Updated: Is ZOOM Your Next Competitor?

Update: I spoke to ZOOM CEO Eric Yuan this morning. He told me that it’s correct that they do try to establish relationships directly with the clients. But, he says that ZOOM’s policy about this is very specifically defined: If an AV integrator has an existing client relationship, all they need to do is register that client and ZOOM will not go or talk directly to the client without the integrator’s assistance. But, if ZOOM establishes the relationship directly, they will potentially sell the ZOOM system directly. Yuan says, “We do have a PSO team and sometimes customers can count on Zoom to set up/install Zoom rooms system per their requests. But customers will purchase hardware by themselves or via CDW, etc.” He also stated unequivocally that ZOOM would never give away the hardware to a client for free to get the ZOOM sale. I asked him if he’d ever done that and he said, “No, and I will stake my personal reputation in this claim.”

We just got confirmation of a multi-million dollar AV integration job that was designed by an AV consultant and bid on by reputable AV integration firms but, the job was awarded to ZOOM — yes, ZOOM, the videoconferencing manufacturer, directly.

Yes, the same ZOOM soft-codec, video- and web-conferencing services — the same one you, as an integrator, are specifying to your clients.

But here’s the kicker — we have a source that says ZOOM agreed to put in all the AV gear for FREE — yes, free. All they wanted was a long-term licensing deal for the ZOOM software. So, they’re going to install the hardware for free, apparently, to get the software licensing fee.

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But ZOOM is also actively promoting (and still recruiting) their AV partners. Look here.

When we first heard about this, we were skeptical that it was true. But now we know it’s true. ZOOM actually isn’t really making it a secret that they are doing this. Check this out; they’re actually, actively advertising to hire AV installers: https://zoom.us/careers (scroll down to Professional Services). And, just in case they take these job postings down, you can see the screen shots I took of the ads here and here.

It gets even more interesting — they’re even advertising to the end user clients that they do AV Integration — open this PDF and scroll down to the section on “Deployment.” Again, in case ZOOM takes this down, I grabbed it and you can see it here.

So are you selling and integrating ZOOM? If so, does this concern you?

I reached out the ZOOM President, Eric Yuan himself yesterday, to find out what the plan was within ZOOM: Are they planning to go completely direct in the future of do they still want to support the AV integration channel? I suspect that, once you’ve had this happen once, you’re unlikely to continue to support a manufacturer that sells direct (and even actually competes with you) — especially since you can get soft-codecs from others who aren’t selling direct or installing the hardware for free to get the software seat-license contract.

Gary Kayye

About Gary Kayye

Gary Kayye, founder of rAVe Publications, is one of the most prominent personalities in the audiovisual industry. He has been a contributor to WIRED magazine and a technical advisor and columnist for Sound & Communications magazine as well as an opinionated columnist for rAVe [Publications] since 2003. In addition to his writing and market analysis, Gary has been a product, marketing and business operations consultant to dozens of AV companies in the U.S. and overseas. Clients have included companies such as Sony, Sharp, Epson, Lutron, InFocus, Sanyo, Mitsubishi, NEC and Philips.   Gary, who has been involved with the audiovisual market for over 20 years, was the recipient of the InfoComm 2003 Educator of the Year Award and the 2007 NSCA Instructor of the Year Award. Over the years, he has donated much of his time as an active volunteer in the AV industry’s trade association and served as chairman of InfoComm’s Professional Education & Training Committee (PETC), chairman of the ICIA Design School Committee and chairman of InfoComm’s Installation School Committee. In addition, he has served on the InfoComm board of governors. He also helped grow the InfoComm Projection Shoot-Out as the premiere AV industry trade show special event serving on the committee from 1991 through 1997, and was instrumental in launching the Shoot-Out in the European market at the Photokina Expo in 1994 and 1996 as well as the Asian market at the 1995 and 1997 INFOCOMM Asia shows.   Prior to founding his own company, Gary was vice president of sales and marketing for AMX Corporation (www.amx.com), a manufacturer specializing in professional AV and residential AV control systems. Prior to AMX, Gary spent nine years at Extron Electronics (www.extron.com), rising to the position of vice president of sales and marketing. Gary earned his bachelor’s degree in journalism in 1987 from the University of North Carolina and is currently Adjunct Faculty at UNC in the School of Journalism teaching a class on how future technologies will affect the future of advertising, PR and marketing.   He is also the founder of Swim for Smiles, a non-profit that raises money for the N.C. Children’s Hospital through swimming and other fitness-related events for kids. You can contact him at gary@ravepubs.com..

