If you had not used Zoom's video conferencing platform pre-COVID-19, chances are very good that you have by now. Zoom single handedly raised the video-as-a-service (VaaS) sector in the first quarter due to social distancing measures during the coronavirus pandemic.
According to a report by Synergy Research Group, the VaaS segment increased by 80% in Q1 thanks to Zoom. Zoom's first quarter market share was almost 10 times the size of its nearest competitor. Despite technology glitches related to a lack of security, which led to "Zoombombing" by uninvited participants on Zoom video sessions, Zoom grew by 148% in the first quarter, according to Synergy Research Group (SRG.)
Overall, the first quarter market for conferencing software-as-a-service (SaaS) grew by 17% year-over-year with overall growth reaching over $800 million. The SaaS growth was driven by Zoom while other major vendors saw their revenues remain flat or down in the quarter.
SRG divides the conferencing market into two buckets. The larger segment, which was down 1% year-over-year, was led by Cisco, LogMein and Microsoft. Cisco is the top vendor in the SaaS conferencing rankings.
On the other hand, the smaller VaaS segment exploded by 80% in the first quarter thanks to Zoom.
Prior to the coronavirus pandemic, the VaaS share of the conferencing SaaS market had been growing steadily from 15% at the end of 2017 to 20% at the end of 2018. In the fourth quarter of last year it grew 27%. In the recent first quarter, VaaS's share of the market jumped another seven percentage points.
With shelter-in-place policies starting to lift, it remains to be seen how many employees will return to their office spaces, but it seems to be a good bet that up to 50% could initially stay in their home offices and use video conferencing platforms for their meetings.
Over the next five years SRG’s forecast shows VaaS continuing to take an ever-greater share of the total market.
“The market was already heading in a direction that was favorable to VaaS generally and to Zoom specifically, but the impact of COVID-19 has turbo-charged that trend,” said Jeremy Duke, Synergy Research Group’s founder and chief analyst, in a statement. “Previously VaaS was starting to gain traction in the mid-market and with large enterprises, helping to expand the overall market opportunity.
"Now, we are suddenly seeing VaaS usage blossoming across the board. We expect to see those gains continue long after the effects of the pandemic have diminished.”