Zoom Enjoys a Surge In CCaaS Sales, Credits New Bundling Strategy

The tech giant recorded a 246 percent year-over-year (YoY) spike in CCaaS deals worth $100,000 in annual recurring revenue (ARR)

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Zoom Enjoys a Surge In CCaaS Sales, Credits New Bundling Strategy
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Published: May 21, 2024

Charlie Mitchell

Zoom continued its CCaaS momentum last quarter, enjoying a surge of six-figure contract wins.

Indeed, the tech giant secured 90 deals surpassing $100,000 in annual recurring revenue (ARR). That represents 246 percent year-over-year (YoY) growth in the metric.

Kelly Steckelberg, CFO at Zoom, credited the recently launched CCaaS packages as a significant driver. These bundles aim to help organizations spread CCaaS across the business at a more affordable rate.

Such a proposition has likely resonated with Zoom’s existing UCaaS base.

Nevertheless, Eric Yuan, Founder & CEO of Zoom, also noted that much of the new business comes from net new customers, with CCaaS becoming an enterprise door opener.

That has taken many by surprise, even Yuan himself. As the CEO stated during an earnings call: “When we started… we thought most of the deals would be with the existing Meeting and Phone customers. However, that’s not right.

Often, they are not Meeting or Phone customers. [Instead,] they are becoming “first” Zoom customers, deploying the Zoom Contact Center.

In addition, Yuan credited Zoom’s investment in channel partnerships and fast-paced innovation across the CCaaS platform.

Last quarter, that innovation cycle continued to hum with the launch of “all key” social channels, advanced data encryption, and a next-gen dialer – alongside a raft of agent- and supervisor-assist tools at Enterprise Connect.

Meanwhile, as Zoom fine-tunes its core capabilities, it strives to push the boundaries of contact center and AI innovation, as the vendor’s upcoming webinar with CX Today will highlight.

Having achieved this balance, Zoom is mixing it with the best in the CCaaS business. Yuan confirmed:

As a result of how far the product has come, we have seen strong growth in the number of deals where we have beat or displaced a Gartner top four CCaaS player.

The CEO then shared examples, including a Silicon Valley-based cloud software company that deployed a “top three” CCaaS solution before switching to Zoom.

According to Yuan, the business switched due to its preference for Zoom’s feature set, seamless integrations, greater uptime, and built-in AI.

In another example, Zoom secured a 1,000+ seat contract, competing against another of the “top three” – with Yuan citing “customer trust of our brand.”

Yet, summarizing the central theme across Zoom’s new CCaaS business, he stated:

They know that we listen to customers, and we innovate. That’s the reason why – with our contact center – we’re making very good progress.

What Else Is New with Zoom In CCaaS?

Also in Q1, Zoom received FedRAMP moderate authorization for its essentials and premium SKUs. That will allow U.S. government agencies and entities doing business with them to leverage Zoom Contact Center.

Moreover, the CCaaS platform now supports PCI compliance, opening the door for customers that have payment processing in their workflows.

Lastly, Zoom announced a partnership with Avaya, the enterprise on-premise contact center stalwart, before its headline-hitting tie-up with Meta.

Thanks in large part to its CCaaS success, Zoom achieved another steady quarter of earnings growth, with enterprise revenues up 5.3 percent YoY, reaching $665.7MN.

That growth helps counterbalance its declining consumer business, which has understandably declined since its pandemic heyday.

Overall, however, Zoom is still comfortably in the green, with total Q1 revenues of $1.14BN, up 3.2 percent YoY.

 

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