Zoom to Acquire Five9

Zoom Video Communications will acquire Five9, a provider of intelligent cloud contact center solutions, in an all-stock transaction valued at approximately $14.7 billion.

The deal will result in the combination of Five9's Contact Center as a Service (CCaaS) solution with Zoom's broad communications platform, which industry insiders expect will transform how businesses connect with their customers, building the customer engagement platform of the future.

The acquisition is also expected to help enhance Zoom's presence with business customers and allow it to accelerate its long-term growth opportunity by adding the $24 billion contact center market. Five9 is a pioneer in cloud-based contact center software. The company has more than 2,000 customers worldwide and facilitates billions of customer engagements annually. The Five9 Intelligent Cloud Contact Center provides digital engagement, analytics, workflow automation, workforce optimization, and practical artificial intelligence.

"We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers," said Eric Yuan, CEO and founder of Zoom, in a statement. "Zoom is built on a core belief that robust and reliable communications technology enables interactions that build greater empathy and trust, and we believe that holds particularly true for customer engagement. Enterprises communicate with their customers primarily through the contact center, and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers. We are thrilled to join forces with the Five9 team, and I look forward to welcoming them to the Zoom family."

"Businesses spend significant resources annually on their contact centers but still struggle to deliver a seamless experience for their customers," said Rowan Trollope, CEO of Five9, n a statement. Trol;ope will become a president of Zoom and continue as CEO of Five9, reporting to Eric Yuan.

"It has always been Five9's mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way. Joining forces with Zoom will provide Five9's business customers access to best-of-breed solutions, particularly Zoom Phone, that will enable them to realize more value and deliver real results for their business. This, combined with Zoom's ease-of use philosophy and broad communication portfolio, will truly enable customers to engage via their preferred channel of choice."

Sheila McGee-Smith, president and principal analyst at McGee-Smith Analytics, sees the acquisition as a huge boost for Five9.

"The acquisition gives Five9 access to a new kind of buyer. Today, Five9 primarily sells to line-of-business contact center decision makers, such as customer care management, sales, and service, making stand-alone CCaaS purchases. Combined with Zoom, they will have much better access to the thousands of companies worldwide making combined enterprise communications- and contact center-to-the-cloud decisions," she says.

Donna Fluss, president of DMG Consulting, sees this as a really good move for Zoom. "It's a good idea for them to enter the CCaaS market," she says, pointing out that Zoom already had strong cloud-based video, conferencing, and unified communications capabilities.

The deal, Fluss adds, further demonstrates the "growing importance of the contact center for businesses."

While the Zoom-Five9 news was unexpected, Fluss points out acquisitions like this are not all that surprising. "There are more than 200 CCaaS vendors in the market, and that's too many. Not too many vendors have the UCaaS and  PBX components that Zoom does. These are all really complementary technologies."

Acquisitions like the Five9 deal are something Fluss expects "more and more companies to start to do," pointing out the the CCaaS market is a $24 billion opportunity. "Adoption of CCaaS last year was only about 18 percent, so the opportunity going forward is huge," she says. "This could reap huge benefits for Zoom, for Five9, and for their customers."

The deal, Fluss adds, shows that Zoom "is turning more and more into a full business communications provider. And this is a reflection that this is turning into an omnichannel world."

Industry insiders are just as optimistic about what the acquisition means for the space.

“During the pandemic, we saw how Zoom’s platform enabled a whole new level of people connections between employees, friends, and families. With this acquisition, Zoom will empower businesses to use the power of cloud communications and AI to build those deep connections with consumers via their contact centers," says Gregg Johnson, CEO of Invoca, a provider of conversation intelligence for revenue teams. "It’s actually an unsurprising move when you think about it. Human-to-human conversations through phone calls and video-enabled interactions like telehealth remain the preferred communication method for consumers to trouble-shoot with businesses directly, and, in fact, during the pandemic, this was one of the only options for one-to-one connections.

"Now, as the economy reopens, brands need to solidify their customer touch points. Brands should be meeting consumers where they are and investing in the tools and technologies to help deliver simple, streamlined touchpoints. Cloud and AI-based technologies can help brands scale this effort and ensure deeper levels of engagement. Agents armed with the right customer insights and feedback are able to deliver better customer experiences, which lead to increased revenue," Johnson adds.