Zoom: Genius or Mad Scientist? Zeus Kerravala on the Bold Transformation Reshaping CX

The Principal Analyst at ZK Research breaks down whether Zoom's 'system of action' pivot is the real deal or just clever repositioning


In this CX Today discussion, Associate Editor Rhys Fisher sits down with Zeus Kerravala, Principal Analyst at ZK Research.

Zeus recently published a deep-dive on Zoom's strategic transformation, and the findings are more surprising than most in the industry expect. If you work in CX, contact center, or IT, and you still think of Zoom as a meetings tool, this conversation will change that.


Zoom has quietly built something most of the industry hasn't clocked yet. Zeus Kerravala joins CX Today to unpack what he calls the shift from “collaboration to completion” – and why it could fundamentally change how CX leaders think about their tech stack.

Further along than you think: Zeus argues Zoom is closer to its system-of-action vision than most realize, with Zoomtopia later this year likely to be a major milestone – though true end-to-end completion is still a couple of years out.

🔴 CX is where it gets real: From Chelsea FC to Caliber Collision, real customers are already using Zoom to eliminate cold calls, automate case logging, and unify the full customer journey – contact center included.

🔴 Conversation over CRM: Zoom is betting that conversational data is more valuable than what lives in a CRM, and Zeus thinks they might even build their own CRM within the next two to three years.

🔴 The biggest challenge isn't product: Zeus is clear, Zoom's hardest problem right now is getting people to understand what they've actually built. Proof points and customer outcomes will be the unlock.



Visit cxtoday.com for more coverage on Zoom and the contact center market

Read Zeus Kerravala's full blog at SiliconAngle.com

Follow ZK Research for ongoing analysis as Zoomtopia approaches

For more Customer Experience tech news visit https://www.cxtoday.com

Transcript

SPEAKER_01 0:07

Hello and welcome to CX Today. I'm Reese Fisher, Associate Editor, and today I'm delighted to be joined by Zayas Caravala, the principal analyst at CK Research. Zayas, thanks for joining me. How are you doing today?

SPEAKER_00 0:20

Hey everything. Hey, good. How are you doing, Rhys?

SPEAKER_01 0:23

Yeah, yeah, I'm really well, thank you. We've had some rare good weather in the UK, which we're all slightly enjoying and slightly moaning about, but uh that's just how we do things in the UK.

SPEAKER_00 0:34

Good weather in the UK means less cloudy and less rainy, right?

SPEAKER_01 0:37

Pretty much, pretty much that, yeah. Uh but no, I'm excited to speak today, you know. Um we're gonna be looking at we're looking at Zoom, I guess, more generally, but you you wrote this really interesting blog kind of looking at the company exploring this idea that it's it's kind of in the midst of a bit of a transformation, I suppose. And you know, you described Zoom as evolving into a system of action, you know, which is I guess a pretty significant pivot from you know what a lot of people still see as a video meetings tool. Where would you say they actually are in that journey right now? Kind of is it early instead halfway, or are they perhaps a lot further along than most people realize?

SPEAKER_00 1:16

I I think they are further along uh than I think most people realize. I I think first of all, people don't really understand uh in a lot of ways what they're doing. So the whole concept of collaboration to completion is historically Zoom and its peers was the company that allowed us to collaborate better, right? You and I would have a meeting, you know, we'd work on content together, then we'd go off and complete our work. In theory, right, since everything we said has been recorded, and uh which which is a whole nother uh you know thing to talk about, I suppose. Um uh if all our work is done in the same place and the whatever tool you're using has access to it, why can't it just go complete the work for you? Right? And so that's their end game, is that we could be having a call, talk about a PowerPoint we want to create for a sales presentation for a customer that we're doing tomorrow, and it should be able to go off and at least get 80% of the way there, right? And then maybe we go touch it up or something like that. And so um I I think they're you know, I don't think they're that far away from that. I would think by the time we see you know Zoom Topia come up later this year, um, which is only actually a few months away now, I guess, uh, we should see a lot more, you know, work uh uh the move a lot closer to that. I I think when will they get there to actually be doing completion? They're still probably a couple of years away from that, but they've they've certainly got a lot of the tools that you need now and the applications to allow you to do that, right? And so this is also it also answers the question, Reese, why'd they go out and do the things they do? Nobody, when they first announced they got the email that left people scratching their heads, right? Like when they got in the docs that left people to scratching their heads. They're not trying to build better mouse traps in that case is they didn't do email for email's sake, they did it for the data.