  • Joey D’Angelo

    I’ve been SAYING THIS FOR YEARS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Question is, can whomever Zoom partners with to do this pull this off.

  • Nick Chong

    Hello Gary, thank you for the mention. Given the soaring popularity of Zoom globally, we support different engagement models – an integrator-led model, a customer-DIY model and a small Zoom-led model that partners with subs. Our goal is to deliver a great product and service experience – and our customers choose the model that best meet their business objectives. If anyone is interested in engaging with us as partners in any of these models, please feel free to reach out to me.

    • Gary Kayye

      Hi Nick, Thank you for the details and clarification.

    • Erik Nowakowski

      I’m interested in hearing more from you on this. Your statement directly contradicts the claims in the article as well as my experience. I applied to become a Zoom re-seller back in Aug and was told you are not accepting new partners in the region.

      The install crew on the project I described above was flown out from California. When I asked, your project manager said you do not use subs, but probably should. This particular install was also rushed because the next opening for install was 4 weeks later. That would seem like a great time to find a local sub.

    • Gary Kayye

      Sound like you have some clarification to do…

  • Paul Richards

    Zoom has gone direct with multiple deals where our company did the upfront sales work on. And we have competed with Zoom for integration on a few deals as well. Their partner program has fallen apart! Registering a deal is basically like giving Zoom your clients contact info to sell to directly. There is no deal protection and if the “deal” doesn’t close in 90 days they will sell direct (when do deals close in 90 days?) Years ago when Greg Holmes was in charge of the channel it was different…. I am not a fan of the way things have changed

  • Paul Richards

    I am glad you posted this Gary. We have competed against Zoom before as well (on deals we brought to the table). But I cannot believe they would give the Gear away for free. That pretty much means no ProAV company can compete against them. Their deal registration program has turned into a complete mess. It feels like you basically give them your clients info and they sell direct if it doesn’t close in 90 days. I guess that’s the world we live in now… We have been a partner since the beginning… So this is very sad to hear…

  • Erik Nowakowski

    No way!! I just had this happen with a client and Zoom. Zoom had them totally decimate a 1.5 year old $40k system that was used in a multi-purpose / events space. The replaced totally functional gear with inferior gear and did not set the system up well at all. The client lost features and functionality. I’m now being brought back in to fix it.

    They are not supplying gear by the way, the client bought direct from CDW. I was suspicious that they gave them a deal on the installation of things, but have not been able to confirm.

    From my experience they are not ready for prime time, and the quality of the work and their advise shows it.

    • Erik Nowakowski

      edit. I just remembered they said they could supply the gear, but it would have been at a significant mark-up. This was not a job that was bid out.

    • Gary Kayye
    • Gary Kayye

      And, here: https://www.linkedin.com/groups/37705 (under my post)

    • Phil Shoop

      I will say that this is true. Most Zoom room equipment that Zoom is specing is low end web stuff no one is making any money anyways. From an integrator standpoint I understand customer throwing out a $40K system as they are just are tired of the Cisco’s and Polycom gear (although not sure why they didn’t keep the nice microphone system and just integrated it with a PC and Zoom on it). But we still successfully build $50K+ integrated systems around the Zoom software or any web based software. Heck QSC is building a whole new integrator line surround web based conferencing rooms with Q-Sys. Customers still need proper DSP, Microphones, control systems, higher end cameras, etc to work with the Zoom Software or Skype for that matter. I do not fell AV integrators are loosing that much if they just adapt to this new technology. If you play it right integrators still have a key roll. I will secondly my co-works comments Paul Richards on the the direct dealership agreement, their registration program stinks and they will take deals direct even if you are still activity talking to the customer after 90 days. To comment on adding new subs this is not true. We actually tried to do this as a direct zoom dealer already and nothing came of it. It’s not because there is no demand because we have had customers come to us and say Zoom installation teams cannot get to us for another 2 months they are just to busy.

