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Zoom to increase its R&D dependency on India and US

The company said it would be setting up new technology centers in Bengaluru in India, and in Phoenix and Pittsburgh in the US.

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Riding the wave of increased demand for remote-working tools during the pandemic, Zoom said on Monday its quarterly revenue ended July grew by 355% to USD 663.5 million.

Revenue from Asia-Pacific grew to USD 81.4 million, recording more than sixfold jump compared to last year. While the company didn’t reveal its earnings from the India market, Velchamy Sankarlingam, president of product and engineering at Zoom Video Communications, earlier told KrASIA, the combined daily participants of paid and free usage in India surpassed 300 million in April, compared to 200 million a month ago.

In its attempt to not fall into any trouble with the US government, like ByteDance’s short-video app TikTok has, Zoom is trying to reduce its dependency on the research and development team based out of China. To begin with, it has expanded its engineering facilities in India and the US. In May, it said it would set up new two new R&D centers in Phoenix and Pittsburgh in the US. In July, the company said it is setting up a new technology center in Bengaluru as well as going to hire extensively in the country over the next few years.

“India is a strategically important country for Zoom and we expect to see continued growth and investment here,” said Eric Yuan, CEO of Zoom. “We plan to hire key employees for the technology center over the next few years, pulling from India’s highly-educated engineering talent pool. This facility will play a critical role in Zoom’s continued growth.”

Currently, a bulk of Zoom’s R&D team is still based in China, its regulatory filings showed. It leaves it open to risks and become a scapegoat if and when geopolitical tensions between the two superpowers reach its peak.

Zoom came under US government’s scanner after the company in April admitted to having mistakenly routed some American users’ data through Chinese servers. Since August, it has stopped selling products to customers in mainland China. It has already halted services to individuals in the country.

“Revenue wise, China is very small,” Yuan said in the earnings call Monday, adding that halting direct sales there had “no impact.”

“We don’t have any current plans to move our engineering talent out of China. We are focusing on diversifying by adding talent in the U.S. and India,” said Zoom CFO Kelly Steckelberg, adding that diversifying the talent base is to make sure “if there were something were to change, there would be no immediate impact on our service or our ability to provide services to our customers.”