Speaker 1: This is Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio, and the cover story of Bloomberg
Speaker 1: Business Week magazine is all about Zoom, and as we
Speaker 1: talked about earlier with our own Drake Bennett and Joel
Speaker 1: Weber of Business Week. You know, I didn't know what
Speaker 1: Zoom was. I now know what it is. I've created
Speaker 1: my own conferences, you know, my own calls with family
Speaker 1: I've done. That's saying something about ease abuse, isn't it? Yes,
Speaker 1: because I'm not, as most folks know, UM, not so
Speaker 1: good when it comes to technology. That's not an expert.
Speaker 1: You're very proficient. But but I don't think anybody sent
Speaker 1: that because in college I would run the board. I
Speaker 1: did really well. I'm actually, you know, not so bad.
Speaker 1: Everybody just likes to jump on me. Um. All right,
Speaker 1: But check it out. Zoom in a in a market
Speaker 1: year where there has been so much volatility and most
Speaker 1: names are down for the year, shares of Zoom the
Speaker 1: usage is up and the stock is up eighty three percent. Jason, Yeah,
Speaker 1: it's really really interesting to watch. And I have to
Speaker 1: say I was on a Zoom call, uh with an
Speaker 1: investment banker friend earlier, and you know, because it's nice
Speaker 1: to see people, and I think that we're going to
Speaker 1: get a conversation and it works really well. Ready, bunch element.
Speaker 1: I kind of love if you've got a bunch of
Speaker 1: people on there. And he basically said, he's like, listen,
Speaker 1: I'm spending more time on Zoom than with my family
Speaker 1: at this point. And that's saying something because we're all
Speaker 1: spending a lot of time with our families. But you know,
Speaker 1: a lot of companies have have set this up. It
Speaker 1: is a way that they are communicating with each other.
Speaker 1: You know, it's interesting to hear from and I don't
Speaker 1: know what platform they're using, but to hear from Simon
Speaker 1: Allen about the power of video and the fact that
Speaker 1: he is taping videos that he's pushing out to his
Speaker 1: staff updates. I do think, you know, we get so
Speaker 1: used to seeing people that it is nice to see people.
Speaker 1: It's nice to see you. You know, we have our
Speaker 1: little system here set up. You're the only person that
Speaker 1: I get to see UH on the show, and I
Speaker 1: get to see you roll your eyes. I know you do. Indeed,
Speaker 1: all right, we do want to get to the cover story,
Speaker 1: UH that we said, it is about Zoom, which has
Speaker 1: gone from conferencing app to the coronavirus pandemic social network.
Speaker 1: It has led to a soaring of both usage demand and,
Speaker 1: as I mentioned earlier, zoom stock price. It's also led
Speaker 1: to some concerns about privacy and use of data about
Speaker 1: the app. But we're gonna get into all of this.
Speaker 1: Eric Uan, Uh, you want to excuse me. It's founder
Speaker 1: and CEO of Zoom. He joins us on the phone
Speaker 1: from San Jose, California. Eric, so great to have you
Speaker 1: here with us. Um, welcome to Bloomberg. You, your family,
Speaker 1: everybody's doing okay? Yeah, thank you for having me. Yeah,
Speaker 1: thank you so much. So talk to us about Zoom.
Speaker 1: As I kidded earlier, I didn't know about it. Now
Speaker 1: I've been on many Zoom calls. I've done a yoga class,
Speaker 1: organized family meetings. Uh that where I've got family. I'm
Speaker 1: a large family across the country. Talk to us a
Speaker 1: little a little bit about usage and the demand that
Speaker 1: you're seeing. Yes, well, first full you know, when we
Speaker 1: start it. And prior to these surprises, Zoom were beautiful
Speaker 1: serving the business and interprise customers and recently giving the
Speaker 1: usage from consumers or the consumer use cases. We had
Speaker 1: a two payward right to focus on those branding new users,
Speaker 1: branding new use cases because we really want to help out,
Speaker 1: you know, during the crisis and the uses for sure,
Speaker 1: it's it's much higher than before because you know, branding
Speaker 1: new users, branding new use cases from all over the world,
Speaker 1: and we're working extremely extremely hard and to handle all
Speaker 1: kinds of for its use like a capacity, the consumer
Speaker 1: use case, privacy, and the SWANSUL for us right, And
Speaker 1: I just want to put some numbers, Jason just before
Speaker 1: you jump in, because I know Draken mentioned you guys
Speaker 1: had about ten million daily users in December. That number
Speaker 1: now is Jason about two million. Yeah, it's amazing. And
Speaker 1: so how do you cope with that? Eric? And in
Speaker 1: terms of just the physical capacity the infrastructure that you
Speaker 1: needed to get online and presumably get online very fast.
