Zoom acquiring Five9 is a “no-brainer,” Eric Yuan, Zoom’s founder and CEO said during an investor webinar Monday. Yuan and Five9 CEO Rowan Troloppe fielded questions about the  companies’ new deal.

The acquisition, worth roughly $14.7 billion, is an all-stock transaction, the companies disclosed Sunday evening. By acquiring Five9, Zoom can extend its global communications network with a cloud-based contact center as a service, (CCaaS). The acquisition also seeks to ease the path to bringing video communications to the contact center.

After the deal closes, Trollope will become president of Zoom and remain Five9’s CEO.

Zoom’s Eric Yuan

“I think it’s a no-brainer to join forces together,” Yuan said on Monday morning. Yuan and Troloppe are longtime colleagues. Both are veteran senior Cisco executives, and they speak frequently, Yuan said.

“We’ve already been working together for a while; this is really about growth opportunity for a future,” Yuan said.

Zoom and Five9 formed a technology alliance in 2019, providing integration with Zoom Phone and the Five9 contact center.

Poised for Growth

Zoom CFO Kelly Steckelberg said the acquisition of Five9 will bring it an addition $24 billion total addressable market (TAM) opportunity.

Zoom’s Kelly Steckelberg

“It will allow us to cross sell Zoom Phone to Five9 customers and bring the contact center to Zoom’s largest customers,” Steckelberg said. “We will leverage our global brand and international customer base to generate additional prospects.”

Zoom experienced momentous growth during the past 18 months, fueled by the pandemic. From the outset of COVID-19, Zoom became the virtual communications platform of choice. Acquiring Five9 can help accelerate the nascent Zoom Phone business, Troloppe said. Notably, the combined company can target the large market for replacement of legacy phone systems. Often those legacy replacements accompany contact center upgrades, Trollope said.

Five9’s Rowan Trollope

“That’s really the biggest opportunity here, the millions and millions, tens, and even hundreds of millions of phones that are out there that have to be replaced,” he said. “And when you replace that phone system, you have to replace the contact center. “Our ability to bring those two things together is incredible.”

The combination also provides the opportunity to target the 500,000 Zoom Phone customers, to upgrade their contact centers, Troloppe added.

Bringing Video to the Contact Center

A potentially more lucrative opportunity over the long term is bringing Zoom’s meeting, chat and webinar capabilities to contact centers.

“That is going to be a huge, I think, opportunity in the future, one that I’m personally very excited about, to bring video into the contact center,” Troloppe said. “Even in the short term, there’s a tremendous amount of interest from our customers for simple use cases.”

Robin Gareiss, CEO of market research firm Metrigy, in a research note described the deal as a smart move.

“Zoom has lacked a [customer experience] offering of its own and needed one,” Gareiss noted. “Meanwhile, Five9 has been rapidly growing its cloud CX base and partnerships, but it doesn’t have its own UC platform. For example, Five9 has partnerships with AT&T, Mitel and Nextiva to deliver contact center solutions, along with numerous partnerships for artificial intelligence (AI), workforce optimization (WFO), CRO and other areas.”

Gariess noted a Metrigy survey that found 62% of would prefer to deploy an integrated solution from one provider. Yuan indicated the combined company will continue to support Zoom integrations with other CCaaS providers.

“If a customer has already deployed Talkdesk, Twillio or Genesys solutions, and also deployed Zoom Phone or Zoom Video, we would really like to further enhance that integration,” Yuan said.

Asked about how the deal will affect the companies’ respective go-to-market models, Zoom CFO Steckelberg said that is to be determined. Until the deal closes, the existing partnership between Zoom and Five9 will continue, she said.

“When we get to post-close, we’re working toward what will best serve our customers, which will likely be an integrated offering and an integrated go-to-market team.”