Carrier buys video conferencing company
Last week, US wireless carrier Verizon Business announced that it agreed to acquire BlueJeans, a video conferencing company aimed at the enterprise market. The financial details of the deal were not disclosed. BlueJeans provides a video conferencing service that is used by companies around the globe.
The deal comes at a time when an unprecedented number of employees, students and family members are using tools such as Zoom, Cisco’s Webex and Microsoft’s Teams and Skype as substitutes to physical gatherings. Zoom, for example, has seen its popularity surge, with the number of daily active users ballooning to 200 million from about 10 million before the pandemic. And while the stock prices of many tech companies dropped, Zoom’s market cap soared.
It would be tempting to see the move as Verizon quickly jumping on the remote-working bandwagon, but it’s also part of an effort to bolster its business unit as the mobile carrier rolls out 5G networks. Verizon says it plans to integrate BlueJeans into its 5G strategy, aiming to use it to help companies build out services like telemedicine, online education platforms and remote training tools. BlueJeans counts Facebook and Standard Chartered among its major, global customers. However, Verizon’s 5G coverage in the US is still limited, and we expect the immediate benefit from this acquisition will be to its unified communications service.
BlueJeans’ main selling point for business customers has been its encryption, an added layer of security that Zoom says it’s working to implement only now. Zoom’s security has come under heavy criticism as its service became essential for industries and families to stay connected.
BlueJeans, which has more than 15,000 customers, offers encrypted video conferencing at subscription prices, whereas rivals such as Zoom and Skype provide free services to many users. This goes part of the way to explaining why Zoom’s use has skyrocketed, whereas BlueJeans has been struggling to build up. Given the initial stumbles by Zoom in the areas of reliability and security, Verizon could have an opportunity to grab share in the video conferencing market.
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