Speaker 1: And first of all, it's extremely extremely hard. We have
Speaker 1: to train the software, but it was more important that
Speaker 1: actually really really preciated a two of our partners. With
Speaker 1: all of those two partners, well, I think we cannot survive,
Speaker 1: you know, every night when you need ddit, you know,
Speaker 1: saws out in the service. And then Andy the CEU
Speaker 1: of A W. S. Amazon. You know, it did a
Speaker 1: great job because the team structure really haled us, and
Speaker 1: the Oracle Larry and A Suffer their Utible club also
Speaker 1: haled us a lot. I think those two greater partners
Speaker 1: and really help us to scale our backing and give
Speaker 1: us a more compacity Without an Amazon, without an Oracle,
Speaker 1: I think you know we are we already have a
Speaker 1: huge full. Well, it's interesting. I mean it sounds like
Speaker 1: you you went right to the top there. I mean
Speaker 1: that just sort of shows you the the interest in
Speaker 1: this in in many ways and the importance of your
Speaker 1: partnership for those companies they see you as as obviously
Speaker 1: just driving a huge part of the economy that has
Speaker 1: gone virtual rather than than physical. It sounds like you
Speaker 1: are right. I would say I would be able to
Speaker 1: credit it. You know, the Amazon and Oracle. They you know,
Speaker 1: especially Oracle, they did it procatively in order for for
Speaker 1: any business. They just want to help because this is
Speaker 1: a you know, crisis. You know, they wanted to all
Speaker 1: they can to help. They look at what do we need?
Speaker 1: They did everything proacatively to help us, you know ND
Speaker 1: as well the Amazon as well. I think this is
Speaker 1: the time to show the corporate social responsibility and nobody
Speaker 1: is talking about you know, seals, the marketing or anything else.
Speaker 1: This is a greater, you know, a greater role model
Speaker 1: for many companies to follow. So Eric, you know, the
Speaker 1: usage numbers and the increases are just unbelievable. Uh, And
Speaker 1: I am curious how much of what's happening today do
Speaker 1: you think translates into longer term usage trends, especially once
Speaker 1: we get on the other side of the virus. That's
Speaker 1: a great question for now, and we really really do
Speaker 1: not think about that. The reason why now the number
Speaker 1: of priorities maxtro sory that existing uses fixed, all the privacy,
Speaker 1: any potential security use and because this is a critical time,
Speaker 1: this is a crisis. As long as we can keep
Speaker 1: the currnity you know, working from home already ware charity
Speaker 1: to have every Americans and you know, okay at a
Speaker 1: home and also make sure the hype of the economy
Speaker 1: that's our top of arty regarding the future and what's
Speaker 1: going to happen with really the doll folks on that.
Speaker 1: We also do not the folks on monetization either. I
Speaker 1: think it's time for us to really help out to
Speaker 1: help the economy, to help the society. So, Eric, what
Speaker 1: we have to talk about the education side of this UM.
