Zoom tops Q1 conferencing SaaS market



Zoom Conferencing

The Q1 market for conferencing Software-as-a-Service (SaaS) has grown by 17% year-on-year (YoY) to reach over $800 million thanks to Zoom.

According to new data from Synergy Research, Zoom grew by 148% up from the first quarter of 2019.

In turn the other major vendors saw their revenues flatten or reduce slightly but it is mostly due to the structure of the market, which consists of two main segments.

The larger segment is the more traditional web and video conferencing. This group is led by Cisco, LogMeIn and Microsoft. Revenues from this segment were almost flat, declining by 1% from last year.

Conversely the smaller Video-as-a-Service (VaaS) segment, increased by 80% and is dominated by Zoom, whose Q1 market share was almost ten times the size of its nearest competitor. Overall, Cisco does still maintain its number one ranking in conferencing SaaS.

“The market was already heading in a direction that was favourable to VaaS generally and to Zoom specifically, but the impact of COVID-19 has turbo-charged that trend,” said Jeremy Duke, founder and chief analyst at Synergy Research Group.

“Previously VaaS was starting to gain traction in the mid-market and with large enterprises, helping to expand the overall market opportunity. Now, we are suddenly seeing VaaS usage blossoming across the board. We expect to see those gains continue long after the effects of the pandemic have diminished.”

The VaaS share of the conferencing SaaS market had been growing steadily, from 15% at the end of 2017, to 20% at the end of 2018, to 27% in the final quarter of 2019.

In the first quarter of 2020, however, the VaaS share of the total jumped a further 7%. Over the next five years Synergy’s predicts VaaS continuing to take an ever-greater share of the total market.