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From a business model perspective, if Zoom embraced open-source, what would be their moat/value-add, compared to users downloading/forking from GitHub? Not bein

From a business model perspective, if Zoom embraced open-source, what would be their moat/value-add, compared to users downloading/forking from GitHub? Not being snarky: I'm genuinely curious what the "good citizen" (but still profitable) OS/FOSS model would look like, whether at equivalent revenue or reduced revenue.

tejtm 6y ago
It is not like no one ever came up with video chatting before and they are the only ones around so the moat is moot. The only reasons they exist in any meaningful way starts the "just works" thing and ends with the "vhs v.s betamax" thing. For the business model, it is the same as other OS, there are companies that want a tech insurance policy.
- skinnymuch 6y ago
  No other company right now can get the reliability and “just works” like Zoom. If they open source everything, why wouldn’t all the competitors including the biggest companies in the world not start seeing how Zoom is doing things. We already see open source “borrowed” frequently. Amazon’s AWS being a regular.
  - inetknght 6y ago
    > No other company right now can get the reliability and “just works” like Zoom. I disagree. Plenty of video chat software has comparable reliability and "just works"-ity. Google Meet, Skype, Microsoft Teams, Discord... Hell, Apple has had "just works" and "reliability" in their walled garden since FaceTime was introduced -- if you're willing to look only in their walled garden.
    - disgruntledphd2 6y ago
      I haven't tried discord, but all of the other tools that you mention are materially worse than Zoom, in my experience. Zoom is almost as good on a laptop as dedicated Cisco gear. I have been video conferencing mostly for work for almost a decade, and Zoom is the best solution for that that I've encountered. I recently changed roles, and the use of Zoom was a small reason to go with the company I did.
inetknght 6y ago
> From a business model perspective, if Zoom embraced open-source, what would be their moat/value-add, compared to users downloading/forking from GitHub? Not being snarky: I'm genuinely curious what the "good citizen" (but still profitable) OS/FOSS model would look like, whether at equivalent revenue or reduced revenue. The idea that a business needs a moat to be profitable is a problem endemic to business. The value add would be in hosting services and support contracts. Video chat is needed by a lot of non-technical people. Furthering, plenty of people don't have sufficient bandwidth to host their own video chat even with just their own friends or teams. Even technical people often don't understand how to write secure software.
- lukifer 6y ago
  > The idea that a business needs a moat to be profitable is a problem endemic to business. I'm pretty econ-left philosophically (socdem short-term, mutualist/ancom long-term), so you can't get much argument from me here. :) But I want to steelman the other perspective: so long as we live in a pre-post-scarcity market economy, having some kind of moat is part of how one gains bargaining leverage in a price negotiation. (Think of "moat" in this context as influencing cost/benefit incentives, rather than an absolute barrier: the customer could build a boat to cross it, or they could pay the toll to cross the bridge, with the latter being usually cheaper.) One answer is as you describe: hosting services and support contracts, in a market ecosystem of interoperable commodity services. Sign me up! But: such an ecosystem has a free-rider problem when it comes to the non-trivial expense of creating and maintaining the client software (including the risk of front-loading the 0-to-1 effort of building it before you know it will be adopted). In a FOSS model, other players in that ecosystem can obviously contribute to that effort, but those who don't contribute will have a competitive advantage, since commodity markets tend to viciously compete until margins are as near-zero as possible. There are "moats" / competitive advantages that have nothing at all to do with the software itself: superior support experience, brand reputation, efficient hosting services through economy of scale. So I don't at all claim your model is unworkable, and there are many successful companies who do just that. I don't disagree that the world would be a better place (and the overall economy perhaps more efficient), if most/all software was FOSS, and business models required less centralized control. (Note that nothing has stopped us from a building a pure FOSS E2EE VC client with a comparable feature-set; we still could.) But say I'm a board member or an investor in Zoom, whether pre- or post-success: how would you pitch me on the business value of open-sourcing the expensive-to-produce client software?
neodymiumphish 6y ago
Seems to work fine for 8x8, who maintain Jitsi.
- nopzor 6y ago
  8x8 is valued at about 1/10 of what zoom is worth, and has seen a declining valuation over the last 1 year. most of 8x8 revenue comes from sources and products unrelated to jitsi. so, i don't think you can say that it seems to work fine for them compared to zoom.
  - skinnymuch 6y ago
    Are the numbers different for you? 8x8 appears to have a market cap of $1.55B vs Zoom’s $67B. 40x difference.
    - nopzor 6y ago
      you're right. i remembered the numbers wrong. i think it just proves my point even further though.
      - skinnymuch 6y ago
        Yes for sure it does hah
- skinnymuch 6y ago
  Jitsi is a fraction of what they do and something they didn’t even own that long ago. The company is tiny, 42x less valued than Zoom and doesn’t appear profitable. It isn’t growing in the right direction at the moment. If anything, it is a reason for why Zoom shouldn’t do what Jitsi or 8x8 are doing.
yellowapple 6y ago
Enterprise support is the usual answer, and it'd probably work pretty well for Zoom given how many enterprises are already willing to pay Zoom for said support.
- nopzor 6y ago
  i don't think it'd work particularly well. people pay for zoom not because of 'enterprise support', but because they want features that they need (eg. meetings not automatically ending after 40 minutes).
  - inetknght 6y ago
    The two aren't mutually exclusive though
    - nopzor 6y ago
      how successful do you think zoom would be if their only value was support? do you think they'd be incentivized to create as frictionless a product as possible?
sverhagen 6y ago
This is not a complete answer, but they could still have a proprietary backend, yet give people a lot more trust by having open-source client applications. The idea being that forking would still require someone to build their own backend, making it only interesting for people that are willing to do a lot more in-depth engineering than just running an application.

