Zoom Video Communications (ZM -0.68%) got a lot of attention in 2021 with its failed attempt to acquire Five9 (FIVN -0.17%), but a couple of its successful takeovers have been largely ignored. The latest, involving assets that help with hybrid event solutions, was announced just days before the start of the new year. It's a significant indicator of where the post-pandemic world could be headed, and it bodes well for Zoom's evolution into a more full-featured collaboration and work tool.
Taking events to the web
The second year of the pandemic has seen a slow loosening of many restrictions, but some of the activities people got into the habit of doing during early lockdowns have stuck. For example, many business meetings and events have yet to return to a regular in-person format. Given the efficiency of conducting many of these virtually (no travel, no large-space rent and maintenance, etc.), chances are that videoconferencing-based communications will remain part of the picture going forward.
Zoom is betting on virtual and hybrid events too, but it knows that improving functionality and experience are key to making them work long term. To that end, the company announced in late December that it acquired assets from a small start-up called Liminal.
Liminal provides production solutions for online programs and performances and has built many of its solutions using Zoom's software. Specifically, Zoom thinks the acquisition can help meet the needs of theaters, broadcast studios, and other purveyors of video content.
Fixing the language barrier in real-time
Since we're on the topic of acquisitions, it's worth pointing out the other tiny takeover Zoom made in 2021. Over the summer, the company said it was purchasing a German start-up called Kites. The outfit develops AI-powered real-time machine translation services. Given the barriers people speaking different languages present, a communications service that can break down these walls would be incredibly beneficial for many businesses and organizations.
Just a few months after announcing the purchase, Zoom announced at its annual Zoomtopia conference it was launching live transcription and translation to video calls. No doubt Kites had something to do with this, and the addition of new language support and improved features will likely be forthcoming in the years ahead.
Zoom, the hybrid event curator
What do these two small acquisitions mean to Zoom shareholders? In the early days of the pandemic, Zoom was a tool used by millions of households around the globe, but that tsunami of individual users is now abating.
It's a completely different story for businesses, though. In fact, while Zoom's overall growth has slowed significantly because of individual and small-business subscribers moving back to in-person meetings, organizations with at least 10 employees are still ramping up their spending on Zoom software.
Zoom's focus on solutions for hybrid events and other features for larger organizations makes sense. The business world has changed, and virtual meetings are here to stay. In fact, in many regards, technology has made many of these meetings more productive and efficient than ever. If Zoom wants to keep growing, this is where it needs to keep its focus.
The attempted Five9 merger was a further indication of this need to focus on larger customers (since Five9 is a leader in cloud-based contact center solutions for large enterprises), although Zoom quickly pivoted and announced its own organically grown contact center solution shortly before giving up on the Five9 takeover. But paired with the recent purchase of the Liminal assets, as well as Kites earlier in the year, it's clear Zoom sees virtual and hybrid events as an important growth driver for its big business customers going forward.
Whether or not we like virtual events, they're efficient to operate. Don't write off this technology for Zoom as it improves upon its video communications capabilities for businesses.