How Zoom Beat the Tech Giants

Google and Microsoft’s early decisions about video chat put them at a strategic disadvantage in the long run

On Wednesday, Google made its premium videoconferencing app, Google Meet, free for everyone. At the start of April, Microsoft’s Skype added a feature that allowed users to jump into a call by clicking one link. Both companies seem to be playing catch up to the suddenly popular Zoom, even though they’re dominant tech megacorporations that have been offering competing products for the better part of a decade.

For most of the early 2010s, Skype and Hangouts (which eventually became Meet) set the standard for video chat apps. So, how did Zoom come out ahead?

Microsoft and Google took a different approach to video chat than Zoom from the very beginning. Zoom launched as a single-feature app in 2011 that was focused mainly on video chat. The tech giants, meanwhile, launched group video chat as a feature attached to other services like Skype’s voice calling platform or Google’s doomed social network, Google+. In order to chat on Hangouts, users had to log onto Google+. To get in on a 10-way group video chat, users had to load up the bulky Skype desktop app. At the time it was a small burden, but it put both companies at a strategic disadvantage in the long run.

While the video chat features themselves worked well, the services to which they were attached struggled. Skype was unable to find footing as a general-purpose messaging platform as smartphones enabled new apps like WhatsApp, Facebook Messenger, and iMessage to join the market. These apps offered improvements over SMS-based texting, attracting millions of users to their respective platforms.

Then, in 2013, Facebook announced that it would offer free voice calling to all of its iOS users in the United States. The move was a quiet but devastating blow to Skype. While the latter was widely seen, at the time, as one of the better cross-platform voice and video chat apps, Facebook had snuck Skype’s core product into a messaging platform with hundreds of millions of users that didn’t always need to communicate via voice. It was no longer enough to offer one type of communication feature. A successful platform in those days, and at the scale Google and Microsoft operated on, had to offer everything.

It was a message Google heard loud and clear, if a little too late. Shortly after Facebook launched free calling, the search company announced it would break out Hangouts into a stand-alone service that would unite text, voice, and video calls under one app banner. Unfortunately, Google’s strategy of maintaining multiple versions of the same product undermined that plan. It kept Google Talk alive until 2017, even after launching Allo, another new instant message app, in 2016. Google shut down Allo in 2018.

Microsoft and Google’s history with video chat over the last decade paints a picture of two companies struggling to find the right audience.

By 2015, neither Hangouts or Skype were doing well compared to their consumer-focused messaging competitors. Meanwhile, a new threat was looming on the horizon.

Slack had entered the chat.

The work-focused chat service aimed to take over the business messaging market at a time when long email chains and clunky collections of instant messages were the best options available. Microsoft and Google both held strong positions over aspects of the enterprise market — with Office and G Suite respectively — and so, having failed to get consumers on board with their texting apps, opted to pivot their chat platforms to enterprise.

Group video chat came along for the ride. Most major messaging apps at this point had some form of one-to-one video calling, and getting many users together in one video chat was a niche case and not one that users liked all that much overall. Arguably, the enterprise context made more sense for group video calls, since it allowed remote meetings and quick face-to-face discussions among a team, where communicating business plans via text was inefficient.

In 2017, after telegraphing the move for nearly a year, Google launched the poorly named Hangouts Chat and Hangouts Meet. Chat was a Slack-like chat room program, while Meet was a videoconferencing app that most closely resembled both the original Hangouts feature launched in 2011, as well as the Zoom calls of today. While Google still technically offered video chat through the consumer-focused Hangouts, the company has been hinting that it would eventually retire Hangouts for G Suite users since 2018.

This makes the move to offer Google Meet for free to all users with a Gmail account all the more jarring. Right now, Google is offering two competing video chat services, both of which were — at least until recently — branded Hangouts.

Google doesn’t specify how many people use Chat (although it reports 6 million businesses pay for G Suite, which includes the service) but Microsoft’s Slack competitor, Microsoft Teams, is doing very well. After launching publicly in 2017, it quickly surpassed Slack in daily active users by late 2019 and has also seen a massive surge in daily users over the last month as remote work has increased.

But, like Google, Microsoft spent years maintaining multiple video chat offerings. Teams included video chat at launch. The company also offers the feature through Skype for Business, which the company said in 2017 it would phase out by 2021, though it’s still available for companies that use it. Finally, there’s the video chat function of the basic consumer-focused Skype app.

That means, right now, if you wanted to conduct a group video chat through a Microsoft property, you have three different options, and two of them are called Skype.

By the time the coronavirus pandemic landed, both Google and Microsoft’s best video chat features were either attached to consumer products that users no longer wanted, or locked inside enterprise-focused products that were too cumbersome to set up on the fly. Whether the video chat itself was any good was irrelevant. The platforms they were attached to were fundamentally designed for the wrong audience for the time.

Neither company was in a good position to capitalize on a sudden and unpredictable spike in demand for videoconferencing features. But they were in poor positions in part due to chasing a market they never quite caught up to. Microsoft and Google’s history with video chat over the last decade paints a picture of two companies struggling to find the right audience. First, they built videoconferencing apps while users needed texting. Then they pivoted to building texting apps while users need enterprise group chat. Now they’re turning their enterprise group chats toward videoconferencing.

Making a single good feature just isn’t enough to guarantee success in a market where platforms are king. Except, as Zoom has demonstrated, when it is.

Eric Ravenscraft is a freelance writer from Atlanta covering tech, media, and geek culture for Medium, The New York Times, and more.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store