SPEAKER_01 3:12

Yeah, yeah. No, it's really interesting. Like you said, Zoom Topia, I think, is gonna be a definitely one to keep an eye on this year. I was just wondering, I suppose, from more of a more of a CX perspective, you know, if you are a CX or maybe even an IT leader, kind of evaluating Zoom right now, what are maybe those concrete kind of signals that they should be looking for that, you know, this isn't just maybe just repositioning language, that this system of action vision is kind of is real and is and can deliver.

SPEAKER_00 3:41

Yeah, well they um uh and and I think here's where companies need to rethink the concept of customer experience around AI and conversations, right? It's uh I I actually think where um their uh uh collaboration to completion can have the biggest impact with some companies, it is in the CX area, right? Because historically, um, I don't know, the name of the last time you had a call with a brand and you actually liked it, right? So um, you know, that that that's an area that itself, uh despite all the evolution of the technology, has not really been that great. So um, and uh uh you know, they gave uh some examples to some customers, Chelsea Football Club, uh Caliber Collision, uh Japanese customer called Renza that are using multiple Zoom products in their contact center um to be uh to allow the AI to do things like eliminate cold calls and uh you know uh be able to uh log cases, things like that. But there's uh you know, I I envision a day where if you're a brand, you you're uh a lot of the stuff the contact center does doesn't it doesn't have to do anymore because it it's fully automated. And so that that doesn't mean people go away. I just think the jobs changed to some perspective. But I think if you're a CX leader, you really need to take your I think legacy hat off your head and rethink what customer experience would could be if your contact center had access to all customer data, you know, interactions, preferences like that, right? And um uh, you know, even something as simple as, you know, if you're you know, uh think of a cable company and a customer just stops, you know, using more streaming and uh or you wouldn't see that, I guess, but what you would well you but you might if you're also their internet provider, but all the data signals are sometimes there for customers to to switch brands, things like that. And this would allow brands to go out and be a lot more proactive in the things that they do with their customers to make sure that they're always happy.

SPEAKER_01 5:51

Yeah, yeah, absolutely. Again, makes makes a lot of sense. I wanted to mention kind of in your blog that I spoke about earlier, you talked about the uh about how AI companion MAUs grew, I think, 184% year over year. My notes had hit 1.5 million users in four months. Obviously, really impressive stuff. I was just wondering, is there are there any other areas that you think people should be looking at that kind of as indicators that this transformation is actually is happening and it's landing?

SPEAKER_00 6:22

Yeah, what's interesting about those Reese is um they uh they've made it really easy to use, right? So if you're a Zoom user and I use Zoom, um AI companion and my notes and things like that just automatically are turned on. In fact, when I do a zoom call now, it's just do you want to record this in my notes? And so all you have to do is click yes and it's all it's all there. Uh I actually think the the other area to watch, and this will have um implications in the in in your area of of customer experience, it's just their their overall growth in contact center. The resellers I've talked to, um, and even customers initially were very skeptical that Zoom could actually be a credible contact center company, right? And I think what they've done, um uh, first of all, I think not buying 5.9 was the best thing that ever happened to them. Um, just because it gave them one native uh, you know, one common back end to do employee experience and customer experience. And they've done a good job of building on that. And so now they have their own. I I think you know probably things to watch are the adjacencies to Contact Center, you're right. They have their own workforce management now, they have you know quality metrics, they have all the tools they need to have to be able to actually displace a legacy contact center and replace some of their competitors when these contracts come up. And then they go and sell a lot of the products that are adjacent to it, right? Which um yeah, you know, which includes um uh uh uh you know ZVA and um um uh the the chat products, things like that. And I know there's more common. So I like I said, I'd expect to see between now and Zoom Topia to see a lot more products that surround the contact center that make it more usable for an agent that typically has to do a lot of heavy lifting.

SPEAKER_01 8:15

So yeah, I wanted to, I guess, pick back up on something you mentioned there. Obviously, Zoom, I guess it comes at the contact center in a bit different angle to a lot of his competitors. You know, it's this conversation as the system of record rather than kind of a CRM. Do you do you see that as kind of a genuine competitive advantage for the company?

