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    Home»Networking»Data Center»Zoom’s $14.7B acquisition bid for Five9 falls apart
    Data Center

    Zoom’s $14.7B acquisition bid for Five9 falls apart

    adminBy adminOctober 1, 2021No Comments3 Mins Read
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    Zoom’s $14.7 billion bid to acquire Five9, announced on July 18, has been rejected by cloud-contact center company’s shareholders.

    In a statement yesterday, Five9 said the deal was “terminated by mutual agreement,” and since the deal “did not receive the requisite number of votes to approve the merger” Five9 will continue to operate as a standalone company.

    Zoom CEO Eric Yuan said in a statement that while the company had looked forward to the potential partnership, “financial discipline is foundational to our strategy.” He said Zoom will continue to look for ways to boost value for shareholders and customers.

    Given the volatility in the collaboration market right now, it’s not a surprise the deal fell through, said Steve Blood, a VP analyst at Gartner. He also noted that the collaboration and contact center markets are very different.

    “Five9 is laser focused on customer experience – there was a risk the acquisition would disrupt that,” Blood said.

    The planned acquisition had highlighted Zoom’s ambitions for continued growth outside of its traditional area of expertise — enterprise videoconferencing.

    The failure could also pose a blow to the launch of the cloud-based video contact center Zoom announced at its 2021 Zoomtopia conference earlier this month.

    In her keynote speech at Zoomtopia, Heidi Elmore, head of UCaaS at Zoom, said that adding video to a contact center would allow agents to “connect with empathy” and build rapport and trust with customers.

    Blood, however, argued that while there may be a few use cases for video in customer services, there isn’t huge demand for this in cloud-contact center customer base. “Even if there is, digital customer service providers are adding real time video using WebRTC,” he added.

    And, Blood said, Zoom’s video technology is designed for multiple participants, which doesn’t line up well with the one-to-one relationship in customer services. “The primary initiative from our clients right now is to move assisted service customer engagements to self-service. Adding video assisted service engagements is very low on the priority list,” he said.

    Yuan said the failed acquisition shouldn’t affect Zoom’s overall plans, saying Five9 “was in no way foundational to the success of our platform, nor was it the only way for us to offer our customers a compelling contact center solution.”

    As for Five9, Blood believes the company will continue to thrive without Zoom, pointing to the fact that its year-over-year growth is exceeding the overall 32% level of growth shown by the cloud-based contact center sector.

    “There is so much continued growth opportunity for CCaaS players that remain laser focused on meeting the customer experience needs of their customers and prospects,” Blood said. “We believe it will be far easier to do this without getting distracted by the volatility of the unified communications and collaboration market.”

    Copyright © 2021 IDG Communications, Inc.

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