IBM takes another step into OTT video world with $130M Ustream acquisition

Technology giant IBM has added another key piece to its cloud services offering by acquiring San Francisco-based Ustream. The online video streaming provider's assets will make it possible for IBM to sell OTT services via its IBM Cloud platform, putting it squarely into a competitive space occupied by Microsoft (NASDAQ: MSFT) and Amazon Web Services (NASDAQ: AMZN).

The deal is valued at about $130 million, not including earn-outs and other items like employee retention packages, according to Fortune. It is not expected to be above $150 million. However, exact terms of the deal were not disclosed by either side.

IBM has rapidly maneuvered into cloud services through an acquisition-based strategy. In mid-December it bought AT&T's managed services and applications unit for an undisclosed amount, and in early December it announced a deal to purchase Clearleap and integrate its scalable cloud video technologies into IBM Cloud.

Once complete, Ustream will become part of IBM's new Cloud Video Services Unit, which combines its recent acquisitions with assets from IBM's research and development labs. Braxton Jarratt, general manager of IBM Cloud, will lead the new unit.

Ustream is not new to IBM's world. The online video service was included as part of IBM's cloud marketplace when it launched in spring 2014, and its technology was incorporated into Bluemix, the tech giant's cloud development platform, later that year.

Its streaming customers include notable names such as Discovery Channel, NASA, Samsung, Facebook and Nike, and its services reach around 80 million viewers per month through those media outlets.

Purchasing Ustream allows IBM to integrate its technologies more tightly into its IBM Cloud service. "Video has become a first-class data type in business that requires accelerated performance and powerful analytics that allows clients to extract meaningful insights," said Robert LeBlanc, senior vice president of IBM Cloud, in a release. "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."

The short version is that IBM sees a $105 billion opportunity in cloud-based video services and related software, and it's going to grab a piece of that.

For more:
- see the announcement
- see this Fortune article
- and this article

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