SPEAKER_00 8:39

Yeah, now on that note, though, I think eventually they might roll off their own CRM. If I find a if if I was uh a Bettman, I would say in the next two, three years we'll see a Zoom contact center. But uh I do think they are trying to take a different approach to this, right? It's not the the problem with CRMs, is CRMs are are fine. What but the data in CRMs is often not fine, and that comes down to the fact that um um the the the way we've gotten data into CRMs historically has been through people. And people, you know, that's not exactly a fun task, right? To go populate your CRM. The conversations that agents and salespeople and uh you know BDRs and folks like that have with customers are what's valuable. And then if you can take that um uh and connect the dots between all those conversations and all the activities a customer does, um, that has a lot more insights in it than what your CRM data has. Now, there's a big overlap between the two Reese. Like there's no question that a lot of what a CRM does and a lot of what a contact center does, there's a huge overlap in that area, right? So, which is why I think they might move into that area. But they've clearly taken the value chain and they've made it the customer conversations, right, more so than the data that's populated in the CRM, which is a lot of administrative stuff and like that uh, you know, uh as well. But um, you know, they're squarely focused on the conversation, which is makes sense given their history.

SPEAKER_01 10:14

Yeah, yeah, of course. And I guess on that note of Zoom being this kind of differentiator in the market a little bit, I thought again in your piece you you spoke about Erkwan, make quite a uh a pointed statement, I thought this idea he doesn't see agent-to-agent communication as the future, he sees more humans staying at the centre, AI handling the follow-through. I guess in a lot of ways that that that runs counter to where a lot of the AI hype is going. I guess do you do you think he's right and what does that maybe mean for how enterprises should be building the AI strategies right now?

SPEAKER_00 10:49

Yeah, I've got mixed feelings on that. I think in practicality, like the we're we're hitting a um um we're hitting a point where agents can't talk to agents and and the the thing, the decisions they make are are fine. I do think they all still rely on human oversight, and I think that'll be the case for a long time. Um I think where agents can you know play a big role um is helping with a lot of minutia in the conversations that we have that you don't need to have status checks, things like that, right? And then ultimately that becomes data that you give to a person to help them make a decision. And you know, you think of um uh you know, if the everybody uses travel, an example, right? Like, or do you want an agent to go book all your travel for you, or do you want final say in yes, you know, book this flight, book this time, things like that. It's more likely than not that you're gonna want to have some look at it before it goes and does that. Now, down the road, we might fully trust it. I always use Google Maps as an example, right? Where the first time you use it and it tells you to take a different route home, you think that's crazy. I'm never, I'd never take that route. And then after you don't take the route a few times and you get stuck in heavy traffic, you start to accept what it tells you. And now when it reroutes you, you don't really go look. You just say, okay, fine, right? And so for a lot of low-value tasks like that, I could see agent to agent talking to each other and completing the task, where once you get up into the value chain, it's a little more higher value, that's where the agents become a data, uh a data feed for people to help them make better decisions. And I think, like I said, in customer experience, those are generally high value conversations that the people will do. So if you think about like all the conversations a cut customer has with a brand, anything that's high repetition uh or high frequency, low complexity, there's no reason a person should ever touch that, right? Reset passwords, account balances, where's my delivery? Um, but once you get a little more complicated, a little more high value, uh, that's where the the people will still have a role. So I think if you look at his comments, um he's not saying, you know, people will stay in the mix for all conversations, it's just that people have a role to play in this world of CX movement for. And I think that's the important thing.

SPEAKER_01 13:17

Yeah, yeah, agreed. Okay, makes a lot of sense. I guess the final question I had, Jeff is obviously you've you've mentioned things like you you predict they might pull out a CRM at some point in the future, but I was just wondering, you know, what in the midst of this transformation, what can we expect next from Zoom? Do you think, particularly, I guess, for a for a CX or contact center audience, what what updates or changes do you anticipate coming?

