In its first billion-dollar deal, Zoom will be acquiring cloud contact center Five9. Five9’s market cap at closing on Friday, July 16, was $11.9 billion. The acquisition price of $14.7 billion makes a premium of 13%.
Initially released in 2012, the Zoom app rose in popularity during 2020. As businesses and individuals worked to find alternatives to in-person interaction due to Covid lockdown restrictions, Zoom’s revenue saw an increase of 362%.
Since its peak in October, however, Zoom’s stock has seen a drop of about 36%. With many sectors now reopening, plus rising competition from Microsoft Teams video chat, Zoom is looking for ways to stay ahead.
Five9’s usage saw a similar growth trend, with revenue up 33% in 2020.
The cloud-based contact center software met the demand of companies looking for call center technology that would allow employees to work from home.
Five9’s CEO Rowan Trollope remarked that they don’t have to “convince customers that cloud is an acceptable option anymore.”
The Rise of Cloud Capabilities
It seems the Covid pandemic and resulting restrictions have been a boon for cloud services at large. The difficult circumstances presented by restrictions have forced entities who were lagging to adopt new technology.
The most commonly used tool is, of course, cloud storage, allowing people or businesses to access stored data from anywhere.
The pandemic isn’t the only threat that has led to the adoption of cloud technology. An increase in ransomware attacks has seen many taking advantage of cloud backup services to protect their data or recover it in an emergency.
While this is Zoom’s first billion-dollar acquisition, the diversity of cloud tech means it likely won’t be its last. The deal is set to go through in the first half of 2022.