Last month, Zoom Video Communications (NASDAQ: ZM) announced it is acquiring cloud call center software provider Five9.

That deal could prove relevant to investors in the ARK Innovation ETF (NYSEArca: ARKK) as well as customers that find the traditional call center model irksome. In the case of the latter, who doesn’t? Regarding the beloved ARKK, Zoom is the actively managed exchange traded fund’s fifth-largest holding at a weight of almost 5% as of July 30.

As is the case with so many disruptive technologies, cloud computing – an epicenter of the Zoom model – was affected by the coronavirus pandemic and that spells opportunity across myriad industries, including call centers.

“The COVID crisis, however, has changed this dynamic and catalyzed call center migration to the cloud,” according to ARK research. “Working from home, agents couldn’t route calls through legacy on-prem software. Indeed, now that many companies have moved permanently to remote or hybrid work policies, the acceleration towards cloud is likely to continue.”

ARKK 1 Year Performance

The Potential of Cloud Computing

As an actively managed fund, ARKK isn’t confined by industry-level obligations and several of its 47 holdings are dedicated cloud firms.

ARKK’s Zoom exposure could prove particularly compelling as the video conferencing company integrates Five5, targeting potential disruption in the call center arena.

“The first trend is the move from voice to text as the primary channel of communication with customers,” adds ARK. “Text-based communication allows support agents to handle requests asynchronously, mitigating connectivity issues in remote work environments and supporting automation more naturally than voice. Moreover, Millennials and Gen Zs seem to prefer text over voice.”

Another interesting element of the Zoom/Five9 marriage is the potential for automation of call center tasks, which could boost efficiency and profitability. That highlights the intersection of ARKK holdings on another front.

“Forward-thinking software providers like Twilio and LivePerson are removing humans from the loop and, at the same time, improving customer experience with natural language understanding models that can converse with customers while modeling intent,” added ARK.

Twilio is ARKK’s ninth-largest component at a weight of almost 4%.

Bottom line: call centers aren’t sexy, but the industry’s embrace of more automation could be appealing for ARKK investors.

For more on disruptive technologies, visit our Disruptive Technology Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.