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New data points Monday bear out that digital tools like Zoom Video Communications Inc.’s teleconferencing software and Microsoft Corp.’s cloud-computing offering are seeing huge spikes in usage as the COVID-19 pandemic keeps workers housebound.
Zoom ZM, -0.54% is thought to be a key beneficiary of the novel coronavirus outbreak, which has forced more employers to experiment with remote-work tools. Shares have surged roughly 50% in the past month on the expectation that businesses and schools are increasingly experimenting with the company’s videoconferencing tools and might even stick around as paying customers after the public-health crisis subsides.
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The Zoom app is currently the top free offering in Apple Inc.’s AAPL, +2.85% App Store, and JPMorgan analyst Sterling Auty says third-party data indicate that daily usage was up more than 300% from before the pandemic forced workers into their homes.
The company’s daily active user count was up 378% from a year earlier as of March 22, while monthly active users were up 186%, according to data from Apptopia. The DAU and MAU counts were up by about 340% and 160%, respectively, when compared with data from the end of December, indicating that the rush of new users could be largely due to the ballooning work-from-home trend brought about by COVID-19, rather than traditional business growth.
A Zoom spokesperson said that the company doesn’t confirm third-party numbers and doesn’t provide updates on usage or sign-ups outside of its earnings commentary.
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Zoom Chief Executive Eric Yuan pointed to “a large increase in the number of free users, meeting minutes and new video use cases” during Zoom’s earnings call in early March, when many countries in Asia and Europe were in the midst of transitioning to remote work but most U.S. companies had yet to make the shift.
For Zoom, “the real question will be how much of this activity will convert to paid users over the short and long term,” JPMorgan’s Auty wrote in a note to clients. While he acknowledges that some businesses could revert to their old ways once the outbreak gets under control, he thinks the experience has provided a “wake-up call” to many enterprises about the benefits of remote work and the need to have an arsenal of digital tools in case of future disruptions.
The increase in usage of those products could put stress on companies’ infrastructure, but the shift to cloud computing seems to be picking up the brunt of that need. Microsoft Corp. MSFT, +7.03% announced Monday that it has observed a 775% bump in usage of its cloud offerings in regions that are following social-distancing guidelines. The company’s Windows Virtual Desktop product has seen growth of more than three times.
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Microsoft had previously disclosed fast growth for its Teams communications suite, which had 44 million daily active users as of March 19, up 12 million from just a week earlier. Rival Slack Technologies Inc. US:MSFT hasn’t provided an update on that metric since September, though Chief Executive Stuart Butterfield said last week that the company had 12.5 million “simultaneously connected” users on Wednesday.
A spokesperson for Amazon.com Inc.’s AMZN, +3.36% AWS didn’t provide numerical updates about the increased cloud-computing usage during the outbreak but said that AWS has “taken measures to prepare, and we are confident we will be able to meet customer demands for capacity in response to COVID-19.”
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Amazon shares have increased 3.4% over the past month, as the S&P 500 SPX, +3.35% has dropped 12%.
Other makers of video-communications products are seeing a surge in usage as well. Cisco’s CSCO, +3.86% Webex product, a rival to Zoom, hosted 50 million meetings in March as of Thursday evening, and the company expected to host at least 23 million more in the final five days of the month, according to a spokesperson.
LogMeIn Inc. LOGM, +1.15%, a maker of remote-connectivity software, disclosed Thursday that usage of its videoconferencing and meeting tools was up as much as 10 times from pre-outbreak levels earlier in the year.