tejtm 6y ago

It is not like no one ever came up with video chatting before and they are the only ones around so the moat is moot. The only reasons they exist in any meaningful way starts the "just works" thing and ends with the "vhs v.s betamax" thing. For the business model, it is the same as other OS, there are companies that want a tech insurance policy.

skinnymuch 6y ago
No other company right now can get the reliability and “just works” like Zoom. If they open source everything, why wouldn’t all the competitors including the biggest companies in the world not start seeing how Zoom is doing things. We already see open source “borrowed” frequently. Amazon’s AWS being a regular.
- inetknght 6y ago
  > No other company right now can get the reliability and “just works” like Zoom. I disagree. Plenty of video chat software has comparable reliability and "just works"-ity. Google Meet, Skype, Microsoft Teams, Discord... Hell, Apple has had "just works" and "reliability" in their walled garden since FaceTime was introduced -- if you're willing to look only in their walled garden.
  - disgruntledphd2 6y ago
    I haven't tried discord, but all of the other tools that you mention are materially worse than Zoom, in my experience. Zoom is almost as good on a laptop as dedicated Cisco gear. I have been video conferencing mostly for work for almost a decade, and Zoom is the best solution for that that I've encountered. I recently changed roles, and the use of Zoom was a small reason to go with the company I did.

inetknght 6y ago

> From a business model perspective, if Zoom embraced open-source, what would be their moat/value-add, compared to users downloading/forking from GitHub? Not being snarky: I'm genuinely curious what the "good citizen" (but still profitable) OS/FOSS model would look like, whether at equivalent revenue or reduced revenue. The idea that a business needs a moat to be profitable is a problem endemic to business. The value add would be in hosting services and support contracts. Video chat is needed by a lot of non-technical people. Furthering, plenty of people don't have sufficient bandwidth to host their own video chat even with just their own friends or teams. Even technical people often don't understand how to write secure software.

lukifer 6y ago
> The idea that a business needs a moat to be profitable is a problem endemic to business. I'm pretty econ-left philosophically (socdem short-term, mutualist/ancom long-term), so you can't get much argument from me here. :) But I want to steelman the other perspective: so long as we live in a pre-post-scarcity market economy, having some kind of moat is part of how one gains bargaining leverage in a price negotiation. (Think of "moat" in this context as influencing cost/benefit incentives, rather than an absolute barrier: the customer could build a boat to cross it, or they could pay the toll to cross the bridge, with the latter being usually cheaper.) One answer is as you describe: hosting services and support contracts, in a market ecosystem of interoperable commodity services. Sign me up! But: such an ecosystem has a free-rider problem when it comes to the non-trivial expense of creating and maintaining the client software (including the risk of front-loading the 0-to-1 effort of building it before you know it will be adopted). In a FOSS model, other players in that ecosystem can obviously contribute to that effort, but those who don't contribute will have a competitive advantage, since commodity markets tend to viciously compete until margins are as near-zero as possible. There are "moats" / competitive advantages that have nothing at all to do with the software itself: superior support experience, brand reputation, efficient hosting services through economy of scale. So I don't at all claim your model is unworkable, and there are many successful companies who do just that. I don't disagree that the world would be a better place (and the overall economy perhaps more efficient), if most/all software was FOSS, and business models required less centralized control. (Note that nothing has stopped us from a building a pure FOSS E2EE VC client with a comparable feature-set; we still could.) But say I'm a board member or an investor in Zoom, whether pre- or post-success: how would you pitch me on the business value of open-sourcing the expensive-to-produce client software?

neodymiumphish 6y ago

Seems to work fine for 8x8, who maintain Jitsi.

nopzor 6y ago
8x8 is valued at about 1/10 of what zoom is worth, and has seen a declining valuation over the last 1 year. most of 8x8 revenue comes from sources and products unrelated to jitsi. so, i don't think you can say that it seems to work fine for them compared to zoom.
- skinnymuch 6y ago
  Are the numbers different for you? 8x8 appears to have a market cap of $1.55B vs Zoom’s $67B. 40x difference.
  - nopzor 6y ago
    you're right. i remembered the numbers wrong. i think it just proves my point even further though.
    - skinnymuch 6y ago
      Yes for sure it does hah
skinnymuch 6y ago
Jitsi is a fraction of what they do and something they didn’t even own that long ago. The company is tiny, 42x less valued than Zoom and doesn’t appear profitable. It isn’t growing in the right direction at the moment. If anything, it is a reason for why Zoom shouldn’t do what Jitsi or 8x8 are doing.

yellowapple 6y ago

Enterprise support is the usual answer, and it'd probably work pretty well for Zoom given how many enterprises are already willing to pay Zoom for said support.

nopzor 6y ago
i don't think it'd work particularly well. people pay for zoom not because of 'enterprise support', but because they want features that they need (eg. meetings not automatically ending after 40 minutes).
- inetknght 6y ago
  The two aren't mutually exclusive though
  - nopzor 6y ago
    how successful do you think zoom would be if their only value was support? do you think they'd be incentivized to create as frictionless a product as possible?

sverhagen 6y ago

This is not a complete answer, but they could still have a proprietary backend, yet give people a lot more trust by having open-source client applications. The idea being that forking would still require someone to build their own backend, making it only interesting for people that are willing to do a lot more in-depth engineering than just running an application.