The Cloud

IBM Forms New Cloud Video Unit

The acquisition of video streaming provider Ustream adds a fourth piece to IBM's planned enterprise video offering.
Katie Kuehner-HebertJanuary 21, 2016

IBM on Thursday confirmed that it had acquired Ustream, a provider of cloud-based live video streaming services, to be part of a new cloud video services unit “to help enterprise clients unlock the value of video.”

The terms were not disclosed, though Fortune, which on Wednesday broke the news that the two companies were in deal talks, pegged the purchase price at $130 million.

Ustream joins the newly-formed IBM Cloud Video Services unit that combines assets from IBM’s R&D labs and strategic acquisitions, the Armonk, N.Y., company said in a press release. IBM said it will deliver a “powerful” portfolio of video services that spans open API development, digital and visual analytics, simplified management, and consistent delivery across global industries.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

The new unit will be comprised of four acquisitions: Ustream, ClearLeap video management, which IBM bought in December; Cleversafe, a video storage service IBM bought in October; and Aspera, a large-file transfer tool IBM bought at the end of 2013.

The unit will be led by general manager, Braxton Jarratt, and will target the estimated $105 billion opportunity in cloud-based video services and software.

Jarratt, who came to IBM as part of the ClearLeap deal, told TechCrunch that Ustream gives the company the missing streaming piece to a full-service enterprise video offering.

IBM also has the ability to expose the new cloud unit as APIs in Bluemix, the company’s platform-as-a-service offering. The company hopes third-party developers will take these pieces and create entirely new ways of delivering video, Jarratt said.

The company also plans to incorporate other pieces like Watson for analytics.

IBM’s cloud business is beginning to show progress, as the company grapples with overall company revenue declines for the 15th straight quarter. On Wednesday, the company said its fourth-quarter revenue fell 8.5%, but it was better than analysts’ consensus estimate.

“Even while the results continue to disappoint, IBM is trying to transform into a more modern company, one that concentrates on cloud, analytics, security, and big data,” TechCrunch wrote. “The cloud video unit gives IBM another market in which to compete and opens up a lot of wider market opportunities around mobile, ads, storage, and communications.”