Author | Li Xiaodong

This view stems from an observation that domestic collaboration office tools overly emphasize AI, but in practical applications, the main functions of tools like Feishu and DingTalk (such as online documents, multidimensional tables, punch-in and sign-in, etc.) are actually not closely related to AI.

In the past two years, there have been many new entrants in the software industry, and most startups are focused on AI, whether it's search, generation, or dialogue types. Without going into detail, these products generally leverage a large model to deliver value, resulting in high valuations for these companies.

However, in the field of collaborative office work, current AI applications seem more like a gimmick than an actual selling point. AI has not significantly improved efficiency or reduced costs in most collaborative office scenarios. In reality, the customer companies encountered also indicated that their actual demand for AI is limited, and many so-called AI features have not been widely accepted or recognized.

Imagine, in some cases, introducing AI can actually complicate workflows. For example, after using AI for information retrieval, manual verification of its accuracy is still required. Since the intelligence of AI depends on the accuracy of the original data, users have limited trust in AI, which limits its widespread application in collaborative office work.

In fact, we have also conducted research on the collaborative office field abroad and found that the problems faced both domestically and internationally share some commonalities to a certain extent.

Take Zoom as an example. A few years ago, it was undoubtedly a star company. The global pandemic has significantly changed people's lives and work styles. Zoom, with its minimalist, user-friendly, and elegant features focused on online video conferencing, became the go-to tool for remote work, learning, and socializing, with a market value that once approached $160 billion.

Zoom's success demonstrated the potential of collaborative office work, and its domestic and foreign counterparts like Microsoft Teams, Slack, and DingTalk also experienced a period of growth.

However, after the high-profile period, Zoom's growth trajectory was less impressive:

Compared to the past, its stock price and market value have declined significantly. Some investors have commented, "A few days ago, Zoom showed signs of a rebound, and I thought it might make a comeback. After observing for a few days, however, it hasn't truly reversed its previous downward trend."

Why is Zoom showing signs of decline? The reasons can be attributed to the dissipation of the pandemic dividend, intensified market competition, slower customer growth, and increased marketing and R&D expenses. This also gradually reveals that a company's growth trajectory is not solely determined by its product but also by its commercialization path.

Interestingly, Eric Yuan, Zoom's founder, does not view the rapid growth during the pandemic as a positive thing. To cope with the surge in users, Zoom had to quickly expand its team, which impacted the company's culture. Competitors also accelerated their support for remote work and video conferencing during the pandemic, putting even more pressure on Zoom.

'If there had been no pandemic, Zoom might have developed even better now,' but the company's current situation does not necessarily mean it has returned to a reasonable range. While Zoom's product is small and elegant, its moat is low. Eric Yuan has pinned his hopes on AI, echoing the domestic players' approach.

According to media reports, this product, originally focused on video conferencing, is now urging people not to use video conferencing. Currently, AI has been applied to almost all product lines, with the ultimate goal of advocating the use of AI avatars to handle most work, attend meetings, make decisions, and even respond to emails. Yuan also plans to integrate Zoom into a comprehensive platform, launching Workplace, a collaboration platform, along with documents, emails, and other tools.

In his view, AI has reshaped Zoom's moat. The key points are: completely free, no use of user data to train AI, and low cost. Their AI strategy not only focuses on current performance and cost but also maintains competitiveness in the ever-changing AI field by combining multiple technology sources, leveraging different scenarios and third-party models interchangeably, and optimizing the reasoning process.

Zoom has introduced several generative AI features, including Zoom AI Companion and Zoom Docs, which are embedded in various Zoom tools like Zoom Meetings, Team Chat, and Whiteboard, aiming to improve productivity and collaboration efficiency among enterprises.

From these examples, it can be seen that most AI features serve as auxiliary tools to the original functions, but being "free" has helped Zoom build a deeper moat.

On the one hand, in the highly competitive SaaS market, offering additional and free features can increase user stickiness. On the other hand, providing AI features for free allows users to try and use these new features without barriers, attracting more users in the long run and ultimately generating profits through other means (such as value-added services and enterprise subscriptions).

Take Zoom's Contact Center as an example, a modern customer service solution that differs significantly from other products in its integration of video calling and AI technology. Decision-makers purchasing Contact Center are different from those who previously bought video conferencing products, but their trust in Zoom, as existing users, facilitates Contact Center sales.

Another example is the significant update made by the popular software Notion, particularly in its comprehensive reconstruction of AI functionality. The upgrades focus on three main areas: improving the interaction of conversational bots, optimizing writing assistance, and revitalizing the knowledge base to make interactions between AI assistants and users more natural.

