Video Conferencing Industry: 5 Forces Worksheet

Key Barriers to Entry

List several types (or categories) of Possible New Entrants in video conferencing (at least 3). Put them in the
order reflecting your assessment of their likelihood of entering (highest to lowest). Then, below the
list, indicate a few factors that you feel influence the likelihood that a firm will enter.
1. One category, or type of possible new entrant will likely be a company that is well established, has
impressive cloud resources and can support the infrastructure and bandwidth for thousands of
servers, such a company could be Apple or Amazon. These two fall into the category of being able to
enter the video conferencing world aside from just being on a closed server like Apple with FaceTime,
and aside from just being a retail marketing place. They also have a name-brand that can pull users
with ease and already have users utilizing their services across other products/services
2. Other major established companies such as Meta & Google are already in this space
Another category of possible new entrants could stem from the Education sector. While Zoom has
become commonplace for schools post-covid, the reliance on tech for higher education & flexible
education could compel well-funded Education-focused tech companies from creating a video
conferencing tool that is entirely and specifically geared only towards education and educational
institutes. The need for tools for online learning could create one such new entrant that expands
remote learning and provides an efficient learning experience.
3. The threat of new entrants remains high due to the fact that Zoom has been successful and work
from home dynamics are further increasing the practice of flexi-working and remote working which
requires video conferencing. Any interested party that has server strength and a strong
understanding of the key pillars required: good video calling and in-tool benefits for easy data-sharing
will likely be met with success as Zoom has also faced issues with security breaches and bandwidth
speed. Any organization with certifiably reliable security provisions is also likely to choose to enter
because Zoom does not have sufficient end-to-end encryption that can cause pranks, hacks, and data
breaches that can be very detrimental to major organizations working remotely and therefore this
asset would be a compelling reason to switch to a new entrant
4. Social networks or more casual platforms used could also become new entrants - for example,
social media like Twitter/Instagram or more casual conferencing tools such as HouseParty could also
easily position themselves as a new entrant if users from certain younger demographics or more
creative industries, find it easier or seamless to have both social/work/conferencing in one arena
5. Lastly, it could also be that the possibility of new entrants is not that high or likely, previous history
with Skype’s fall, and its inability to sustain through a time when it could have profited significantly,
indicate an unstable market. While simultaneously, one switch can signal to a friend or colleague that
a change is being made to a new platform, it’s also likely that a dependency on Zoom will remain as it
has for 3 years post the pandemic. Additionally, as a return to the workplace commences, an interest
in video-conferencing and it’s tools may wane. However, having said that, the market for Video
Conferencing was worth 14 Billion in 2019 and is likely to go up to 50 Billion USD by 2026 which could
see a massive rush to get a slice of this market share.
 Supplier Power
List several types/categories of Suppliers in video
conferencing (at least 3) - what are the key inputs that
firms must rely on? Put them in the order that you
estimate they would have power to charge high prices
(highest to lowest). Then, below the list, indicate a few
factors that you feel drive the differences in their
ability to charge high prices.
1. Cloud Servers & Storage: Server hosts & storage
hosts are incredibly necessary for Zoom to host
portals, record meetings, store meetings and
credentials. Whilst Zoom was initially extending a
gesture of goodwill by charging under 40 minutes
free, this had cost Zoom between 30-50 Million USD
which is costly bandwidth, and would require
extensive cloud resources which it is reliant on. To get
8 billion meeting minutes per month, would need tens
of thousands of servers and hence suppliers of servers
understand this dependency and could easily charge
prices accordingly.
2. Hardware Suppliers: Zoom has made an
expansive foray into hardware as well, with a
Zoom for Home DTEN ME, which becomes
their all in one video conferencing screen.
Ease of use will increase it’s popularity and
the hardware manufacturer and supplier
could also easily hike up pricing once the
product popularity increases and if Zoom does
not have an extensive network of
manufacturers.
3. Data Centers: Much like servers, the data
centers supply bandwidth and problem
solving personnel, and the cost of running
these centers could increase as reliance on all
of the 8 billion meeting minutes is contingent
on the 17 centers that resolve any delays and
issues
4. Power & Coolers: Running servers, data
centers and storage can be costly, using
extensive electricity and the requirement for
cooling this equipment can be high and while
power and electricity
companies may not willingly increase pricing,
the cost of power is contingent on many
external factors and can easily fluctuate
depending on global power crises or political
threats, etc.
