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Sizing Up Blue Jeans: Why Video VARs Are Flocking To This Start-Up

Blue Jeans is at the forefront as video moves from conference rooms to desktops and mobile devices -- unlocking a host of business-to-consumer opportunities.

To hear Blue Jeans Chief Commercial Officer Stu Aaron tell it, the hotshot cloud conferencing start-up is "inundated with partner opportunities" and is riding an industry buzz that has yet to subside.

Not bad for a company that emerged from stealth mode less than a year ago into a thicket of competitors pushing video enablement and video management solutions of every conceivable stripe.

"We've been through the initial wave of growth, so we want to work with a more strategic group of partners and maximize what we can out of those strategic channels to look toward the next wave of growth," Aaron told CRN this week.

[Related: 15 Networking and Data Center Upstarts to Look At Right Now ]

Blue Jeans offers a cloud-based meeting room service in which users can host, schedule and manage their own videoconferences via a Web interface. The hook, however, is that Blue Jeans can bridge any number of different video and audio protocols, meaning that a user of Cisco TelePresence could easily connect with, say, a user of Skype, or Google Talk, or a Polycom or LifeSize video unit, or an audio caller using the PSTN.

Blue Jeans launched a channel recruitment campaign shortly after its June 2011 emergence from stealth mode. IVCi, a Happauge, N.Y.-based MSP and audio/visual integrator, was Blue Jeans' first U.S.-based solution provider. "There isn't anything I've seen that works, that ties the business in with what I would call the prosumer and the consumer sides, and if there is, it's not as robust as the cloud offering that Blue Jeans has here," Chris Bottger, IVCi's senior vice president, managed conferencing services, told CRN last fall.

IVCi has since been joined by some of the channel's best-known video providers and conferencing integrators, including Eatontown, N.J.-based Yorktel, Capistrano Beach, Calif.-based Conferencing Advisors, Clearwater, Fla.-based Stratus Video and Chicago-based InterCall.

Earlier this week, AVI-SPL, the Tampa, Fla.-based A/V integration giant, confirmed its formal relationship with Blue Jeans. Specifically, AVI-SPL will use Blue Jeans to provide self-serve, interoperable videoconferencing services in its Unify ME Managed Services offering -- a "meet me" option for customers looking to create meetings from various endpoints and connection options.

"I could have had my guys develop an interface for bridging Skype to other video platforms, but why? They already have it, " said Mike Brandofino, executive vice president, video and unified communications at AVI-SPL, in an interview with CRN in Tampa earlier this month. "We have customers who have five endpoints and want to use Skype -- why am I going to throw that customer away? We have something for them."

Blue Jeans has 15 solution provider partners overall, Aaron said, and thinks of them in three buckets: A/V integration VARs that can bundle Blue Jeans' service with endpoint sales, MSPs that work it into their portfolio of managed services, and large-scale conferencing providers that present Blue Jeans as an audioconferencing alternative and which Blue Jeans describes as OEM-type relationships.

Aaron declined to specify how much of Blue Jeans' revenue goes through those partners but said the amount was substantial.

"It's all ramping very nicely," Aaron said. "We're excited about all three tiers and they represent different fingers into the pie. We expect all three to grow over time, but we don't want to create a model where we're overstating particular [types of] partners. Each brings different attributes to the table."

NEXT: Blue Jeans Aligning To Industry Video Software Trends


After roaring out of the gate with $23.5 million in venture funding, Blue Jeans continued to make moves quickly. In December, Blue Jeans brought on veteran executives from Cisco and SuccessFactors to be its engineering and marketing chiefs. In January, the company added a referral partner program for solution providers that introduce business to Blue Jeans but don't resell the platform.

Asked to cite other key moves Blue Jeans has made in the past few months to keep its momentum steady, Aaron named two. The first was the attention Blue Jeans received for connecting Microsoft Lync UC desktops to Skype calls and to other video systems, shortly after Microsoft completed its $8.5 billion acquisition of Skype in October.

Lync exposure is valuable, Aaron said, because it signifies the trend of video moving from conference rooms to desktop and mobile devices, and unlocks business-to-consumer opportunities -- especially for enterprises that want to connect with customers and home users.

"We're the only people in the world right now that have a solution ready to go that easily connects Lync to Skype," he said. "It's a tremendous value-add for us and for our channels."

The other was the announcement Blue Jeans made in late March around its so-called MCU Killer pricing plans -- basically, allowing customers to license virtual ports from Blue Jeans via the cloud that replace the need for the purchase, maintenance and management of traditional MCU, or multipoint control unit, infrastructure.

It's no small customer base Blue Jeans is challenging; Wainhouse Research estimates that videoconferencing infrastructure is about a $700 million market, overwhelmingly controlled by Cisco and Polycom. A fall 2011 study by researcher Baird & Co. cited scalable, software-based videoconferencing solutions as beginning to disrupt traditional MCU-based market share over the next few years.

"Given its large install base, we expect MCU-based solutions to be around for years, but see Cisco, Polycom and others as being ultimately forced to embrace software-intensive solutions," wrote Jayson Noland, Baird senior analyst, at the time.

Blue Jeans claims its licensable virtual ports are elastic -- customers buy what they need only -- and come in at about one-quarter of the price of typical MCUs. Blue Jeans prices the service at a rate of $299 per port, per month.

"That cost keeps a lot of customers out of the multiparty video game," Aaron said. "It's just so prohibitive. A cloud bridge means you save anywhere from 60 [percent] to 90 percent over the cost of a hardware MCU over a three- to five-year life. You take that money you would have spent and buy more endpoints with it. That's a blessing to us and to channel partners."


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