With most of the world’s white-collar workforce working from home due to the COVID-19 pandemic, there’s been an explosion of demand for communication tools from companies including Zoom, Slack, and Microsoft. But these effects aren’t short-term – this crisis may change how we work going forward. Which communication platform is most poised to benefit? To understand the landscape better, Michele Giese of GLG’s Tech, Media, and Telecom team on April 1 interviewed John Case, CEO of Unify Square, a technology provider that enables Zoom, Teams, Skype, and Slack, and the former Corporate Vice President for Office and Office 365 at Microsoft. The Q&A below has been edited for length and clarity.

What are the short- and long-term implications of COVID-19 for Zoom as well as Teams?

With hundreds of thousands of people working from home, this is a huge shock to the system for IT teams. Technology only previously used 10% to 20% of the time is now at 90% or 100% – no one was ready for that volume. Every company around the world is struggling with that. Certainly, the short-term implications are dramatic usage and, to some extent, a lowering of expectations of quality on that usage. I have a customer who’s turning on 300,000 users next week, and they said, “We don’t expect the same quality, initially.”

Companies have realized their users are more ready for this change than they believed. Employers have found that users are far more adept at running apps and connecting virtually than they thought. In the long term, they’ll look carefully and ask, “What is it that we need?” An emphasis on the desk phone, the meeting room, or remote technologies? Working from home will become a more standardized and accepted thing; it’ll take a long time for people to be back in the office, which will continue to put an emphasis on anything around accessibility, remote technology, and finding data. That will be a boost for all cloud companies, and especially meeting and collaboration tools.

During this crisis and after, companies will reflect on what they got wrong to be more prepared the next time. They’ll have much more capacity. They’ll be much more aggressive in rolling out technologies in these situations so they’re not caught off guard again.

Zoom’s active users increased 151% year over year in March, breaking its own records. On March 31, it had 4.84 million daily user volumes within the U.S., surpassing Microsoft Teams’ 1.56 million users. What does this mean for current demand?

As companies have sent people home, universities have gone to online learning, and people are finding new ways to connect socially, the volume for all these services has spiked. Microsoft recently said that Skype consumer service was up 70%. But Zoom has undoubtedly seen the most upside. With the customers my company works with, Zoom is skyrocketing. It was the number-one app on the iOS App Store for most of the last four or five weeks. It’s not just a business product anymore, but a consumer and international product. That’s put it under a tremendous amount of stress in terms of volume and focus.

Is Zoom not keeping up with the capacity required to serve increased usage on its platform? What about Microsoft Teams and Slack?

They’re all scrambling; taking on an increase of a couple of orders of magnitude in volume overnight would stress anyone. Teams had a major outage for a few hours last week in Europe. Zoom’s technical problems have exposed data. It was more of a North American company, and now, suddenly, this is its moment to expand. That’s going to stress its system. Zoom was a Silicon Valley darling flying under the radar of the general population, but not anymore. Now it’s being attacked for its privacy policy. Microsoft and Google have already dealt with things like this because they’re already at that scale.

Zoom has a lot of work to do in addressing security and privacy going forward, but I’m confident it’ll do it, and rapidly. It’s innovating incredibly quickly, much more quickly than others. Zoom’s gone through this halo period where it was the savior. Now, in the past two weeks, every story is about how it can’t deal with the volume or its privacy problems. The company will emerge from that.

 Slack reported 9,000 new paid users since last week. Will Slack be able to keep this type of engagement post-pandemic?

Slack’s interesting because it’s one of these technologies you could say is going to indirectly benefit from the pandemic. Many companies use Slack for free. The way Slack tiers its pricing, if customers want to analyze what users are doing and put security policies in place, they need the paid version. The pandemic has helped Slack convert people at the enterprise level to paid. The pandemic has accelerated people’s willingness to think about new technologies. But Slack, while it’s attractive and will keep growing, won’t grow at the rates it has been, and that might put it under price pressure.

Various hardware companies have rolled out products that are compatible with Zoom and Teams, like Poly. How are these hardware companies faring?

 They will get some benefit over time because people will be putting more energy and thought into meetings. But right now, no one’s updating their meeting rooms or hardware in the office. On the other hand, a few manufacturers will benefit in the short term because they’re selling great headsets and other things to use at home. Long term, those manufacturers will get a boost as people go back and think about what they need to do as they roll out Zoom or Teams. The interesting debate will be, in a post-COVID-19 world, will people want to spend several thousand dollars on a meeting room solution that can natively boot Zoom or Teams? They will decide either it’s important to modernize once and for all or their existing hardware is good enough because this could happen again.

Which platform is best positioned to win?

It depends. For corporations wanting one application that does the entire productivity environment end to end, with clients, email, and storage, Office 365 is the clear winner. Gartner said it has over 90% market share and it’s probably even higher than that. But for those who use Box, Zoom, and Slack, they can be inserted to work alongside Office 365. Zoom is positioned for terrific growth in the meeting and phone space. COVID-19 has put it into the spotlight, spiked its volume, and driven its share price. But this question doesn’t have one answer. Some companies will use Office 365 for email, office clients, and things like that. But then they’ll say, “The Zoom Meeting solution is so powerful for us and our users like it so much, we’re going to stick with it too.” That’ll put price pressure on everybody, but that’s good for the market overall.

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About John Case

John Case is CEO at Unify Square, a provider of operations and performance management software and 24×7 cloud-managed services for Microsoft Teams, Skype for Business, and Zoom. Previously, John held a variety of roles, including Corporate Vice President for Office and Office 365 at Microsoft, where he was responsible for product management, product marketing, digital and brand, pricing, sales engines, and business management for the Microsoft Office family and Office 365.

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This article is adapted from the GLG teleconference “COVID-19 Implications on ZM, MSFT Teams, WORK.” If you would like access to this teleconference or would like to speak with John Case or any of our more than 700,000 experts, contact us.

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