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Amazon Enters the Workplace Collaboration Space with Chime

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Apr. 4 2017, Updated 7:36 a.m. ET

Amazon eyeing a $28.7 billion market

Amazon (AMZN) recently threw its hat into the workplace collaboration services ring with the launch of Chime, the company’s version of Microsoft’s (MSFT) Skype for Business. Chime is part of Amazon’s cloud business, Amazon Web Services (or AWS).

With Chime, Amazon seems to be training its focus on the UCaaS (unified communications-as-a-service) market. Research firm MarketsandMarkets estimates that the UCaaS market could be worth $28.7 billion by 2021, up from $17.4 billion in 2016. The chart below shows the UCaaS market projection during this timeframe.

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Chime’s major competitors

Aside from Microsoft, other major brands in the video conferencing space include Cisco Systems (CSCO) with WebEx and LogMeIn (LOGM) with GoToMeeting, which it recently acquired from Citrix (CTXS). There are other small players in the online video conferencing market that Amazon will try to beat with Chime as it pursues the $28.7 billion market.

High-quality service at a lower cost

Because Amazon is entering a crowded and somewhat fragmented market, it’s trying to refine its pitch for Chime. The company claims that Chime offers superior video and audio quality for online conferencing compared to its rivals.

In addition to highlighting the quality of its service, Amazon also claims that Chime is cheaper than the alternatives. The company offers a basic version of the service at no cost, but there are two premium packages that cost between $2.50–$10.00 per user per month. Microsoft’s rival service starts at $5.00 per user per month, while Cisco charges $69.00 per host per month for its WebEx service.

In the following article, we’ll examine Amazon’s new user trends.

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