Speaker 1: I know that you have taken some criticism here in
Speaker 1: New York City and elsewhere for some privacy concerns, especially
Speaker 1: because it is being used so heavily in a classroom
Speaker 1: of virtual classroom setting. Help us understand what happened and
Speaker 1: what you had to do in response. Yeah, when we started,
Speaker 1: actually we jumped on the uh you know, too quickly
Speaker 1: because Friday school shot down. Were working so hard all
Speaker 1: the way we can. Hey, let's do something to have
Speaker 1: the new community and ad a capacity. Let's all for
Speaker 1: the free caredle school access. I think we have a
Speaker 1: good intention. Unfortunately, you know, our service was beautiful serving
Speaker 1: indervise customers. We have all kinds of security features beauty
Speaker 1: in normally the enterprise I T team, they will decide
Speaker 1: which feature to enable, which features to visible and treat
Speaker 1: the users before they come on board. And for those
Speaker 1: of schools. So I think we many mistake. You know,
Speaker 1: we should not not only do we offer service, but
Speaker 1: also shouldn't play a I T room for them. You know,
Speaker 1: on de Went we should enable password. On devent we
Speaker 1: should have disable. Attendee shared on de went we shouldn't
Speaker 1: enable waiting room, but afther to learn that we took
Speaker 1: you know, we took quick actions already and this issue,
Speaker 1: those issues already fixed. And but New York in the cities,
Speaker 1: public school where steering the process working together with them
Speaker 1: because you know a lot of public schools and in
Speaker 1: New York they all working workers, gather with us directly
Speaker 1: and if they wanted to manage, you know, more like
Speaker 1: manage all the schools with the monster account to make
Speaker 1: sure enforced the security setting right, I think they are
Speaker 1: doing the right scene and then in the process still
Speaker 1: working together with us now, so you know, some of
Speaker 1: the other concerns were I mean, Taiwan was concerned about
Speaker 1: UM data that was going through UM and traffic that
Speaker 1: was going through Chinese data centers. From what I understand,
Speaker 1: you folks have said that you mistakenly sent that traffic
Speaker 1: through UM. Has that stopped completely that company is talked
Speaker 1: about Friday. I want to clarify that it's not all
Speaker 1: every medium center to China. Just that's why people, I
Speaker 1: guess probably agreed that the heightl and news and in
Speaker 1: the future after reread and it's standarbod skiing on hopefully
Speaker 1: have the in the tunity this impact. The problem is
Speaker 1: we have a global dishuman medium center. So if you
Speaker 1: and I would have a meeting here, suppose both of
Speaker 1: us we should connect to our usc defender. But in
Speaker 1: extremity rare casius and then the one for the attendee
Speaker 1: headed a connection problem and will try to many many
Speaker 1: times go back to our back copet, get back competata
Speaker 1: center backup. But data center has a complication problem. And
Speaker 1: also the store in China also there, so meaning in
Speaker 1: the rare where it keeps it. It's by the way,
Speaker 1: it's a random, it's where we're random. Also that's our
Speaker 1: Zoomer China data center. Plus we also know which meeting
Speaker 1: water time, which participant had a connection problem, you know,
Speaker 1: looking through our zoom China data center. We have all
Speaker 1: those information. And this is to already completely fixed, not
Speaker 1: a liken you know, all the data to standards to
Speaker 1: China or in something like this there's a piping. No,
Speaker 1: it's a completed random. We have all those logging data.
Speaker 1: So that's why we have a high competence. I guess
Speaker 1: they may not do that. But now well and let
Speaker 1: me ask you too. I mean, I'm curious what your
Speaker 1: responses to the news that Google, um SpaceX Tesla they're
Speaker 1: not allowing employees to use Zoom because I think some
Speaker 1: of what you said about with privacy concerns or other
Speaker 1: problems is it's because it's non business users who don't
Speaker 1: know how to set things up securely. These are companies
Speaker 1: that certainly know how to do that. So what's your
Speaker 1: response to those companies not allowing their employees to use Zoom? Yes,
Speaker 1: beastly was our customers before and also and I think
Speaker 1: even before this, because you know, we made a mistake,
Speaker 1: you know, our iPhone plan and embedded uh you know
Speaker 1: Facebook as DK and you know some of the you know,
Speaker 1: not a sensitive or personal human mintion, you know, send
Speaker 1: it out And that's the reason why you know, even
Speaker 1: before this, you know this is this they feel like, hey,
Speaker 1: we need to really focus on those kind of problems.
Speaker 1: I think that's why we are going to freeze any
Speaker 1: new features in the three months with double down troop
Speaker 1: down on those uh, you know, the issues. And I
Speaker 1: think we are going to win the truster back and
Speaker 1: you know that's uh, we are going to work at
Speaker 1: ten times harder and to win the trusterback for those users.
Speaker 1: And so Eric, you know, another sort of looking ahead
Speaker 1: question in the sense that I think we all agree
Speaker 1: to some extent or another that our lives, our world
Speaker 1: is fundamentally changed here. And I do wonder as more companies,
Speaker 1: you know, start to think about remote we're thinking about
Speaker 1: changes in commercial real estate. We're thinking about all these
Speaker 1: ways that that our lives have changed, how we communicate personally,
Speaker 1: how we communicate with with business. Look around the corner
Speaker 1: for us, how does this platform, how does your platform change?
