One of the biggest changes wrought by the COVID-19 pandemic has been the rapid adoption of videoconferencing for employees working from home. What was once used by just a small percentage of workers has quickly blossomed into a full-on movement.

The most high-profile beneficiary of the trend, Zoom Video Communications (NASDAQ:ZM), soared from 10 million users to 200 million in about three months, while also driving its stock price up more than 120% so far this year. But the unexpected surge in users has also brought growing pains for the young company. While the verb "zoom" acquired a new meaning virtually overnight, it also resulted in uninvited guests with nefarious intentions crashing unsecured meetings, forcing the company to play catch-up with its security.

While the company already had several big-name competitors, a dark horse has entered the fray, in a move some are describing as a potential "Zoom killer." 

A videoconferencing meeting using Zoom software.

Image source: Zoom Video Communications.

Can you see me now?

Verizon Communications (NYSE:VZ) announced Thursday that it would buy the enterprise videoconferencing and event platform BlueJeans Network. While the company didn't divulge the terms of the deal, The Wall Street Journal reported Verizon would pay less than $500 million, citing "a person familiar with the terms." The deal is expected to close in the second quarter.

BlueJeans already serves a wide variety of businesses, ranging from small organizations to some of the world's largest multinational brands, including Facebook, small-business accounting and tax software provider Intuit, and payroll processor ADP, among others. Verizon said in a press release that BlueJeans "has played a significant part in continuing those companies' operations during the ongoing work-from-home surge."

The organization has already achieved several important financial benchmarks prior to the acquisition. Early last year, BlueJeans CEO Quentin Gallivan said the software-as-a-service company surpassed $100 million in annual recurring revenue, and in December he announced that BlueJeans would be both profitable and operating-cash-flow positive "over the next few months." Gallivan also cited record-setting product quality and Net Promoter scores, as well as all-time-high net retention rates.

BlueJeans has focused on the business and enterprise segment of the market with its encrypted videoconferencing capabilities, while forgoing the consumer market. It boasts about 15,000 corporate customers and doesn't offer a free tier like Zoom. 

Big plans

In its press release on the deal, Verizon said, "[BlueJeans] will be deeply integrated into Verizon's 5G product road map, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning, and field service work." Each of these areas have experienced significant growth as the result of the pandemic.

The rollout of 5G, the next generation of wireless mobile technology, began in 2018, though the service is not yet widely available, and its continued expansion has been slowed by the pandemic. 5G is expected to dramatically increase download speeds, allowing for much greater connectivity and near-instantaneous communication, which will no doubt boost videoconferencing platforms like Zoom and BlueJeans on mobile devices.

A hand holding a smartphone with digital images of 5G emerging from the device

Image source: Getty Images.

Zoom killer?

Zoom already had significant big-name competitors with Cisco System's WebEx platform and Google Hangouts from Alphabet, while Microsoft (NASDAQ:MSFT) competes with both Skype for Business and its Teams work collaboration platform. It's also interesting to note, however, that Microsoft-owned professional network LinkedIn is listed among BlueJeans' customer base. 

Several high-profile missteps, primarily related to unauthorized access to video meetings via "Zoombombing," brought the company a lot of unwanted publicity. Zoom responded by freezing its product development efforts and redirecting its energies toward securing the platform. CEO Eric Yuan has promised end-to-end encryption for Zoom users in the very near future.

So did Verizon just buy a Zoom killer? It's important to remember that this isn't a zero-sum game. Given the strength of its existing competition and ongoing surge in adoption, it's pretty clear the market is growing exponentially, and there will surely be more than one winner in the videoconferencing space. For Verizon, this is likely a bolt-on acquisition designed to help the company expand beyond its wireless roots.

If Zoom can quickly resolve the security concerns that made headlines, there's no reason to think the company won't survive another deep-pocketed competitor and continue to thrive in the months and years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.