Since the onset of the pandemic, the adoption of remote communication tools has skyrocketed. Yet even before COVID-19 reared its ugly head, the video conferencing market was gaining steam. It's now expected to climb to $50 billion by 2026, according to a recent report by Global Market Insights. 

Three of the biggest players in the virtual meeting space, Zoom Video Communications (NASDAQ:ZM), Slack Technologies (NYSE:WORK), and Microsoft (NASDAQ:MSFT) Teams, all had big product announcements this week. The timing of these updates indicates the intensity of the competition between these leading virtual meeting providers.

A man sitting at a desk participating in a video conference on his computer with 12 other participants.

Image source: Zoom Video Communications.

Zooming ahead

Zoom announced yesterday the launch of Zoom Hardware as a Service (HaaS). The offering will make accessing Zoom Rooms and Zoom Phone easier by providing subscription options for phone and meeting room hardware to complement its Zoom videoconferencing services

The company said that the service will provide budget-friendly hardware and simple technology upgrades at an affordable, fixed monthly price. Zoom highlighted some of the benefits of its service, including low upfront costs and predictable monthly outlays, a simple and streamlined purchasing experience with a consolidated monthly invoice, and the ability to scale with growth. Zoom will also offer managed support options.

By providing easy access to the hardware and an integrated solution, Zoom is removing a friction point, thereby increasing the chances a company will choose its videoconferencing solution over that of a competitor.

Early last month, Zoom reported robust first-quarter earnings. Revenue climbed 169% year over year, while the number of customers contributing $100,000 in trailing-12-month revenue vaulted 90% higher. At the same time, the number of customers with more than 10 employees soared 354%. 

A screenshot of Slack's channel-based messaging tool.

Image source: Slack.

Not a Slacker in sight

For the seventh time in its 11-year history, Slack has made an acquisition to boost the utility of its channel-based messaging platform. The company announced Wednesday that it had acquired Rimeto for an undisclosed sum. Rimeto developed a cutting-edge searchable business directory that integrates data from across a company, providing a wealth of information about every employee.

These worker profiles fit naturally into Slack's enhanced business communication tool, providing additional information that will make an enterprise directory more informative and useful. As my colleague Evan Niu wrote, "Rimeto believes that including more data in the directory can facilitate greater collaboration by strengthening social connections, particularly in remote-work environments."

One of the biggest advantages to Rimeto's directory is its robust search capability, which allows you to search by name, title, sales region, or even by customer.

Early last month, Slack reported record first-quarter results, with revenue that grew 50% year over year. Its customer data was also eye-opening. Paid customers grew 28% and those contributing $100,000 in trailing-12-month revenue grew 49%. Its net dollar retention rate was 132%, showing that existing customers are spending 32% more this year compared to last. 

Images of a large number of people superimposed over an auditorium seating view in Team.

Image source: Microsoft.

Teams got a face lift

Microsoft announced on Wednesday that it would be adding new features to its Teams business collaboration software. These upgrades are designed to help people feel more connected and engaged while reducing "meeting fatigue." 

The most prominent new feature is Together mode, which uses artificial intelligence (AI) to place meeting participants in a digitally shared background to better simulate an in-person meeting. The first mode -- auditorium view -- is rolling out now and will be generally available in August. Together mode will be adding more views in the future.

Dynamic view gives the user more control over how things are shared on the screen. The feature also uses AI and offers the ability to feature shared content side-by-side along with meeting participants. It will also offer large gallery view, which can include up to 49 people in the same meeting simultaneously, while also offering virtual break-out rooms, allowing large meetings to break up into smaller groups.

There are also a host of smaller additions and improvements, including video filters to subtly adjust lighting and focus, speaker attribution, advanced chat features, and the ability to react to people or presentations with emoji.

Teams is a small but growing part of Microsoft's business. The company revealed in April that Teams had grown to 75 million daily active users, and that the number of organizations integrating their third-party and business apps with Teams had tripled over the previous two months. Microsoft said that 20 organizations with more than 100,000 employees are now using Teams. 

Investor takeaway

The biggest takeaway from these three announcements is that none of these companies are resting on their laurels. The battle for virtual meeting supremacy has yet to be decided. Each provider has different technological advantages and disadvantages, and none holds a trump card. 

One thing is for sure: The recent spike in COVID-19 cases in the U.S. clearly illustrates that remote work and virtual meetings aren't going anywhere. Zoom, Slack, and Microsoft are battling it out for their piece of this large and growing market.