Why Verizon Bought Zoom's Rival, Blue Jeans

Verizon, one of two dominant US telecoms, sees the future growth of tele-everything: from medicine to banking, to education. Blue Jeans gives it an established entree into those markets - and with better security than Zoom has currently. JL


Sarah Krouse reports in the Wall Street Journal:

The deal  is part of an effort to bolster Verizon’s business group as the carrier rolls out faster 5G networks and pitches new applications of wireless technology to its largest corporate customers.The conferencing service gives the carrier the ability to help its corporate customers build telemedicine, remote learning and virtual training services. The platform’s security and integration with workplace collaboration tools like Microsoft Teams was part of its appeal

Verizon Communications Inc. VZ 0.87% has agreed to buy videoconferencing company Blue Jeans Network Inc., as an unprecedented number of people work remotely because of the coronavirus pandemic.

The carrier will pay less than $500 million for the Zoom Video Communications Inc. rival, a person familiar with the terms said. The deal, announced Thursday and previously reported by The Wall Street Journal, is part of an effort to bolster Verizon’s business group as the carrier rolls out faster 5G networks and pitches new applications of wireless technology to its largest corporate customers.

The conferencing service gives the carrier the ability to help its corporate customers build telemedicine, remote learning and virtual training services, said Tami Erwin, head of Verizon’s business unit. The platform’s security and integration with workplace collaboration tools like Microsoft Teams was part of its appeal, she added.

The deal comes as a record number of workers and students log on remotely using videoconferencing tools including Zoom, Cisco Systems Inc.’s WebEx and Microsoft Corp.’s Skype.

“Previously people were shy on camera. People thought people working from home were not effective. All of that has been” dispelled, said Krish Ramakrishnan, co-founder and executive chairman of Blue Jeans.

BlueJeans, the company’s brand name, is aimed at business, rather than consumer users, with encrypted videoconferencing. It has 15,000 customers and isn’t available free to consumers as services such as Skype and Zoom are.

Zoom chief Eric Yuan vowed earlier this month to create end-to-end encryption to keep meetings and conversations on his platform secure after the company faced public backlash over its security practices. As the system’s popularity took off amid the pandemic, conferences on its platform were repeatedly subject to “Zoombombing,” where bad actors gain unauthorized access to a meeting and share hate speech or pornography.

Discussions about a deal between Verizon and BlueJeans began last year. The privately held company in San Jose, Calif., offers videoconferencing, team meetings and webinars. It counts Facebook Inc., LinkedIn, Zillow and Intuit Inc. among its customers.BlueJeans, which recently became profitable and has seen usage surge amid the pandemic, was founded in 2009. It has in the past raised $175 million in venture capital from firms including Accel Partners and Battery Ventures.Executives for both companies said videoconferencing provides crisper video and audio on 5G networks and can be integrated with new augmented reality as that technology develops.