The newly upgraded Notion AI can retrieve knowledge bases across different pages and applications, enabling users to access and utilize various resources more conveniently, thereby enhancing overall productivity.

As one of the first products to integrate ChatGPT, Notion AI was fully opened to all users at the beginning of this year and officially offered AI functionality as a separate paid product. Its pricing strategy is $10 per user per month or $8 per month if paid annually. Notion AI can assist users in tasks such as writing, editing, summarizing, and provides cross-platform search capabilities, seamlessly connecting with applications like Slack and Google Drive to quickly aggregate information from multiple sources.

According to reports, as of 2023, Notion has reached 30 million users, with approximately 4 million of them being paying customers. The initial internal assessment was that Notion AI would bring in an additional $10 to $30 million in ARR per year, but this goal was achieved within just one month, suggesting that Notion AI could potentially generate $100 million in ARR annually. Furthermore, Notion AI quickly attracted a large number of users, surpassing 4 million in a short period.

It must be said that this level of commercial growth is unmatched by most domestic office software.

A typical example is DingTalk, which, despite having a large user base (reaching 700 million users and 25 million enterprises by the end of 2023), has very few paying customers. The CEO previously stated that less than 1% of enterprises using DingTalk are actually paying customers.

To drive commercialization, DingTalk has integrated Alibaba's "Tongyi Qianwen" large model and revamped its products through AI, achieving AI integration across multiple product lines and functions.

For instance, simply typing "/" will intelligently generate most workplace content, including document creation and chat summary generation. In addition to offering a free standard version, DingTalk also provides annual subscription options for professional, exclusive, and proprietary versions. By introducing AI features, DingTalk aims to enhance the value of its paid versions, making premium features more attractive to users.

Moreover, DingTalk generates revenue through platform commission sharing and hardware licensing. By leveraging AI technology to provide personalized services such as intelligent analysis of enterprise data and customized workflows, DingTalk believes that enterprises will be more willing to pay and develop closer relationships.

However, insiders indicate that the number of customers willing to pay for these services is still relatively small, and DingTalk has yet to achieve profitability.

On the other hand, Feishu has also integrated AI into multiple products, such as multidimensional tables, field shortcuts, and dashboards, to enhance their intelligence. The most direct manifestation is the launch of its AI assistant "My AI" (Feishu Smart Partner), which can assist users in writing work summaries, meeting minutes, and engaging in collaborative Q&A during office hours.

In terms of specific commercialization, as AI functionality continues to expand, Feishu may introduce value-added services or subscription models based on AI capabilities. For instance, offering users a higher-level AI assistant. Feishu is more inclined to attract customers by providing specialized services and customized solutions.

Overall, foreign collaborative office tools mostly adopt a pay-per-feature model, allowing users to choose and pay for the functions they need. In China, while tools like DingTalk and Feishu are actively exploring commercialization paths, they still face numerous challenges. Behind this lies both differences in domestic and international market environments and varying perceptions of the value and willingness to pay for collaborative office tools among users.

According to existing reports, privacy concerns have significantly impacted Zoom's AI deployment in foreign markets. However, Zoom has taken measures to ensure user data security and privacy, thereby alleviating this issue to some extent.

Has Zoom achieved greater growth through AI? According to various data sources, the integration of AI technology has indeed boosted its enterprise sales. For instance, in the third quarter of fiscal year 2024, Zoom's total revenue grew by 3.2% year-on-year, with enterprise revenue growing by 7.5% to $661 million. After embedding AI technology, Zoom's quarterly customer churn rate has significantly narrowed, indicating higher customer retention.

Why is there such a significant commercialization gap between Zoom, Notion, Feishu, and DingTalk in the field of collaborative office work, despite their similar AI deployments? Is it because the AI capabilities of domestic software are not robust enough, or are market expectations for AI too high?

This is just one aspect. Upon comparison, it becomes clear that while AI is indeed a powerful technology, it is not a panacea in collaborative office work. Its current usage scenarios are still limited, often functioning more as a smart assistant. As Eric Yuan noted, a good product does not necessarily translate into good commercial value; research and development costs, business models, and the payment environment also play decisive roles.

Many collaborative office companies have invested heavily in AI research and development but have not achieved significant ROI, instead becoming project providers or software outsourcers for enterprises seeking digital and intelligent solutions.

Returning to the essence of business, customer demand and market positioning remain crucial factors in determining product success. Despite the rapid development of AI technology, which has brought unprecedented changes to the industry, the core principles of business remain unchanged. However, excessive investment in AI can sometimes cause companies to lose direction and question what they should be doing.