Today, most video conference calls are full of pauses, delays, garbled audio and complex interfaces. Those conditions remain the norm, even though a Gallup Poll found that 70% of employees around the world work remotely at least once a week — and globalization means even more remote offices and bureaus. Video conferencing company Zoom goes public on Thursday, promising to make customers happier with their meetings.
Marketplace Tech host Molly Wood talked to Nick Barber, an analyst at Forrester Research, about the current state of video conferencing. He said the technology is still hard to work with, whether the issue is reliable bandwidth, video compression or human error. According to Barber, workers also aren’t convinced it's worth all the effort. The following is an edited transcript of their conversation.
Nick Barber: Most people, regardless of generation, are a bit hesitant in terms of doing a call over video. So it's about getting people interested, comfortable with the technology and also showing value. So if you're just doing it to be face to face, that's one thing, but if you leverage the ability to share the screen, collaborate in real time, those are all additional benefits that you can bring with videoconferencing that drives up the value of that video experience.
Molly Wood: It’s so interesting because we've been swimming upstream with this technology for so long. Is it possible that it is actually not the right solution?
Barber: I think there certainly is a need for this because we know that, depending on what study you look at, anywhere between about 40% and 60% of communication is nonverbal. We as humans can both recognize and create almost a quarter of a million facial expressions. Without that video piece, you're missing out on a huge portion of the conversation by just having audio.
Wood: How much money is there do you think for the company that actually gets this technology right?
Barber: With employee collaboration and putting a dollar amount on it, it's sort of squishy. When we use video in a collaboration way, it's sort of like, "Well, we save this money on travel and maybe we got to market a little bit faster, too, and we had fewer meetings," and things like that. But it's really hard to put a dollar sign on that.
Wood: Sure. But do we have a sense of how much companies spend, just in annual dollars, on Webex and solutions like that?
Barber: It varies on the size of the organization. I will say that companies today — because of this fragmented nature of the collaboration space, particularly related to video — relatively large companies [are] losing about a million dollars a year in productivity because of this challenging videoconferencing environment. That's in terms of getting the call started on time, getting the people into the call, that's very challenging. In fact, some companies spend upwards of eight to 10 minutes fiddling with buttons and getting people on to calls, and that translates into real money.
Related links: more insight from Molly Wood
There are high hopes for Zoom in terms of its modern, cloud-based tech and interface. As an investment, unlike just about every other tech company going public this year, Zoom is profitable and has grown over 100% each year.
Currently valued at $8.7 billion, Zoom (full name Zoom Video Communications) plans to raise $626 million in its IPO this week. And despite its actual profitability and user growth, that's still less than the week's other big IPO, Pinterest. It is expected to file on Thursday at a proposed valuation of $10.6 billion. It's hoping to raise $1.2 billion in its public outing.
Pinterest has yet to turn a profit, although it did recently start showing an interest in making money, trying to appeal more to advertisers and adding features like buy buttons that let you shop for the pretty things you like to stick on your virtual corkboard.
Quartz has an interesting read this week on Pinterest's “frumpy Midwestern charm” and how it's skipped the whole "move fast and break things" attitude of companies like Facebook, Uber or Google, all of whom have been hauled before various authorities for it. Its audience is growing mostly globally and is mostly comprised of women who find Pinterest, unlike most of the rest of social media, to be a pretty nice place to hang out and dream of living your best life.
To be honest, I hadn't been to Pinterest in a while, but I went and peeked at it today and apparently my vision of my best life involves a really elaborate Halloween party.
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