CompanyGraph
Zoom Video Communications, Inc.
ZM · United States
Runs video calls that stay clear even on slow or crowded internet connections.
Zoom sells video conferencing software built around a proprietary codec that compresses real-time video to roughly half the data volume of the H.264 standard, which means calls hold HD quality on the congested or low-bandwidth connections that remote workers, telehealth clinics, and school classrooms actually use. Because the codec clears a quality threshold that H.264-based competitors cannot match on those connections, enterprises embed Zoom into Salesforce workflows, bind employee logins through Active Directory SSO, and port office phone numbers into Zoom Phone — and each of those integrations has to be dismantled separately before a company can switch, so each renewal becomes easier to justify than the alternative. The codec's edge is not a feature that can be licensed or replicated by spending more on cloud infrastructure; it is the accumulated output of a small team of engineers with specialized expertise in packet-loss and jitter handling, so the quality advantage is effectively capped by the retention of that group. If that team fragments — through departures or a competing acqui-hire — the bandwidth gap closes, and with it the main reason those Salesforce connections, SSO bindings, and ported phone numbers were worth building around Zoom in the first place.
How does this company make money?
Zoom charges a monthly or annual subscription fee based on how many people can join a meeting at once and which features are unlocked. A Basic plan supports up to 100 participants. Enterprise plans handle webinars with 500 or more attendees and come with additional controls and security features. On top of that, Zoom charges a separate per-user monthly fee for Zoom Phone, which replaces a company's traditional office phone system with a cloud-based one.
What makes this company hard to replace?
Leaving Zoom is not as simple as signing up for a different service. Large companies have embedded Zoom directly into tools like Salesforce, which takes months of IT work to undo. Their employees log in through SSO tied to corporate Active Directory systems, and rewiring that authentication takes significant internal effort. Companies that moved their office phone numbers into Zoom Phone face regulatory delays in porting those numbers back out to another carrier. Each of those connections was built separately, and each one has to be dismantled separately.
What limits this company?
The quality advantage comes from a small group of engineers who spent years learning how to handle the chaos of real internet traffic — dropped packets, choppy connections, timing gaps. That knowledge lives in people's heads, not in a manual. You cannot solve this bottleneck by renting more cloud servers or hiring general software developers. If that team shrinks or stops improving the codec, the bandwidth edge closes.
What does this company depend on?
Zoom cannot operate without Amazon Web Services and Microsoft Azure, which provide the global data center capacity the service runs on. It needs Apple App Store and Google Play Store to distribute its mobile app. Browser-based calls depend on WebRTC protocols. Zoom Phone requires telecommunications carriers to connect calls to the regular phone network. And SSL certificate authorities manage the encryption that keeps calls secure.
Who depends on this company?
Remote-first enterprises rely on Zoom for day-to-day operations that would stop without a working video conferencing platform. Telehealth providers use it for patient consultations that must meet HIPAA privacy rules — losing Zoom means losing a compliant way to see patients remotely. K-12 school districts depend on it to run classroom-scale distance learning sessions. Contact centers use Zoom's virtual agent AI to handle automated customer service calls.
How does this company scale?
The codec software and the data center routing systems that carry calls can serve more users at almost no extra cost per person — adding a million more meeting participants does not require proportionally more spending. What does not scale easily is the engineering team that keeps the codec improving. That expertise cannot be hired quickly or built up by spending more money, so the quality edge that justifies everything else is capped by a small group of people.
What external forces can significantly affect this company?
China blocks international video conferencing platforms, which cuts off that market entirely and forces Zoom to operate with a split, geographically segmented user base. In Europe, GDPR rules require strict data handling and localization, and healthcare customers everywhere face HIPAA encryption and storage requirements — both of which add infrastructure complexity and cost. The growth in remote work has driven demand for Zoom's product, but it has also drawn the attention of regulators watching for companies that become too dominant in workplace software.
Where is this company structurally vulnerable?
If the core codec engineering team breaks apart — through people leaving, a rival company buying them out, or gradual attrition — the bandwidth advantage disappears. Once Zoom's call quality looks no different from a standard H.264-based competitor, the companies that wired Zoom into Salesforce, tied it to their Active Directory login systems, and moved their phone numbers into Zoom Phone would no longer have a strong reason to stay. The switching costs that kept them in place would suddenly feel worth paying.