Zoom bets billions on home working continuing in Five9 deal

Video conferencing firm Zoom has struck a multibillion dollar deal to buy a cloud-based call centre operator in a bet on the future of hybrid working.

The firm announced the $14.7bn (£10.7bn) acquisition of Five9 in a blog post on Sunday.

Zoom boss Eric Yuan said the deal would allow its customers to "reimagine the way they do business".

It marks the firm's biggest takeover, and comes even though staff are beginning to return to the office.

Investors have been watching for clues as to how the firm would fare as social distancing restrictions lift and more people are vaccinated.

The pandemic, which prompted an abrupt shift to remote work for many businesses around the world, transformed Zoom into a household name practically overnight.

Zoom has said it does not expect growth to continue at the pace it enjoyed last year, but so far business remains strong.

The company expects sales to rise more than 40% this year, reaching more than $3.7bn (£2.66bn).

In the last three months of 2020, sales were up 370% compared to the same period in 2019, hitting $882.5m, it said in March.

The firm, which charges businesses for its remote meeting software in addition to more limited free use for the general public, said the acquisition of Five9 marked a shift in strategy. It is now prioritising its cloud-calling product Zoom Phone and conference-hosting product Zoom Rooms.

"This acquisition is... positioning us to accelerate Zoom's growth and play an even stronger role in driving the digital future, bringing companies and their customers closer together," its founder Eric Yuan said.

Five9's call centre software is used by more than 2,000 clients such as Under Armour, Lululemon and Olympus, and the deal is expected to be completed in the first half of 2022 having been approved by the boards of both companies.

"This is a high-priced deal which appears to attempt to build out the Zoom Phone offering," said Neil Campling, an analyst at Mirabaud Securities.

But he added: "Paying such a high price for a non-differentiated offering smacks of attempts to move into adjacent markets as Zoom fatigue sets in."

A question mark has been raised over the future of hybrid working, although other tech firms such as Google and Microsoft have invested in their video-conferencing offer during the pandemic.

But others such as global workspace provider IWG have said that they expect working from home some of the time will become the norm - especially as firms will be looking to save money and be more environmentally-friendly by using less office space.