Speaker 1: How do you sort of keep ahead of competitors in
Speaker 1: some ways? So that's a great question. I think because
Speaker 1: of this crisis, our copud, this crisis can in the
Speaker 1: world very soon. It's you know, so painful for airbe
Speaker 1: I think after this crisis, I think the way to
Speaker 1: work is very really be very very different. And the
Speaker 1: I will say, you know, to working from a home
Speaker 1: might have become as very common now, right and the
Speaker 1: cost you know, pH now more like a stress test
Speaker 1: to see if it's working from the home works on
Speaker 1: not I think it does to some extent. So and
Speaker 1: also the consumer use case and ability to use case.
Speaker 1: I think the bondary is not you know where you know,
Speaker 1: the career anymore. So that's why we need to really
Speaker 1: think about. You know, on the one hand, we keep
Speaker 1: serving our big in the best customer that's our focus.
Speaker 1: And also given that so many consumer use cases, you know,
Speaker 1: how to make sure we really balanced that it really
Speaker 1: fixed on privacy, really consecurity. Right, this is something you know,
Speaker 1: it's overnight. You know, we are facing this kind of
Speaker 1: problem and it's pretty tough, and we're taking these kind
Speaker 1: of things where versus so in terms of the privacy concerns.
Speaker 1: And also there were concerns about you sharing, you know,
Speaker 1: Zoom sharing data with other companies. Um, I think whether
Speaker 1: it was Facebook and some others, Um is that not happening?
Speaker 1: So the Facebook issues already fixed, I would realize in
Speaker 1: two weeks ago and within twenty four hours were to
Speaker 1: fix that. Essentially. That's uh, we invented the Facebook a
Speaker 1: SDK into our iPhone clad and we did not know.
Speaker 1: We did not know when we initialize as TK. You know,
Speaker 1: some of the device in the mission again not a
Speaker 1: personal sensitive emission and stand it to the Facebook. So
Speaker 1: we do not know that it's more like the software book.
Speaker 1: We always completely fixed that within twenty four hours. And yeah,
Speaker 1: so that easy order fixed. So we never wanted we
Speaker 1: we never have any intention to sell any consummate dangers
Speaker 1: with any other sort of party. So how do you
Speaker 1: I mean, I guess another future looking question here, Eric,
Speaker 1: This is a question that we're asking so many leaders
Speaker 1: that we talked to, entrepreneurs, investors, college presidents, everyone. We
Speaker 1: just spoke with the CEO of McGraw hill, who obviously
Speaker 1: is very familiar with your work being in the education space,
Speaker 1: and and we do wonder what does the world look
Speaker 1: like on the other side of this. You know, you
Speaker 1: mentioned work changing, you mentioned our our lives changing. But
Speaker 1: what are some ways maybe that we're underappreciating in terms
Speaker 1: of how the world will be different as we start
Speaker 1: to figure out this new normal. H That's a great
Speaker 1: question for now, actually for us, you know, seriously, we
Speaker 1: just you know, get a bit and make sure service
Speaker 1: people service off. And also baber Don Trooper, don't our
Speaker 1: investment of privacy and new with any potential security issues
Speaker 1: and all then those two things and uh, we we
Speaker 1: are really don't all have abandonmy is a single of that.
Speaker 1: It's because this is full of uncertainty. This is unpreced innate,
Speaker 1: and it's really hard. I know, everything is it's struggled.
Speaker 1: We also struggled right through the kind of never realized
Speaker 1: this kind of a youth case and the trafficer. So
Speaker 1: we we really do not have Bandamy is single. Would
Speaker 1: you know the future? Just you know, folcus on today,
Speaker 1: you know, keep a service off. But wait a minute,
Speaker 1: Wait a minute, Eric, you are someone who you know,
Speaker 1: anticipated the future that we would need a service like
Speaker 1: this that was easily usable. Do you anticipate though, that
Speaker 1: maybe when we get on the other side of the virus,
Speaker 1: that we do have a world where more people are
Speaker 1: much more comfortable talking this way. There's got to be
Speaker 1: some you know, you know, put on your futurist hats
Speaker 1: at some point you know that you see, you know,
Speaker 1: a different kind of future, or do you not. That's
Speaker 1: a great point. You're so right. We should and we
Speaker 1: really we should. But for now, we just you know,
Speaker 1: you know, put all the effort, you know, focus on
Speaker 1: the scitability and privates and you know, as I mentioned earlier,
Speaker 1: but this is a great point. I think you are
Speaker 1: right home. But this shouldn't be something we needed to
Speaker 1: think about it, you know where very quickly and seriously,
Speaker 1: I do want to ask you one thing because I
Speaker 1: am looking. You know, we're Bloomberg. We love numbers. You know,
Speaker 1: you are a company now with a thirty four billion
Speaker 1: dollar market cap at about six hundred and twenty two
Speaker 1: million in revenue. What is necessary for you to really
Speaker 1: grow into um that market cap valuation? What do we
Speaker 1: need to see from Zoom in the next six or
Speaker 1: twelve months for that to be justified? Because if you
Speaker 1: look at a pe ratio, it just doesn't make sense
Speaker 1: at this point. So what do you need to do
Speaker 1: to really grow those revenues to grow into that market cap?