SPEAKER_00 13:41

Yeah, I would look for them to continue to build um vertical capabilities, either internally or through acquisition. Um, I think there's um a case to be made that um as AI matures, uh these general purpose models that we're we've all become accustomed to today hit a you know hit a limit in the value they can provide. And then eventually we need to bring in the specific nuances of healthcare, retail, legal, you know, entertainment, things like that. And so um uh there are um you know a number of companies out there, uh, you know, Supio and Legal, and there's healthcare, you know, with that have a lot of expertise in those areas. And so as Zoom builds up this product, this CX product of theirs and continues to move from collaboration to completion, one of the things that they're gonna need is um uh a better understanding of specific industries. And I think, and you know, you look at um with the work vivo acquisition, that gave them a good horizontal view of all frontline workers, whether it's a campus worker or a nurse or whatever. But now you've got to layer on the vertical expertise on that. And so I think that's what we should expect to see a lot of is industry-specific innovation that sits as a wrapper around the Zoom products and allows you to get that last step in the in the completion aspect.

SPEAKER_01 15:09

Yeah, thanks, S. Really, really enjoyed this chat.

SPEAKER_00 15:12

Anything, any, anything core though, they'll continue to build themselves, right? And that's why people were a little surprised they didn't go out and buy another contact center vendor, but that's part of the core communications capabilities. They'll build that and then they'll sprinkle in acquisitions that kind of kind of are adjacent to that, I think.

SPEAKER_01 15:30

Yeah, yeah, again, makes sense. Um, yeah, thanks again. I I really enjoyed the chat. I think I completely agree. Like you said, the jump. Zoom is, I think, in the CX space specifically, it's it's a very unique company, which makes it obviously a very interesting company. And it's gonna be really fascinating.

SPEAKER_00 15:45

Yeah, to me, they're the most they're really the most fascinating company in the space we track because they have diverged their product roadmap so widely from what the rest of the industry has, right? While everyone's trying to build you know the um more and more core capabilities, they've branched out into a bunch of areas that you wouldn't ever think uh you know we'd be in. In fact, you look at the bright higher acquisitions, HR tools, things like that. A lot of the things, you know, like I said, people were wondering why Zoom do this. And so Eric Yuan, their CEO, you know, he's he's either a genius or a mad scientist. And sometimes those two things are this, you know, the the same thing. They're just two sides of the same coin, right? So, you know, best of luck to them. I I do think that their biggest challenge is getting people to understand exactly what they've built and why they've built it. And the second part of that is then once people accept that, then the you will get more value from Zoom by going all in on Zoom. But there's so many competing products, Reese, that that barrier to entry is is actually a very big one.

SPEAKER_01 16:57

Yeah. Do you think do you think almost a message and issue a lot of the time with Zoom? Do you think that would be your kind of advice that sharpened that message so people understand better what they can deliver for people?

SPEAKER_00 17:09

Yeah, I think and I think one of the things I liked about the earnings call is they actually named a bunch of customers and talked about the value they got. And so we always talk about outcomes in this industry, but nobody does outcomes all that well. And so they're starting to do more of that. I think this is going to come down to proof points. And if um uh I think a lot of it will start with small businesses that may go all in on one vendor because it's more cost effective. But then if they start to get a competitive advantage that, you know, that's that's marked uh you know, that's that's marketly noticeable, that'll pull other companies into doing the same thing, right? There's a lot of copycat in the business world today, but um you know the the problem you have in large enterprises is they've all got these big multi-year contracts with you know the all the other vendors in the space. And so you've got to get through that cycle and you've got to create some demand from uh the users, the product to pull them in, right?

SPEAKER_01 18:09

So yeah, well, thanks again, Zayas. Like I said, it's always great to chat. Um uh maybe we'll we'll check in in a few months and we'll see how many of your predictions have come true. Um but yeah, really judges.

SPEAKER_00 18:20

Yeah. Well, I think as we even as we look at every every quarter uh now when they announce their earnings, is that's what I want to look for. I'm less concerned about how many seats did they add and how many minutes of usage they have, and more are they delivering the kind of cross-zoom value that they talk about. That that to me is a more important long-term metric than they had they added you know 10% more seats or something. Yeah.

SPEAKER_01 18:44

Yeah, yeah, absolutely. Um, yeah, great, great chat as always. I did also want to just uh quickly thank our audience as well for tuning in. If you enjoyed this conversation, and I'm sure you did, uh, please remember to like and subscribe to the channel and head on over to cstoday.com for more stories like this. Until next time, thanks for watching.