Video calling platform Zoom announced its biggest acquisition to date on Monday, snapping up Five9, a provider of cloud-based call centre software, for $14.7bn. Having enjoyed massive growth during the Covid-19 pandemic thanks to the associated explosion of virtual meetings, Zoom is now looking to the future and expanding its range of services to businesses. It sees contact centres as a big opportunity, and the move for Five9 will put it head-to-head with a host of incumbents in the sector as well as rival Cisco.
The all-stock deal is likely to go through in the first half of next year, and Zoom CEO Eric Yuan says bringing Five9 on board will help his company address opportunities in the contact centre market which is currently worth $24bn globally. “We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers,” Yuan said. “Enterprises communicate with their customers primarily through the contact centre, and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers.”
He concluded: “We are thrilled to join forces with the Five9 team, and I look forward to welcoming them to the Zoom family.”
Zoom Five9 acquisition: the details
Founded in 2001, US-based Five9 works with 2,000 customers around the world. It says its cloud-based platform, which offers a wide range of services for call centre operators and their organisations, handles over seven billion customer interactions each year.
For Zoom, the acquisition marks the latest step in its journey from a video collaboration software platform to a more comprehensive provider of unified communications as a service (UCaaS). It enjoyed rapid growth during the Covid-19 pandemic as meetings and events moved online, but as lockdown measures have eased around the world finding ways to sustain this growth has been the challenge for the company’s leadership team.
“Last year it expanded its platform strategy with new developer tools and Zoom Applications, and earlier this year it announced Zoom Events,” explains Raúl Castañón-Martínez, senior research analyst at 451 Research. These moves helped Zoom’s expansion, but “despite several ongoing partnerships, the only segment still missing from its offering was contact centre, which several of its competitors already offered,” Castañón-Martínez says.
The changing face of the contact centre
For cloud communication companies, the changing face of the contact centre, with more and more businesses opting for virtual set-ups, presents a significant opportunity. Data from the 2020-21 UK Contact Centre Decision-Makers’ Guide, published by ContactBabel, shows that last year 58% of call centres operated by respondents were virtual, up from 33% in 2010.
"Entering the contact centre space is a logical move for Zoom, given that it represents a significant opportunity within the cloud communications space," adds Castañón-Martínez. "The acquisition of Five9 should allow it to build on the momentum it gained in the past year, setting the stage for long-term growth with a strategy encompassing the broader cloud communications opportunity – including UCaaS, online events, CPaaS and now, contact centre."
Zoom will have to overcome significant competition if it is to make a splash in the call centre space. "This move should strengthen Zoom’s position in the market against large technology vendors with a broad cloud communications portfolio encompassing UCaaS and contact centre offerings such as 8x8, Avaya, Cisco, Genesys and Vonage," says Castañón-Martínez. "There is also a second generation of cloud providers focused on multichannel digital interactions, wrapping voice together with chat, email, social media messaging and in-app communications as bundles that transcend the contact centre – such as Twilio, RingCentral, Sharpen, CallVU and Talkdesk."
Also looking to make its mark is Cisco, a company well known to Zoom; Yuan and Five9 CEO Rowan Trollope are both former Cisco executives. "In addition to a portfolio that includes unified communications and contact centre offerings, Cisco is aggressively expanding its capabilities around hybrid and virtual meetings and events with recent acquisitions that include Socio Labs and Slido," adds Castañón-Martínez.