Zoom Acquires Cloud Contact Center as a Service Five9
Zoom Video Communications is acquiring Five9, a provider of cloud-based contact center software that’s delivered as a service (SaaS). The deal’s price tag is $14.7 billion.
This is technology M&A deal number 425 that ChannelE2E has covered so far in 2021.
The deal is complementary to the Zoom Phone strategy, the buyer says. Moreover, Zoom and Five9 will pursue cross-selling opportunities to each other’s respective customer bases.
Zoom-Five9 Rivals, Market Opportunities
Key Five9 rivals include 8×8 Contact Center, AWS Amazon Connect, Cisco Systems, Content Guru, Evolve IP, Genesys Cloud, Lifesize/Serenova, NICE inContact, Odigo, Puzzel, RingCentral, Talkdesk, Vocalcom, Vonage Contact Center and Worldline, according to various Gartner research reports.
In some ways, Zoom also competes with MSP-centric UCaaS (Unified Communications as a Service) companies such as Cytracom and BVoIP.
Demand for UCaaS services is strong. Indeed, the UCaaS market is expected to expand at a compound annual growth rate (CAGR) of 23.6 percent from 2021 to 2028 — reaching $210.07 billion by that time, Grand View Research predicts.
Zoom Buys Five9: M&A Deal and Partner Details
Once the deal closes, Five9 will be an operating unit of Zoom, and Five9 CEO Rowan Trollope will continue to lead that business and president of Zoom, reporting to Eric Yuan.
Both Zoom and Five9 have been expanding their respective partner programs. In fact, Five9 announced its first Partner Sales Summit in January 2021. The company’s parter ecosystem has two categories:
- Technology partners, including AI, CRM, ISV, unified communications and workforce optimization companies.
- Channel partners, including authorized resellers, master agents, solutions providers, systems integrators and referral program partners.
It’s unclear how the M&A deal will impact Five9’s existing partnerships with Mitel, Nextiva and other cloud communications companies.
Meanwhile, Five9 has also been in growth mode. The company’s revenue was $137.9 million in the first quarter of 2021, up 45 percent from $95.1 million in the first quarter of 2020, Five9 disclosed in April 2021. Also, GAAP net loss was $12.3 million in Q1 of 2021, compared to a GAAP net loss of $7.4 million in Q1 of 2020, the company also said in April 2021.
Zoom Acquires Five9: Executive Perspectives
In a prepared statement about the deal, Zoom CEO Eric S. Yuan said:
“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. 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.”
Added Five9 CEO Rowan Trollope:
“Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers. 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.”
The deal is expected to close in the first half of calendar year 2022, Zoom said.