What Zoom’s move into the cloud contact center means for UC

Zoom Video Communications is spending US$14.5 billion on the purchase of contact-centre-as-a-service (CCaaS) business Five9.
21 July 2021 | 1 Shares

What does Zoom’s expansion into the cloud contact center market mean? (Photo by KENA BETANCUR / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

  • This is Zoom’s first billion-dollar deal and comes as the company looks to expand beyond video chat
  • The acquisition is part of the video-conferencing company’s plans to build out its existing Zoom Phone product line for business users
  • The deal is expected to be finalized in the first half of 2022

In the United States’ (US) second-biggest technology deal this year, popular video conferencing firm Zoom will be acquiring cloud call center service provider Five9 for about US$14.7 million in an all-stock transaction. Considered as its first major acquisition, the company is taking advantage of the impressive rise in its stock price in the past year as it looks to expand beyond video chat.

According to FactSet, the deal is the second largest in 2021 so far, behind Microsoft’s planned US$16 billion purchase of Nuance Communications. Zoom CEO Eric Yuan in a press release said, “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.”

20-year-old Five9 will become an operating unit of Zoom after the deal, which is expected to close in the first half of 2022, the two firms said. Five9 provides a cloud contact center offering with a suite of applications for the management and optimization of customer interactions across multiple channels.

Zoom gains entry in the cloud contact center space 

As expected, the proposed acquisition is Zoom’s latest attempt to broaden its offerings, capitalizing on the wave of growth momentum it has experienced since video collaboration tools became vital cogs of many businesses in the past year-plus. Perhaps it is important to note that the video conferencing software has in the past year added several office collaboration products, a cloud phone system, and an all-in-one home communications appliance.

The acquisition of Five9 — which has amassed over 2,000 customers worldwide including Citrix and Under Armor, and processes over seven billion minutes of calls annually — will help Zoom enter the “US$24 billion” market for contact centers, the company said. In short, joining forces will offer both firms “significant” cross-selling opportunities into each other’s respective customer bases, the two firms predicted.

Five9’s chief Rowan Trollope said, “Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers. Joining forces with Zoom will provide Five9’s business customers access to best-of-breed solutions, particularly Zoom Phone, that will enable them to realize more value and deliver real results for their business. This, combined with Zoom’s ‘ease-of use’ philosophy and broad communication portfolio, will truly enable customers to engage via their preferred channel of choice.”

Following the close of the transaction, Five9 will be an operating unit of Zoom and Rowan Trollope will become a President of Zoom while continuing as the CEO of Five9, reporting to Eric Yuan. Zoom’s acquisition of Five9 is also complementary to the growing popularity of its Zoom Phone offering. Zoom Phone is a modern, cloud phone system that offers a digital alternative to legacy phone offerings, enabling organizations to connect and interact in new and convenient ways to keep businesses moving.