Responding to Service Cloning in Tech

Should Zoom care about commoditization of its services?

I thought that the examination of Zoom’s flaws presented a good look on how the company’s strategy could undermine its ability to leverage viral popularity into customer growth. It leads to another questions, though, in how Zoom can best respond to its competitors as it adapts to market volatility.

In my recent article, I argue that Google quickly responded to Zoom’s popularity by commoditizing key differentiating features in Google Meet to thwart Zoom’s ability to convert new users into paying customers. But, in researching Zoom’s business strategy, I’ve come to question whether Zoom should care about the commoditization. From a pure business perspective, Zoom’s massive recent growth may actually represent a drain on its resources that could impact its ability to deliver quality service to its paying customers. We may have seen some indication of that with the recent outage.

It may seem counter-intuitive, but its massive user growth could actually dilute key growth metrics in a way that could diminish perceived investment returns. Admittedly, I am approaching the problem from a business management perspective, so I would appreciate thoughts from an investor or board view.