Verizon's business division announced Thursday it will purchase BlueJeans, which it described as a "trusted enterprise-grade video conferencing and event platform," for a reported $400 million.
The company said the acquisition is a direct response to the COVID-19 pandemic, which is forcing businesses around the world to embrace working from home (WFH).
"BlueJeans' cloud-based video service currently serves a wide variety of business segments from small organizations to some of the world's largest multinational brands, and has played a significant part in continuing those companies' operations during the ongoing work-from-home surge," Verizon said in its release.
Importantly, Verizon also said the acquisition would dovetail with its 5G efforts, "providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work." Verizon has so far installed a 5G network in parts of roughly 30 cities using millimeter wave (mmWave) spectrum, and has said it will expand the offering more broadly this year by transmitting 5G signals in other spectrum bands.
"I feel that we are in a very very good spot with 5G," Verizon CEO Hans Vestberg told CNBC in discussing the company's acquisition. The publication reported Verizon would spend roughly $400 million on BlueJeans.
Vestberg added that BlueJeans counts more than 15,000 customers, including the likes of Facebook, Microsoft's LinkedIn, Viacom, Khan Academy and others.
Why this matters
Global Internet traffic has skyrocketed amid widespread stay-at-home orders, and videoconferencing has arguably seen the greatest amount of growth. For example, Nokia reported that videoconferencing service Zoom saw its traffic rise 700% from February 1 in select networks in the US. Separately, Bloomberg reported that traffic volumes on Cisco's Webex online meeting service were up 24 times above their normal range during peak usage hours.
Verizon last year broke its business into two main areas: business and consumer. The company's business division, which announced the BlueJeans purchase, is headed by Tami Erwin, who reports directly to Vestberg.