In just four months, DAU (number of active daily users) from 10 million to 300 million, the eye-catching growth of all Internet companies, fell to the video conferencing company Zoom. The Nasdaq-listed Company, which is listed on nasdaq in 2019, has soared since its inception in 2011, reaching a $1 billion valuation in just seven years. The shining performance of the epidemic made the industry seem to see another rising giant.
Produced by WindEye In-depth Reporting Group Phoenix Net Technology Phoenix News Client
Editing by Li Wei
However, the upward momentum did not last long, starting in April. There have been a number of information breaches of Zoom users in overseas markets, with countries and regions such as Germany, Singapore and Taiwan, as well as the US Senate, NASA, Google, SpaceX, Siemens and Standard Chartered, all of which have begun to ban or restrict the use of Zoom and turn to its competitors for services.
On one side is sustained rapid growth, on the other side is a looming crisis, the zoom on the tip of the wind seems to be in the middle of ice fire.
Internal and external problems
Since February 3 this year, the telecommuting market caused by the outbreak has sent Zoom shares soaring. After four months of hovering below $80, Zoom’s share price doubled in value to $164.94 (March 23) after a month and a half. Even in mid-March, when the U.S. stock made history with four fuses in 10 days, Zoom was a little green in the red.
As the epidemic spread globally, the accident became the east wind of Zoom. It’s just that the wind is too strong, and it’s also a hidden danger that Zoom has been overlooked in the past.
On March 24, When Consumer Reports published an article saying that the Zoom meeting was not private and that the moderators could disclose the contents of the meeting without the consent of the participants, Zoom’s share price fell 15.28 percent on the same day.
Since then, bad news has followed, with news emerging that Zoom sent users’ personal information to Facebook without user permission, video slots and microphones hijacked during the meeting, and that more than half a million Zoom accounts were traded on the dark web at cabbage prices. The negative news even led Toys’ original paying users, universities and educational institutions, to start disabling Zoom.
Overall, there are three main reasons for this Zoom security storm:
First, the account password is too simple, easy to be violent to try out the pure digital password;
Second, user data is disclosed through third-party SDKs without the user’s authorization, such as the iOS version of the Zoom app embedded in Facebook’s SDK;
Third, founder Yuan Zheng’s “Chinese-American” status has triggered some “conspiracy theories” that have led some users to question data security.
People are afraid of famous pigs afraid of fat. With Zoom’s daily live users soaring from 10 million at the end of 2019 to 300 million today, any problems with Zoom are placed under a magnifying glass.
The surge in the overall volume of the online conference market has also spurred a chase for existing and potential competitors at a time when security concerns are putting Zoom in the fore. For example, Yuan Zheng’s old owner, Cisco Webex Meeting, as well as Microsoft’s Teams and Skype, released a guarantee of product security when Zoom was caught up in a public ity.
Even giants like Facebook and Google are sniping at Zoom.
On April 23, Yuan Zheng announced that Zoom’s daily users had reached 300 million, boosting its share price from the opening of the day at $154.01 to a new high of $181.5 the next day, but then Facebook launched a similar feature, Messenger Rooms, which sent Zoom’s shares down to $158.8 at the close.
On April 29th Google said any user would soon be able to host a free video conference on Meet, which now has 100 million live users.
In the domestic market Zoom is not easy, encountered by the opponent is equally strong, Alibaba’s nails, Tencent meetings and other outbursts, compressed Zoom’s potential market.
In the long run, even if Zoom’s user base and revenue are growing, the future is not optimistic – facing increasing competition while product safety is being questioned. Zoom on the wind is in the midst of internal and external troubles.
Zoom is particularly nervous about security issues that have flared up since the end of March.
Zhang Xin is An employee of Zoom’s research and development center in Hefei, according to him, CEO Yuan Zheng has been in the company’s group to release a message, said the company is going through a very crisis, I hope you can do their job well, do not go wrong, and repeatedly stressed the need to improve security awareness.
“It’s been a time of stress and stress. What used to be slow work, now it has to speed up. Zhang Xin said, not only simply on the basis of the original upgrade optimization, but the entire underlying logic is making changes to strengthen data encryption and other functions. “These usually take 1 to 2 months to complete, and now the cycle is shortened to 1 to 2 weeks. “
On April 9th Mr Yuan, who has been low-key, made a Youtube live broadcast under pressure to apologise to users for the security breach and promised to fix the problem within 90 days.
He also talked about the establishment of a CISO Advisory and Advisory Board of industry security leaders on April 1, and invited Alex Stamos, a computer scientist at Stanford University, to assist with the platform security review.
It is understood that from April, Zoom in China’s research and development staff have stopped the previous research and development program, product feature updates, etc. , to solve security problems. For data center access points, account password leakage, third-party SDK three types of issues, Zoom also has a number of specific actions:
A zoom agent in China announced on April 17th that from April 18th, every paid Zoom customer would be able to opt in or out of a specific data center area.
In the case of account password leakage, Zoom changed the randomly generated meeting ID from 9 digits to 11 digits, and the administrator account can also configure more complex passwords, such as plus mother and special characters.
As for the third-party SDK, as early as March 27, Zoom removed the Facebook SDK from the iOS client and reconfigured it to prevent user information from being collected by third-party companies.
