As the practice of on-line video communication soared during the Covid-pandemic lockdown and the name of a relatively unknown company, Zoom, became a generic term for this widely adopted innovation. The platform’s user-friendly interface and attractive pricing policy proved to be a huge success and Zoom’s revenues grew from $0.6 billion in 2020 to $4.1 billion in 2022. Zoom was created in 2011 with $145 million in venture capital and went public in 2019 raising a further $350 million. It could be considered a classic “tech unicorn” that had managed to build the capabilities at the right time to take advantage of the unexpected opportunity offered by confinement.
Zoom’s origins, however, also tell an interesting story that raises questions about corporate financialization within another Silicon Valley firm, Cisco. Prior to the lockdown, Cisco was market leader in the corporate videoconferencing market with its Webex platform acquired in 2007 for $3.2 billion. Its initial success led to revenues of over $1 billion by 2010 and it was considered also to be a strategic product that gave the company a foot in the door of corporate customers who could subsequently be sold other services. The Webex team rapidly became disillusioned with their ability to continue to offer satisfactory customer service as part of the Cisco corporation and Zoom’s founder, Eric Yuan, left the company with forty engineers. Between 2020 and 2022, revenues for the Cisco segment that includes Webex teleconferencing fell from $4.8 billion to under $4.5 billion.
The difference between the ability of the two companies to take advantage of this significant market opportunity raises questions concerning Cisco’s previously-recognised ability to innovate through acquisition and its continuing commitment to the process of innovation after two decades of corporate financialization.