsoft, Zoom, Cisco and Google are the heavyweights here, but they’ve got competition. Here are some key insights to help you gauge how the 2020-2021 video conferencing platform wars are shaping up already:

• ZOOM’s early start keeps it in the lead, at least for now. Despite Zoom’s security issues, its 300 million daily meeting participants still give it a noticeable advantage over Microsoft Teams for the time being.
• But Microsoft Teams is catching up, and here’s how. Having said that, Microsoft Teams’ 200 million daily meeting participants should make Zoom nervous, especially considering that Microsoft Office 365 (now officially a part of Microsoft 365), which includes access to Microsoft Teams, could help accelerate discovery and adoption of Teams’ videoconferencing tool across its install base of 258 million paying users. This is in addition to Skype’s 40 million daily users (Skype is owned by Microsoft), although that figure is difficult to convert into daily meeting participants without more information from Microsoft. Still though, Microsoft’s video conferencing market grab comes pre-loaded, and the company has both the talent and the cash to take make the most of that tactical advantage.
• Google is in the ring too. Google Meet, for its part, slides into third place with 100 million daily meeting participants, and an average of 3 million new users jumping on every day. The service could also see a boost in adoption over the summer now that Google has made Google Meet free to anyone with a Google account.
• Don’t discount Cisco just because it is operating in quasi-stealth mode. Cisco has not yet shared its daily meeting participants numbers, but with roughly 300 million Webex users in its ecosystem, that number should put the company in the vicinity of 100-million daily meeting participants as well, and could help fuel its growth into the fall. The company is also well-regarded from a security standpoint, which our research indicates ranks very high on the list of top concerns of senior leaders charged with making purchase decisions.
• Other players to watch: Also pay attention to Pexip, Houseparty, and Facebook’s newly released Rooms, which could very well scale over the course of the next 12-18 months, and give some of the above video conferencing products a run for their money.

What’s Ahead

In closing, Microsoft seems extremely well-positioned to catch up to Zoom by year’s end, especially if Zoom cannot restore trust in its security flaws quickly enough to regain the full measure of its momentum.

Cisco, for its part, has an opportunity to show the market either how quickly it can react to the democratization of video conferencing, or how quickly it can out-innovate its fast-growing crop of competitors. Cisco also has some work to do in the brand recognition market as it relates to collaboration platform expertise, and the company would do well to address that. In this kind of fast-moving market, what incumbents the category leaders need to keep in mind is that while reputation is a foundation you build on, relevance is earned anew every single day. People are fickle when it comes to technology, and Cisco’s marketing and communications teams may have to sprinkle a bit of CPG and tech startup spice into their formula if they mean to compete against most nimble and aggressive competitors.

As the video conferencing ecosystem grows and transforms over the course of the next year, and hot new entrants like Pexip begin to come to IT decision-makers with more flexibility than they are accustomed to, we could be looking at a far more even competitive field this time next year. This is particularly true in terms of security features, number of participants per meeting, and additional features that would expand meeting capabilities to address entirely new use cases.

Whatever the case may be, more options equal more competition, and more competition means more effort by developers to improve their products. And so, even in difficult times such as these, one positive outcome of social distancing and lockdowns is that it’s inevitable that video conferencing apps are about to become even better and more secure than they already are, proving yet again that every dark cloud really does have silver linings.

To be continued. 

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.

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The original version of this article was first published on Futurum Research.