Verizon folds BlueJeans, its $400m+ videoconferencing acquisition

Can't compete with Teams and Zoom

Service provider heavyweight Verizon will be “sunsetting” BlueJeans, the videoconferencing service that it had for three years, citing “the changing market landscape” as its reason.

In May 2020, Verizon acquired BlueJeans, a cloud-based, business-focused videoconferencing service that first launched in 2011. The purchase came at a time when millions of employees all over the globe were working remotely as a result of the Covid-19 pandemic. Verizon paid "less than $500 million" for the company, according to a report in The Wall Street Journal at the time.

The move out of the videoconferencing arena comes as Verizon has recently taken action toward more efficiently and intentionally running its business. Specifically, Verizon during its Q2 2023 earnings call last month said that its newly appointed leadership team is focused on advancing the company's core networking, cloud and 5G and wireless strategy.

To that end, the company last year revealed the creation of the Verizon Global Services organisation, which the carrier said would help free up more capital to the tune of $2 billion to $3 billion by 2025, so Verizon could further invest in its core networking and telecom services.

Verizon in March named Sowmyanarayan Sampath the CEO of Verizon Consumer Group, shifting him from his position as Verizon Business CEO, which he had held for nine months. Kyle Malady, then executive vice president of global networks and technology, was appointed CEO of Verizon Business Group.

The carrier said in a note to users of the service that the first phase of that shutdown process will include an end to the BlueJeans Basic tier and free trial offers, which will no longer be available as of August 31.

"Verizon will be sunsetting the BlueJeans platform in 2024. The award-winning platform has successfully connected thousands of customers over the years. However, the changing collaboration marketplace has shifted since acquisition, leading to the decision to retire the suite of BlueJeans by Verizon products," a Verizon spokesperson told CRN.

The shift away from videoconferencing comes at a time when the larger collaboration market has slowed down as many employees are returning to the office or opting for a hybrid working model. Many of the market's leaders are also feeling the effects.

Cisco Systems last year announced plans to lay off employees and right-size some of its business units, which included its Collaboration segment. During the tech giant's most recent fiscal quarter, its collaboration segment's revenue declined 13% year-over-year.

Zoom in February announced that it would be reducing its staff by 1,300 employees, or about 15% of its staff after the company said it quickly staffed up during the pandemic to build out its platform, up its security, and manage the influx in global demand. But the company didn't "thoroughly analyse" its teams or assess if it was growing sustainably and toward the highest priorities, Zoom CEO Eric Yuan said at the time.

In Verizon's Q2 2023 figures, total operating revenue for Verizon Business, which included the BlueJeans videoconferencing service, dipped 1.9% on revenue of $7.48 billion during the second quarter compared with $7.63 billion in the same quarter last year.

This article first appeared on CRN.