Verizon Set to Expand Enterprise Video Business with BlueJeans Acquisition

In mid-April 2020, Verizon announced its plan to buy BlueJeans, a video conferencing and collaboration Software-as-a-Service (SaaS) solution provider focusing on the enterprise market. BlueJeans has more than 15,000 customers in 180 countries, with annual recurring revenue surpassing US$100 million; enterprise customers make up more than two thirds of its revenue. Verizon did not disclose the exact amount of the deal but confirmed that the acquisition price was under US$500 million. Verizon’s acquisition is an attempt to secure the opportunity in the enterprise video segment during the COVID-19 pandemic, which has forced businesses and organizations to facilitate work-from-home practices quickly while maintaining efficiency.

Business communications solutions are a part of Verizon’s Business product segment. Verizon provides unified communications and collaboration, video conferencing, Voice over Internet Protocol (VoIP), and enterprise mobility management and security services to Small and Medium-sized Business (SMBs) and enterprise and public sector organizations. Verizon has been an authorized reseller of BlueJeans and it could have already been considering expanding its video conferencing segment since before the pandemic crisis.

In October 2019, Verizon, Samsung, and BlueJeans announced a collaborative effort to develop mobile teleconferencing. BlueJeans leveraged Samsung DeX on Galaxy S10 5G and Note10+ 5G devices to develop a cost-efficient and easy-to-use smartphone-based video conferencing solution. With this solution, participants can connect one of the above smartphones to a larger display with an HDMI adapter enabling DeX mode to transfer the meeting onto the larger screen. Verizon’s 4G LTE and 5G networks will be powering to provide connectivity to the solution. Verizon’s plan for BlueJeans will enable integration of the video conferencing platform into its 5G network and expand its enterprise business segment. Verizon is aiming to provide a video conferencing solution focusing on telemedicine, remote learning, and field service work, the three areas most heavily impacted by the COVID-19 pandemic that will benefit the most from a powerful and scalable enterprise video solution.

Video has been a powerful tool for many businesses and organizations’ internal and external communication, training, marketing, customer support, and even recruitment processes. Many studies have proven that video significantly improves engagement and retention compared to other means of digital communications. In particular, video conferencing applications save time and travel expenses while enabling businesses to maintain effective communication with staff members and business partners from different locations across the world. Especially during the unprecedented COVID-19 outbreak, which resulted in the cancellation of all medium and large trade events and the implementation of mandatory work-from-home practices to businesses around the world, enterprise video applications have become essential.

There have been reports of significant increase in video conferencing platform user base since the pandemic started. As an example, enterprise communication platform provider Zoom reported that the number of daily meeting participants, including both free and paid, on its platform was approximately 10 million as of December 2019. That number jumped to 200 million in March 2020 and 300 million in April. Although the COVID-19 crisis is the major driving force behind the enterprise video market spike at present, the market is expected to see continuous growth in the long term. Businesses have already witnessed the efficiency and effectiveness of video in multiple ways. Many corporate trainings, business meetings, and trade events that are currently forced to use online platforms could choose to continue to use virtual platforms after returning to normal operations, assuming value is proven now through efficiency and significant cost saving. Similarly, other sectors such as healthcare and education are planning spend more to support telemedicine and online classes going forward.

Evolving technologies are also expected to accelerate the use of video conferencing platforms. Cloud-based solutions can be beneficial for companies with limited resources since pay-as-you-go tools can enable organizations to deploy the video solutions with no extensive Capital Expenditure (CAPEX) and maintain the ability to expand as they require. Expansion of fiber-optic networks and ongoing 5G network deployments are expected to accelerate opportunities in the enterprise video market. Solution providers can take advantage of high bandwidth, low latency networks to integrate Augmented Reality (AR) and Virtual Reality (VR) tools for marketing and training applications in verticals like retail and tourism. Telemedicine use cases can take advantage of low latency 5G networks to enable natural interaction between healthcare providers and patients. Verizon, with its 5G network deployment and BlueJeans, is well-positioned for development of such video platforms and use cases.

The ability to integrate advanced technologies and prove value to current and potential customers is crucial for the long-term success of enterprise video solution providers. Enterprise video platforms should focus on supporting Artificial Intelligence (AI)-based functions to foster value add services like transcription and translation, tags and search features, and meaningful analytics around video usage to provide businesses with automated insights and recommendations for making strategic decisions. Better security, better content management, and more robust customer relationship management integrations are crucial for the success of enterprise video platforms as well.