The stock market rebounded on Wednesday, fighting back against coronavirus fears and instead focusing on the potential for economic recovery across the globe. The Dow Jones Industrial Average and S&P 500 traded lower for a few moments during the day, but by the end, they joined the Nasdaq Composite with gains of as much as 1%.
Today’s stock market
Many of the stocks that performed well today are providing essential services that businesses and consumers need badly because of the COVID-19 pandemic. Remote work has become a massive trend, and both Slack Technologies (NYSE:WORK) and Zoom Video Communications (NASDAQ:ZM) are doing their best to capture as much of that business as they can.
Slack makes a buy
Slack shares were up more than 8% Wednesday. The messaging-based multimedia workplace collaboration platform provider made a strategic acquisition, which has been rare for the company to do.
Slack announced its purchase of Rimeto, a provider of business directory services, in a press release. The parties didn’t reveal the terms of the deal, including the price. However, Slack had kind words to say about Rimeto’s business, calling it a “powerful cultural tool” to help workers feel a greater connection to their jobs and to each other. Rimeto’s platform allows employees to build detailed profiles of themselves, along with search functions that let people connect across entire enterprises.
Slack intends to take Rimeto’s features and integrate them into its own platform. That should complement Slack’s channels well, as it will let people not only get the information they need, but also learn more about team members. Slack also acknowledged that some customers will only want Rimeto, so it will keep offering the platform as a separate service as well.
Slack hasn’t enjoyed the same share-price advance that Zoom has, so adding features is a natural move to boost interest. Slack CEO and co-founder Stewart Butterfield said that he’d likely look more closely at more acquisitions to accelerate growth and keep up with industry rivals.
Zoom gets physical
Zoom Video Communications stock climbed almost 2%, as investors weighed important news from Tuesday. With the company’s video teleconferencing service having taken off, Zoom decided to take away an obstacle that had kept some prospective customers from taking full advantage of its platform’s capabilities.
Most of the hundreds of millions of new users who’ve gotten onto Zoom in the past few months have done so from their own computers and mobile devices, reflecting the ease of integration of the video collaboration service. Yet Zoom knows that its highest-value customers want to take things further, with high-end equipment like conferencing telephones, video cameras, and large-screen monitors. That equipment can get expensive in a hurry, though, putting it out of reach of some small and mid-sized businesses.
To make it easier for clients to use its platform, Zoom has introduced a hardware-as-a-service option, essentially letting users obtain Zoom-branded equipment to meet their needs. Monthly payments will be far lower than what users would have to pay to make an outright purchase, but they’re high enough to give third-party equipment providers the incentive to work with Zoom’s customers.
Zoom has taken the workplace collaboration space by storm, and the power of video has given it a competitive advantage over Slack. It’ll be interesting to see how the two emerging powers in the industry position themselves as customers’ needs evolve. Both tech companies have the potential to do well in the future.