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Zoom bolsters platform play with App Fund

Zoom will invest $100 million in third-party developers to augment its app store. The company hopes new apps can differentiate it in the market, experts said.

Zoom has launched a $100 million fund to invest in companies building applications that extend the capabilities of its video-conferencing software. The fund is the latest move in Zoom's strategy of becoming a platform for hosting its software with a slew of third-party collaboration applications.

Zoom unveiled the Zoom Apps Fund Monday, saying it would make an initial investment from $250,000 to $2.5 million on select software developers. To qualify, companies will need a viable product and must demonstrate market traction, said Colin Born, Zoom's head of corporate development.

Zoom opened a marketplace for third-party apps, called Zoom Apps, or Zapps, last year. The apps run within the video-conferencing environment and perform tasks like messaging on Slack.

The use of Zoom video conferencing exploded during the COVID-19 pandemic. The company's platform strategy is to maintain significant growth by playing a more prominent role in business operations.

"Everybody wants to be a platform. [Vendors] don't want to be a stinkin' app," said Art Schoeller, an analyst at Forrester Research.

Eventually, the Apps Fund could become an incubator for potential acquisitions, said Irwin Lazar, an analyst at Metrigy Research. Providing developers with seed capital gives Zoom a chance to monitor their market performance.

"Often, these startups are able to develop their offerings more quickly than if they were products launched internally by a vendor," Lazar said.

Zoom rivals Cisco and RingCentral also invest in startups to build the ecosystems for their respective collaboration platforms.

Developing Zapps for Zoom
Zoom's $100 million Apps Fund will fund developers building applications for the Zoom collaboration platform.

Besides working with app developers, Zoom licenses a nonbranded version of its video-conferencing service for use in third-party websites and applications. The company launched the program in March 2021.

In other news, Zoom launched in-product privacy notifications to help workers understand who can save and share information from meetings. The reports will let employees know, for instance, who can see chat messages sent to everyone instead of just direct messages sent to specific meeting participants. According to Zoom, a soon-to-be-available update will show a privacy notification when anyone in a meeting uses an app, such as a scheduling tool or transcription service.

Zoom said the notifications enable employees to make informed decisions about whether and how they collaborate.

Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily News, Walpole Times, Sharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.

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