Is Zoom’s One platform worth the cost? For many customers, the answer may be yes.
A little over a year ago, Zoom announced the Zoom One platform. Essentially, it bundles together options for team chat, phone, whiteboard, meetings, and other Zoom services into a single solution. Currently, Zoom offers six types of bundles that range from least to most robust. They include Basic, Pro, Business, Business Plus, Enterprise, and Enterprise Plus.
Zoom One competes with similar offerings from Microsoft, Cisco, 8×8, Five9, and numerous others. In the twelve months since the Zoom One launch, Zoom has attempted to gain market share by offering enterprise customers an opportunity to renew and migrate their existing licenses to Zoom One licenses for a slight increase in overall costs. But is this the right move for your organization?
Beware of Incremental Cost Increases
Since the dawn of enterprise IT selling, vendors have relied on bundling to drive revenue growth. “Look how much more you can do for just a few dollars” is a tried-and-true strategy, and a win/win for vendors and customers when there is a true need for all the bundled features. However, it can be a tactic to distract customers from seeing downward price trends on their existing portfolio of services.
In Zoom’s case, market pressure is on. The company is facing headwinds from Microsoft’s growing dominance. Growth within the company’s Enterprise segment is expected to slow to around 3% in the second half of this year. Rather than right-size the costs of the tools being used, Zoom is adding more tools for the same price or slightly more as a means to protect revenue.
The problem with small, often-overlooked cost increases is they compound over time to generate significant cost waste. This is particularly true for enterprises that aren’t closely monitoring usage. Not only does the risk of underutilization increase, so does the risk of being locked into higher spend agreements that drive up baseline costs for subsequent renewals. To reduce the risk of overspending and overbuying, savvy enterprise customers will want to take the following actions:
Analyze the Utilization of Existing Services
Before considering an upgrade to Zoom One, determine which Zoom services are already in use across your organization, how often and by whom. This will give you an accurate usage baseline to determine if the cost of Zoom One’s bundled functionality makes sense for your organization. It will also likely reveal opportunities to right-size usage based on actual demand.
Assess Solution Overlap
Analyze how the proposed new tools from Zoom overlap with existing tools from other suppliers. Does solution consolidation make sense for your organization? Would your company benefit from migrating non-Zoom voice services to Zoom? Model different cost and solution scenarios to determine the most economical scenario that realistically meets your organization’s unique usage requirements.
Renew Your Existing Agreement
Whether or not Zoom One is in your future, now is a good time to optimize your existing agreement with Zoom (also known as a “straight renewal”). Perform price benchmark analysis on Zoom’s offer to compare it against market. This will help you determine if you’re paying a fair price for Zoom’s solutions and give you the information needed to negotiate a world-class agreement. If Zoom One is an attractive offering for your business, you may even be able to drive savings mid-term.
Need assistance preparing for a Zoom purchase or renewal? NPI’s enterprise IT and telecom procurement experts can help. Contact us to learn more.
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