      We think Zoom as a awesome web conference product they just have to understand the AV integration market better and play nicer with dealers that try to get business for them and want the higher profit AV equipment surrounding their solution.

      Much more to say but I digress.

  • Hello there… Chiming in from the Zoom Partner community. We are one of the zoom partners in that link you send, Perfect Video Conferencing. Check us out.

    Zoom is a disruptive force like nothing I have seen in many years of Unified Communications. I do believe, however, they are more of an outcome of an ever-changing, imploding and morphing UC space rather than a cause. Clearly Zoom is starting to frame the conversation as well. Freemium or Free services, end-user savvy products and massive competition have reset the enterprise expectations. USB cameras can now out-perform H323 systems and a simple work-station and be imaged to replace robust video systems (codecs). We’ve chosen to work with this shift rather than resist it. The codec or purposely-built hardware is not dead, but it seems to be on life-support or at least in the ER. I think members of this AV community have to adapt to the Zoom-like models emerging (Zoom is not alone here- just look at Bluejeans Huddle Rooms, Starleaf, Pexip, Fuze, Ring Central, Skype for Business, Google Hangouts, ShoreTel… fill in the UC solution – they all “do video”) Adapt of be left behind.

    Zoom direct? We don’t like it. It is our biggest challenge. This has mostly been around software sales, however and not the AV integration to make sure the customer gets it done right.

    We also don’t see direct sales conflicts often. Zoom has a great set of channel-friendly team members creating great deal registration, clear conflict resolution processes and a clear expectation of doing what is right for the customer AND the channel.. As others have implied here, however, they have a long way to go before they can match any of the AV install experience we provide or meet the demands of an enterprise customer’s facility needs.

    We have seen more custom license pricing to off-set hardware gear purchases than we like. We have not seen any free gear for contracted licenses. I’ll post again should I see free gear deals. That would seem hard to sustain. What we are experiencing, however, is a growth in request for us to be a clean-up crew or a deployment team, which is quite exciting. If we assume USB cameras (Logitech specifically) and Zoom, Bluejeans, Skype for Business has won, how then do we work with this new customer profile and get AV integration right. That’s what we think is next and why we choose to work with Zoom.

    • Gary Kayye

      This is a fantastic, well thought out response. And, it is rooted in fact. Thank you for this explanation. Please feel free to reach out to me if there is anyway I can ever be of help or if you’d ever like to write a column about your personal experiences !

  • Joey D’Angelo

    All, I originally posted something along the lines of “I knew this would happen,” but that was just shock. Now that I’ve had a few days to noodle it as a dear friend would say, I feel like I have something to offer here. For most of us in the AV community, we want to sell sell sell boxes and install install install. I feel like we should embrace the soft CODECs of the world and treat them just like we did with Cisco/Tandberg, Polycom, Lifesize, etc. When we design rooms, they should be capable of enhancing the Zoom experience with professional gear. But we should also make it such that your client, the end user, can change to a different soft CODEC in the future without the need for hardware changes. In other words, keep these things open because the technology in this space is only just starting to evolve and my guess is that it’s going to be a battle royale….

    • Corey Moss

      The soft CODEC space is going to make it’s own way into end user conference and huddle rooms however they have to do it, I’ve had conversations with numerous providers, though they have never discussed going direct – it’s mostly about the proper messaging and technology perspectives for the end user (as well as the integrators themselves). Of course through the partners is the most preferred way as far as I’m concerned as a long-time commercial integration sales account manager. Those who continue to hug the hardware will sure enough die out, it’s only a matter of time.

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