Zoom comes to our mind when we talk about online video conferencing. Zoom plays a significant role in our academic and professional lives due to its conference meeting services. Our focus would be to analyze the business aspect of the platform in the form of pestle analysis.
Zoom is a communication US tech company, and the headquarters of the video conferencing platform is in San Jose California, USA. The cloud-based online platform provides the services of allowing people to call, attend, and organize video meetings for various purposes.
The recent wave of a pandemic caused lockdown and shutdown of businesses, and Zoom gave people a choice to conduct all their professional and academic activities online in the midst of a crisis. Eric Yuan made the official inauguration of the Zoom in 2013, but he started working on it in 2011.
The chairman and CEO of the video conferencing platform are Eric Yuan. Some of the main services of the brand are business telephone systems, online chat, and video telephony. The company has employed more than 6269 employees to manage its tech operations.
Today, we’ll discuss pestle analysis of Zoom video communication. It’s going to analyze the political, economic, social, technological, legal, and environmental factors.
Here’s the pestle analysis of Zoom as follows;
Table of Contents
Political Factors
R & D in China
The political environment of a country could be a deal maker or deal-breaker depending on its policies. Research and development play a significant role for a tech company in order to gain a competitive edge in the market. Zoom has established various R & D facilities in various countries across the world, and the largest facility is in China that develops Software.
We all are aware of the conflict and tension between the Chinese regime and the US government. In the case of the video communication platform, the pandemic and political conflict didn’t come in the way of the company’s growth and progress.
Encryption & Decryption
Many people claim that a Chinese-based server could decrypt the encrypted messages and communication of the platform. They further say that it’s mandatory for the company to send all the communication data to the communist Chinese government. Although the company has never formally issued any type of explanatory statement against such claims; the company has accepted the fact that it has one data compilation center in China.
Rumors of Breach
There were some rumors that the company had a data breach of very sensitive information at the government level. The company received FedRAMP authorization from GSA in 2019. Basically, it was proof that the company integrates a set of security requirements while rendering the video conference software for the government.
Some tech experts say that it’s the era of “zoomatisation” after the pandemic because the application and software are the need of many people worldwide. It’s not dangerous for any department in terms of security.
Economical Factors
Growth in Pandemic
According to Yelp, the pandemic crisis was a major blow to the growth of businesses and shut down approximately 60% of the business worldwide. Zoom offered a unique solution to the business and people to collaborate with each other while keeping the social distance. Most importantly, it allowed people to continue their education and office work online at home. The biggest edge the company has is to provide the free 40 minutes video conference.
Market Valuation
According to an estimate, the profitability and growth of the online video streaming platform have amplified by 354% in the first quarter of 2020. However, the overall annual revenue of the company has increased by 164%. It became the fastest-growing application in 2020, and the company has achieved a brand valuation of 100 billion dollars.
Social Factors
Push on Social Media
The pandemic crisis has made it possible for Zoom to become a part of the socio-cultural environment of various societies across the world. The main reason behind such a tremendous growth of the platform is the lockdown and social distancing protocol that made it necessary for people to use other applications parallel to the social media platforms.
Zoom has tried to minimize and blur the line created by lockdown, social distancing, and shutdown of businesses. It allowed them to establish a balance of social distance and doing the work from home.
Online Survey
Zoom conducted an online survey and asked its users about the significance of its online platform in their lives. The result of the survey showed that people are now acknowledging the fact that the online mode of communication and work would stay in their lives. However, virtual working and virtual business is the new way of working and communicating.
Limited Mobility
There’s a growing concern regarding online working and doing work from home is that it has limited your body movement. You have to focus on the screen and stare at it continuously while having an online meeting or watching the lecture. It’s not good for your eyesight and health.
Lack of Non-Verbal Communication
Online communication allows you to talk and discuss things verbally. What this mode doesn’t have is the development of non-verbal cues. When you have an in-person meeting with someone, then you use and share your body language and gesture to communicate. It polishes your non-verbal communication and makes you keen observant.
Technological Factors
Service Translation
Technology has made it possible for Zoom to offer video communication services. Speaking of communication, the platform offers the service of translation. The company bought this machine translation technology from a German start-up. It would allow the company to offer various translation services in order to improve the customer experience.
Auto Captioning
Zoom used to offer the auto-captioning option to its premium and paid users. Now, the platform has extended its offer to all users. However, the company made a name for itself in the nick of time when they needed an alternative option, and Zoom offered it.
Collaboration with MS Team
There are rumors that Cisco, Microsoft Teams, and Zoom are planning to join hands and launch an interconnected platform that doesn’t require the assistance of any third party. It means you can log in to one platform and use all three of them. It would be a revolutionary step in the online-work field.
Legal Factors
Hacking
Zoom is not a secure platform and it caused the platform to deal with legal issues different across the world. Hackers could easily gain access to private meetings including the government and highly official ones. If the meeting is public, then no one cares; if it’s personal and private, then it’s not good for the company’s reputation.
Zoom received a lot of criticisms from the tech experts that the company didn’t hide the password while typing it on the screen. The company should work on its weaknesses and make the platform more secure.
Lawsuit
There are many lawsuits that the company has faced regarding the sale of private information of its users without their consent. A study has shown that private users are more at risk than others. The sold information is more than sufficient for hackers to hack into any platform without any invitation. According to an estimate, the company is facing lawsuits of 85 million dollars regarding its poor security system. You can say that the company spends 15% of users’ charges on the lawsuits.
Framework for Legal Cases
Some experts are raising the question that the courts and other legal proceedings could use Zoom’s recordings or not as evidence. Whether it’s permissible or not. Therefore, the company should develop a legal framework about the ethic and code of conduct of its recording that how courts should gather the information while solving the legal cases.
Environmental Factors
No Waste
Zoom is a tech company and it doesn’t involve industrial operations like production and manufacturing, so it doesn’t cause industrial waste like manufacturing industries. But it causes other types of environmental pollution like the storage of data over the internet and its transmission is dangerous to the environment.
According to an estimate, approximately 2.12 liter of water and the size of an iPad is required and consumed for one hour of the video conference. The carbon dioxide emission rate is roundabout 150-1000 gm, and you can lower its impact if you’re closer to the camera. Therefore, you should shut off the camera if you don’t need it. You can save the environment this way.
If you compare Zoom with flying and traveling to other countries, then it is a much better and safer mode of work and communication. It helps you to reduce the carbon emission rate to a great extent.
Conclusion
After a careful study of pestle analysis of Zoom, we’ve realized that Zoom is a very effective tool for video conferencing and doing work from home. Various external environmental factors are impacting its growth and profitability, and the company should learn to avoid them and make its way through them.