5. Office Equipment: Office equipment for each
office and data server is required and
necessary, it is unlikely that office equipment
Rivalry
List several (at least 3) of the Rivals in the video
conferencing industry. Put them in the order that you
estimate they would compete more directly with
Zoom. Then, below the list, indicate a few factors that
influence your assessment of whether they compete
directly.
1. While Zoom ranks No.1 (it’s shares went up
143% since their IPO) behind it fall also very
established competitor companies, the first
being CISCO WEBEX. Cisco Webex saw a
massive spike during the pandemic as well.
Right at the start of the pandemic, half a
billion peopled used WebEx for a total of 25
billion minutes worth of meetings. That is 3
times the normal capacity of WebEx, which
indicated that this was a huge spike in traffic
since the start of the pandemic. Cisco’s Webex
saw success and continues to primarily
because of it’s advantage against Zoom and
how it may compete more directly as time
goes on: SECURITY. It is the most secure video
conferencing platform, making it a good
alternative to Zoom and the random pranks or
hacks that are often seen in Zoom meetings.
They continue to augment their security by
also adding features such as Data Loss
Protection and Cloud Access Security Broker
solutions and regulations. They will also install
CloudBlock which will protect users against
illegal sharing of personally identifiable
information. They also continue to innovate -
they will be integrating with BOX, a leading
cloud content management platform (at the
moment, nearly 70% of Fortune 500
companies use BOX with over 100,000
business), this makes Webex even more
relevant and appealing.
2. Google - Google has been running Google
Meets, which is also a competitive feature.
While we don’t have a clear number of how
many businesses currently use Meets, but G
SUITE is used by 6 million businesses
worldwide. They have also made some of
their Meet features free and are including
features for classroom and video conferencing
that are similar to Zoom
3. Microsoft also announced they were making
features free and their Skype tool had reached
40 million daily active users, while they did
indicate they were shutting down Skype after
acquiring it in 2011, they have used
Buyer Power
List several types (or categories) of buyers in the video
conferencing industry (at least 3 types) where each one
might be thought of as a market niche. Put them in the
order you estimate for their willingness to pay (highest to
lowest). Then, below the list, indicate a few factors that
you feel drive the differences in willingness to pay.
1. Customers most willing to pay will likely be the
companies that have made a significant switch
even post-pandemic to the online teleworking
model and now have path dependency on the
tool. If these organizations have made a complete
switch already, their willingness to pay is higher if
the “freemium” model has moved to subscription
based.
2. Customers that have high data security needs,
such as government institutions, and require a
security and high speed and clear network, are
likely to rely on Zoom and it’s efficacy and would
over the willingness to pay at higher prices
3. Educational institutions (whether cautious
schools, or online part time higher education),
that are now dependent on Zoom and require the
vast array of tools in place for interaction and
screen sharing, will likely be willing to pay a
premium to continue the subscription provided
another entrant (that is intentionally geared
towards education) does not enter
4. The least likely to cover any subscription increase
outside of the “freemium” model are
demographics that are not reliant on Zoom and
could easily switch to Google Hangouts for easier
cheaper use, if they have no dependency on
higher quality of video conferencing, or could
easily switch to social networks for video
conferencing instead
suppliers would hike up prices, but they are augmenting features in their TEAMS tool
contingent on general material supplies. which has seen success. During 2020, while
27% of businesses used Zoom, 18% used
Teams
Threat of Substitutes
List several types/categories of Substitutes for video conferencing (at least 3) - what alternatives might
buyers rely on? Put them in the order that you estimate they are comparable to buyers (highest to lowest).
Then, below the list, indicate a few factors that you feel make some more comparable.
1. Existing platforms that are gaining traction but are lesser known, such as RingCentral, NewSela -
could easily be a threat, all it takes is one signal from a colleague to switch to an alternate platform
2. The same applies to Google Meets, Teams as they have equal pool in gaining traction and are
established names with a few established organizations already using them
3. Social media networks with ease of access could easily also be a substitute, if reliance on video
conferencing decreases as people return to the workplace, it’s likely an easier approach will be
favored that is more accessible and less formal such as social network platforms
4. BlueJeans could also be a substitute, it was recently acquired by Verizon and any innovation and
strong marketing on this front could easily make it a substitute
5. Any platform that has stronger security and significantly higher speed access with more interactive
tools could immediately become a threat as a potential substitute