Carrier plans to compete against Zoom, Microsoft Teams with 5G mobility as value proposition
Under normal circumstances, Verizon’s deal to pick up niche videoconferencing player BlueJeans isn’t all that significant. But in the current environment, where millions of displaced workers are relying on video meetings to stay connected, the deal is potentially huge for Verizon and its channel partners.
The Lowdown: Verizon yesterday announced the acquisition of BlueJeans for roughly $500 million. BlueJeans has solid reviews from analysts for its technology and more than 15,000 active paying customers on its platform. In terms of videoconference providers, though, BlueJeans is a niche player in a crowded field far behind heavyweights such as Zoom, Microsoft Teams, Cisco’s Webex, and GoToMeeting.
The Details: With the deal, Verizon has short- and long-term objectives. In the near term, the company is looking to cash in on the boom in videoconferencing sparked by the COVID-19 pandemic. Market leaders such as Zoom, Webex, and Microsoft report surges in active daily users as businesses moved from office environments and live events to work-from-home scenarios. Picking up BlueJeans will give Verizon an easier and direct entree into the high-demand videoconferencing arena.
The long-term play has more to do with mobility. Verizon plans to market BlueJeans services alongside its growing 5G wireless network. Verizon says the combination of video communications and 5G service is a strong differentiator.
The Impact: Founded in 2009, BlueJeans hasn’t gained the traction of larger rivals such as Zoom. However, the company has strong recommendations from analysts for its reliability and ease of use. And BlueJeans has substantial integration relationships with complementary technology companies such as Microsoft, Samsung, and Citrix. Verizon, with its large sales footprint and army of telecom agents, has the potential to scale BlueJeans subscribers — particularly if bundled with other telecom and data services.
Background: Verizon buying a videoconferencing platform makes sense, as carriers historically bristle at the idea of companies riding on their networks to make money with content services. At its core, Verizon is a communications company, and adding a service such as BlueJeans gives it another tool to enhance the value proposition of existing services.
The Buzz: “Previously people were shy on camera. People thought…working from home was not effective,” said BlueJeans co-founder and executive chairman Krish Ramakrishnan, adding that all of those ideas have since been dispelled.
Counterpoint: Having BlueJeans under Verizon’s belt makes sense, but that doesn’t make it an easy sell. Verizon will have trouble assimilating BlueJeans’ existing partners into its traditional telecom channel model. Outside of that, Verizon is steering into a crowded technology segment. Microsoft, Zoom, and Cisco lead the videoconferencing market, but they’re not the only players. Collaboration providers such as Slack, unified communications services such as RingCentral and 8X8, and social media companies such as Facebook, offer some form of video communications. Part of BlueJeans’ challenge was breaking through. Verizon’s sales and channel power will help, but it’s not a guarantee for vaulting BlueJeans to market leader status.