Speaker 1: You know, I'm essentially I'm an engineer, right, so I'd
Speaker 1: like to focus on something you know that it can
Speaker 1: be and the our control for anything that out of
Speaker 1: our control. I really do not know what had happened,
Speaker 1: you know, even last year, you know, we've been a
Speaker 1: public and a publicly mention, you know, and the stock
Speaker 1: price high. Seriously, I had no idea, and maybe everybody
Speaker 1: to think that the future is about a video communication
Speaker 1: or not, I should have certainly I had no idea.
Speaker 1: If you ask for me, I posted to think that
Speaker 1: stop prices. It's so high. I mentioned that last year
Speaker 1: I would have been the public already, and I keep
Speaker 1: mentioning that, you know, for now it's still high. You know,
Speaker 1: I think you look at the p you're so right,
Speaker 1: and this is a number just ridiculous. I and again,
Speaker 1: this is all of our contol I never pretty attention
Speaker 1: to stop right. I would say, just to focus on
Speaker 1: the usual experience, focused on you know, make sure our
Speaker 1: customer happy. And the store prices will be taken care
Speaker 1: of in the future, but for the time being, we
Speaker 1: just to keep it working hard, focus on long term
Speaker 1: shareholder value. But the sort of the stop price, I
Speaker 1: really don't understand, really or not. All right, We're gonna
Speaker 1: leave it here. We really appreciate your time today. Eric
Speaker 1: Juwan is founder and CEO of zoom h. It's a
Speaker 1: company everybody is talking about. It's the cover story of
Speaker 1: Business Week this week. And I have to say good
Speaker 1: for him for taking a lot of of stuff head on,
Speaker 1: you know. I I have to say a lot of
Speaker 1: CEOs in this situation taking the criticism U that they
Speaker 1: have UH would sort of shrink back, and he is
Speaker 1: taking it head on and answering all the questions, and
Speaker 1: you know, this is a guy who certainly gives the
Speaker 1: impression that he's doing his best to solve these problems girl. Right,
Speaker 1: And with a technology company, you know, often something's out
Speaker 1: there for a while, you work out the kinks in it, right,
Speaker 1: that's just the way it happens. And it's with a
Speaker 1: smaller pool of users and they figure it out. And
Speaker 1: no small pool of users here, no, exactly right, it's
Speaker 1: just you know, UM taken off exponentially in terms of
Speaker 1: the number of users, and so the problems are also
Speaker 1: going to be exacerbated and we're going to hear a
Speaker 1: lot about them. But I am I agree with you, Jason.
Speaker 1: I'm really impressed to hear a CEO who just says, Okay,
Speaker 1: you know, we messed up some things. We're working on it.
Speaker 1: We we addressed it. Because that's reality. We can all
Speaker 1: relate to that. Yeah, it's refreshing when when the CEO
Speaker 1: comes on our show and basically says, yeah, we made
Speaker 1: a mistake, we messed that up, and then we fixed
Speaker 1: it and we're doing our best. We're talking to this person.
Speaker 1: We're talking to that person to hear him talk about
Speaker 1: the stock price, right and say you know it's too
Speaker 1: high ridiculous. Yeah, I'm going to tweet out exactly because
Speaker 1: it was pretty impressive. Alright, you're listening to Bloomberg business Week.
Speaker 1: I'm Carol Masser along with Jason kelly Er. Thanks again
Speaker 1: to uh Eric Uuan, the founder and chief executive officer
Speaker 1: of zoom. It is the cover story of Bloomberg Business
Speaker 1: Week magazine. I highly recommend, written by Drake Bennett and
Speaker 1: Nico grant Um. Definitely check it out because a very
Speaker 1: smart story and you learn a lot about that company.