- As more white collar workers work remotely due to concerns over the coronavirus disease, COVID-19, companies like Zoom, Slack, and Dropbox could benefit from increased usage, analysts say.
- Zoom has already seen increased usage — and responded by lifting its 40-minute limit for callers using the free version of the software in China.
- Some analysts note that software companies aren’t typically affected by what’s happening overseas or in China, because they don’t have to worry about supply chains, like other tech companies.
- Companies that enable remote work and communication may benefit from coronavirus, analysts predict.
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As concerns over the coronavirus disease, COVID-19, increase, companies are enforcing more rules and restrictions on where employees can travel — and allowing more people to work from home. In order to stay productive, home-bound workers could use more cloud software apps that help them communicate and collaborate with their coworkers.
While the rest of the market is plummeting and companies are cancelling conferences and revising revenue guidance because of coronavirus concerns, cloud software companies like Zoom, Slack, and Dropbox could actually benefit from increased usage, analysts say.
Zoom has seen increased usage as a result of the coronavirus outbreak. Wall Street firm Bernstein Research estimates that Zoom has already brought in more new active users this year than last year due to coronavirus, according to CNBC.
In response to to the increased usage, Zoom lifted its 40-minute limit for callers using the free version of the software in China. Zoom’s CEO Eric Yuan, who grew up in China’s Shandong province, said he wanted to make a contribution to help those affected by the virus.
“We believe every business has the social responsibility to contribute back to the community and to society, and it’s critically important during times of crisis,” Yuan wrote in a blog post. “With this tenet in mind, Zoom is doing everything we can to provide resources and support to those navigating the coronavirus outbreak.”
RBC analysts highlight that companies in the software space typically are not affected by what’s happening overseas or in China, whereas other technology companies may have supply chains in China.
“In general the software space has low direct exposure to China. We’d highlight the WORK, ZM, SMAR, DBX group as potentially benefiting from COVID-19, if it benefits the greater remote work trend,” Alex Zukin, an analyst at RBC, writes in a report, referring to companies like Slack, Zoom, Dropbox and Smartsheet.
Analysts at Baird agree with that assessment and think that companies that make communications and collaboration tools are poised to do well as more white collar workers need to work from home. They highlight Zoom, whose stock has skyrocketed since the coronavirus crisis first started.
Not only will it help Zoom in the short term, but it would also cause people to change their behavior and use tools like video conferencing more frequently, Will Power, an analyst at Baird, argues.
“There’s now little question that Coronavirus is driving near-term opportunities, but increasingly could drive longer-term behavioral changes that include more video conferencing,” Power writes in a research note published Friday.
While Zoom has been getting a lot of attention for being a tool that enables remote work, Power says Slack can also help teams that need to work remotely and continue to collaborate. Slack’s stock has not seen the rise that Zoom’s has due to coronavirus.
Power also says Everbridge, a cloud based tool for emergency notifications, is getting more attention due to coronavirus concerns.
“[Everbridge] provides cloud-based mass notification and critical event management platforms that help corporate and government users keep employees and citizens safe, in addition to tracking supply chain and business risk events. Events like Coronavirus drive awareness of the products and opportunities,” Power said.
Companies that help provide the technology to build new tools, such as Twilio and Vonage Holdings’ APIs for video, are also poised to do well, Power argues, because they can help make it possible for doctors to provide care using video communication tools.
As of Friday, the coronavirus has spread to every province and region in China as well at least 56 other countries. While China, where the virus started, has been seeing a dropoff in new cases, the virus has been affecting more people in other countries.
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SEE ALSO: Video-conferencing company Zoom lifts the limit on its free version in China because so many people are using it amid the coronavirus outbreak
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