Is Zoom Better Than Microsoft Teams?

Is Zoom Better Than Microsoft Teams?

Microsoft is coming at Zoom with everything it’s got to make Teams the number one brand in telecommunications, but investors don’t care.

There are many ways that investors can react to Big Tech encroaching on their favorite company’s space, but usually, it’s panic selling. 

But, so far, this hasn’t been the case as Microsoft looks to topple Zoom (NASDAQ: ZM) from its teleconferencing throne. 

Is Zoom threatened by Microsoft?

While it might be a bit naive to say that any Big Tech company doesn’t pose a threat, it’s probably safe to say that Zoom investors need not panic sell just yet. 

There were murmurs of dissent yesterday about Zoom’s standing as the king of teleconferencing after Microsoft unveiled a host of new features for Teams — its ‘Zoom-killer’. The Windows creator is upgrading its Teams Phone service to include call transferring among devices, transcription, car play, spam call identifying, and much more. It will also be adding a fun little walkie-talkie feature in October. 

Why are Zoom investors unfazed?

Because other than the walkie-talkie — which my Apple Watch also has — Zoom has all of these features already. What’s more, as of July, Zoom is still outstripping Teams in terms of users, approaching almost 400 million to Microsoft’s estimated 250 million. Zoom investors also have plenty to remain optimistic about:

  • Zoom is far from out of ideas, announcing a slew of new products still to come at its Zoomtopia conference earlier this month. 
  • Management has projected revenue of more than $4 billion and earnings of $4.77 per share this fiscal year, which would depress its *admittedly* high price/earnings ratio. 
  • Its planned acquisition of contact center solutions provider, Five9, will add further growth opportunities — though it is under antitrust scrutiny. 

Big Tech competition doesn’t quite frighten investors like it used to, and in a teleconferencing market estimated at $100 billion, there’s plenty of room for both, so no need to panic yet.

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