UStream, a company that offers video streaming services to millions of viewers and broadcasters, has just been bought by IBM to create a cloud video services unit within the company.
The company made the announcement on Thursday, a day after Fortune reported that the deal is in its final stages.
Several reports have confirmed that the tech company purchased the streaming services company for $130 million. It also includes possible future payments, that is, if Ustream manages to meet the goals to be set by the company.
— IBM (@IBM) January 21, 2016
Ustream began its operations in 2007 and has offices in Los Angeles, San Francisco, and Budapest. It also has data centers in San Jose, California, Tokyo, and Amsterdam. The startup company was able to raise $80 million from investors such as SoftBank Capital and DCM Ventures.
It currently has 80 million active viewers and broadcasters. The streaming website provides about 2 million streams every month, ranging from keynote speeches, concerts, and radio shows.
Some of UStream’s clients include Facebook, HBO, Nike, Discovery Channel, Cisco, Sony, Intuit, NASA, Mazda, and Samsung.
As a result of the deal, IBM has successfully formed the cloud video services unit. This unit combines the assets from UStream and Clearleap, which is a video management firm that was recently bought by IBM as well.
The video services unit will reportedly integrate technologies from other companies that IBM has invested in such as Aspera and Cleversafe. GM Braxton Jarratt, who was former CEO of ClearLeap, will take charge of the said unit.
— Michael Povel (@MichaelPovel) January 22, 2016
It was unclear whether UStream CEO Brad Hunstable, who also co-founded the company, will join the new unit or not.
While there may be some who think that IBM is making a drastic move in creating the new unit, Jarratt says otherwise.
“IBM doesn’t shoot from the hip. One of the things we were impressed with when we started engaging with IBM was there was a big master plan behind this acquisition,” he said.
The former ClearLeap CEO also said that while some companies sometimes make purchases based on their competitors’ actions, deals that IBM makes are not among them.
“This was a well thought out plan to incorporate video into a cloud unit,” Jarratt added.
“IBM Snags Clearleap Video Service As It Continues To Pick Off Strategic Cloud Properties | TechCrunch” https://t.co/jBzp1zogrS
— hycbee (@hycbee) January 21, 2016
The move by Big Blue is seen as a strategic one in order to establish itself as a force in cloud-based services, especially when it comes to videos. In 2015 alone, the IBM Cloud earned a total of $10.2 billion, which is a 57 percent jump from the previous year.
Based on these numbers, the company believes that cloud-based videos will become a $105 billion industry by 2019.
Meanwhile, IBM Cloud’s senior vice president Robert LeBlanc said that the popularity of video as data now requires advanced performance as well as “powerful analytics.” According to LeBlanc, these analytics would help clients “extract” necessary information and insights that can help their businesses.
— IBM India (@ibm_in) November 19, 2015
“Aligning our expansive video and cloud innovations into an integrated unit will create opportunities for clients to take advantage of this medium in the most strategic way possible,” LeBlanc added.
IBM is a multi-national technology company that is a pioneer in computing systems, hardware, and software. However, as times are calling for more emphasis on cloud services, the New York-based company is trying to become a more modern company.
With the purchase of UStream and its cloud services unit in place, the company will have more opportunities to compete against companies in other niches. The unit may also provide a chance for IBM to explore opportunities in advertising, mobile, cloud storage, and even communication.
[Image via Wikimedia Commons]