Blue Jeans Network Nabs $25 Million Funding Round


It's been a year since Blue Jeans Network emerged from stealth mode into a crowded field of competitors pushing simplified A/V conferencing connectivity. But the much-discussed cloud conferencing startup has a lot to crow about these days: industry recognition, increasing channel adoption on the part of VARs, integrators, service providers and other vendors, and a healthy new round of funding to continue its momentum.

Blue Jeans Wednesday confirmed a Series C funding round of $25 million, bringing its total venture capital take to about $48.5 million. Participants include Accel Partners, New Enterprise Associates and Norwest Venture Partners, all of which were involved in Blue Jeans' prior rounds.

"In a year, we've gone from unknown to disrupter," Stu Aaron, Blue Jeans' chief commercial officer, told CRN. "We're growing our paying customer base day in and day out, and we're happy to have gotten to a year."

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According to Blue Jeans, Mountain View, Calif., the money will be used to expand sales, marketing and operations, and to bolster R&D and improvements to the Blue Jeans platform.

"Most of our growth has been through word-of-mouth," Aaron said. "We haven't put much investment into marketing programs, so we're going to start to put dollars into awareness of the product. As you'd expect, the biggest obstacle we run into is people who don't know we exist."

Blue Jeans offers a cloud-based meeting room service in which users can host, schedule and manage their own conferences via a Web interface. The "wow" factor is Blue Jeans' ability to bridge different video and audio protocols, meaning easy conferencing between high-end Cisco or Polycom video systems, for example, with consumer-grade services such as Skype or Google Talk, or an audio caller using the PSTN.

Blue Jeans doesn't have the field to itself -- bridging services such as Vidtel are challenging Blue Jeans' expanding market position, as are major video vendors and A/V integrators building their own services. But Blue Jeans has captured significant mind-share in the channel and counts some of the country's best known video VARs and MSPs, including IVCi, Yorktel and AVI-SPL, among its adopters.

Blue Jeans has close to 20 channel partners now, categorized as VARs and integrators that bundle the Blue Jeans service in with endpoint sales, MSPs that leverage it in their services portfolios, or OEM-type relationships. Aaron declined to specify how much of Blue Jeans' revenue goes through the channel, but described the number as significant and said that all three of those partner categories are growing.

Blue Jeans also is updating its platform with a new access option, Aaron said. Users can now connect to a Blue Jeans meeting using only a Chrome, Firefox, Internet Explorer or Safari browser and a camera, meaning a third-party commercial conferencing client is no longer needed to join a meeting.

It's already proven popular, said Aaron: Since the beta release of the Web browser access option, nearly 15 percent of Blue Jeans' overall traffic has come in that form.

Blue Jeans is further expanding its interoperability to include additional commercial clients, including Cisco Jabber and various Cisco TelePresence systems, as well as native SIP support, Aaron said. Additional new features include customized login pages for customers looking to add their brand to the Blue Jeans service, bolstered layout controls to enable individual users to customize their view in a Blue Jeans meeting, and single sign-on and SAML support for IT administrators.

Aaron said Blue Jeans was hiring across the board and would continue to invest in channel enablement. The company makes its direct salespeople "channel neutral" in compensation to encourage them to close deals with partners, he explained, and many of its new hires over the past several months have been channel support staff.

"We can touch lots of different types of customers, and it's nice because we don't find a lot of channel conflict," he said. "We've signed on some key partners, and now we're taking a pause on that to make sure we can be very strategic with them instead of just randomly and widely open the floodgates."

The embrace of Blue Jeans and other services by the likes of Cisco and Microsoft is encouraging, but not surprising, Aaron said.

"It speaks to the fact that the incumbent video vendors are realizing their core value is selling endpoints," he said. "Why jeopardize an endpoint sale when a complementary service like Blue Jeans is out there?"

PUBLISHED ON JUNE 27, 2012