Just after Yuan’s apology, Zoom’s share price began to pick up. “When the security breach broke out, we were also very scared, ” Wang Wei, who works at the Suzhou research and development center, told Phoenix.com. But personally, in fact, a lot of security issues are not previously paid attention to, this is all video software companies will encounter problems. “
Wei Xiaoqiang, senior director of the 360-day think tank, told Phoenix.com That it was certainly important to “secure” the product by taking some basic security measures, but it was not enough.
Zoom incident reflects the security issue symgearing in the context of digital transformation, “This is an evolving network environment, whether it is network, device or cloud applications, network attacks are increasing, hacker attack methods are becoming more and more advanced, so simple security defense is also difficult to defend against new attacks.” Wei Xiaoqiang said.
At present, Zoom is located in Suzhou, Hangzhou, Hefei, respectively, more than 200 programmers, nearly a month, they are busy doing system self-testing and product safety function optimization related matters.
With Zoom’s popularity, wang said, many people are digging him up, including some big companies, who are planning to launch or expand video conferencing products.
How does Zoom win?
Zoom generally gives the impression of being “small and beautiful” and “very Buddhist”, but Zoom’s ambitions don’t stop there. Wang Wei told Phoenix Network Technology (WeChat Sogou: iFeng Technology) that Zoom is still in a big move, ready to be released in the second half of this year.
Mr Yuan has also told the media that he wants to connect the workplace with consumers, as Facebook did, which would make Zoom bigger than Cisco: “You’re only five miles ahead of me, that’s fine.” I’ll run faster than you, or I’ll catch up with you. It’s like a marathon. “
And this marathon about the video conferencing market, Yuan Zheng ran for 23 years. He immigrated to the United States in 1997 and joined WebEx, a conference software company, in 1997 and became a core engineer, and webEx was acquired by Cisco for $3 billion, and Yuan Zheng became Vice President of Cisco Engineering.
NetScreen, then the king, also sold for $4 billion and Skype for $2.6 billion. Its founder, Min Zhu, was demonstrating WebEx to Bill Gates when Bill stood up and said, This is what I want!
But Cisco’s WebEx soon also became a new problem, “WebEx was not designed for the Internet, so the code needs to be rewritten, Cisco is not willing, I have to leave.” Yuan Zheng said that although he was managing a team of more than 800 people at the time, in the first few years, no one was concerned about what they were doing.
He later started his venture with more than 40 colleagues at Cisco, and Schumann, a former head of Cisco’s development department, invested $250,000 in start-up capital, and in 2013 he secured $6 million a round of A-round financing from Yahoo founder Yang Zhiyuan and Qualcomm Capital, and $6.5 million in B-round financing from Li Ka-shing-Wei Port Capital.
To quickly get the support of the capital market, mainly Zoom in the product experience and business model have quickly found its own positioning. Focus on video conferencing, do not do too many additional features or rely on advertising, traffic to make money, so that Zoom’s product experience is more prominent, and in 2011-2013, Zoom adopted a free model, quickly entered the education industry and small and medium-sized enterprises market.
Since then, Zoom has also moved into large and medium-sized enterprises, offering products such as Meeting Connector, Room Connector, Webinar Platform, etc., to meet the needs of privatization deployments and to further expand its product line as an enterprise-service-level platform.
When Zoom went public on NASDAQ last year, Yuan said, “You can celebrate all day, but you don’t want high school to be the pinnacle of your performance, do you?”
But Zoom’s path to its platform is not easy. For now, Zoom is focused on the recent security crisis, with no time for other product and feature upgrades. This will give competitors a good window of time to grab this short-term burst of market.
In particular, Facebook’s recent messenger Rooms, which also introduced group calls on Facebook’s WhatsApp, video services on Instagram, and Microsoft’s massive marketing of Teams and Office 365, will make Zoom’s market progress esmo, after its brand image damaged.
In the field of security, Google, Microsoft, Ali, Tencent and other companies that provide cloud services, all as early as the cloud security field layout, there are corresponding solutions to deal with similar crises is easier, and Zoom in the past in the security field did not have much investment, and can not quickly deal with the current crisis.
In addition, Zoom itself is characterized by the need to solve video conferencing, use out of time, tool attributes, social attributes are weak. The user’s use of the platform is too single, easy to be social scene attributes of the more powerful products to steal the user.
Zoom is also aware of the problem, trying to create an application marketplace to compensate for a single application problem, such as access to other marketing and data statistics products, while Zoom also integrates itself into other large enterprise service platforms such as Salesforce and Slack.
Such cooperation will also encounter the user experience difficult to unify the problem, such as third-party tools if there is a problem, the initiative is not on the Zoom side, and the data between the various products will not be too deep.
In the domestic market, investors have analyzed that “Zoom could suffer the same situation as Google, and rivals such as BAT are too powerful and too savage.” “Although the domestic video conferencing market is already the Red Sea, but the development is not sufficient. For example, the conference content real-time voice transcription and so on need to pay to use, has not yet large-scale popularity, “video conferencing market will still have a lot of potential.”
For Zoom, which is stuck in a data crisis, it may not be much time left.
Note: Wang Wei and Zhang Xin are pseudonyms in this article