Why IBM Recently Acquired Ustream

  • IBM has acquired Ustream, a provider of cloud-based live video streaming services.
  • IBM clients across industries require a secure, scalable, and open cloud-based solution to manage video services.
  • Ustream will be integrated in the new IBM Cloud Video Services unit to enable clients to manage live video in the cloud and add business analytics.
  • According to IBM estimates, cloud-based video services and software represent a $105 billion opportunity.

IBM (NYSE:IBM) has acquired Ustream, a provider of cloud-based live video streaming services. The move will extend the IBM Cloud platform to help enterprise clients unlock the value of video, a rapidly-evolving digital media and data asset. The financial terms of the deal were not disclosed.

"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, IBM Cloud. "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."

IBM Cloud is a collection of fully integrated services to help IBM clients to use data across all digital channels to understand their customers and anticipate their needs. According to the company, IBM Cloud is the first full spectrum cloud built on open technologies, with the world’s most advanced analytics and cognitive computing toolbox. Cognitive computing, which indicates computer systems that understand the world in the way that humans do, is an important strategic focus for IBM. The cognitive computing technology of IBM Watson and IBM neuromorphic chips is at the forefront of Artificial Intelligence (AI) research, but there are practical spin-offs that can already be used in commercial applications.

"Video is the most powerful and emotional medium,” said Ustream CEO Brad Hunstable. "Increasingly it is becoming the favored form of communication, not just for entertainment, but also for business. We've built a video platform that is easy-to-use, yet incredibly scalable, secure and powerful and it is these qualities that made us an ideal addition to IBM’s portfolio."

Video has become a primary method for engaging with customers and employees through a wide range of media assets. As a result, IBM clients across industries require a secure, scalable, and open cloud-based solution to manage video services.

This is especially significant given researchers estimate that 80 percent of the world’s data is unstructured and dark to computer systems that cannot effectively manage or exploit it. Video makes up a significant part of that data, and structuring video content - for example making it searchable and indexed - is where IBM cognitive computing in the cloud can make a difference.

Ustream will be integrated into the new IBM Cloud Video Services unit to enable clients to easily ingest, store and manage live and on-demand video, enhance them through analytics, apply rights management and language capabilities, and distribute them consistently across the globe.

"Through this latest acquisition and the creation of a new cloud business unit, IBM will provide an end-to-end suite of digital video solutions for the first time under one roof," said IBM Cloud Video Services unit head Braxton Jarratt. “As a result, clients will be able to take advantage of every stage of the video life cycle through advances in customization, digital access, visual analytics and more, all to enable the consistent delivery of video content globally." According to IBM estimates, cloud-based video services and software represent a $105 billion opportunity.

Ustream, headquartered in San Francisco, provides video streaming services to more than 80 million viewers and broadcasters. The company was established in 2007 and is a video streaming industry veteran. But more recently the technology giants have realized the importance of real-time video streaming and moved in. Alphabet Inc-C (NASDAQ:GOOG) offers live streaming via Google Hangouts, distributed via YouTube. Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) offer video streaming services integrated with today's leading social media.

IBM's video streaming strategy has a different and clear focus on enterprise cloud computing, business analytics, and integration with IBM's cognitive computing solutions. These are important factors for IBM's existing client base of large enterprise customers, and therefore video computing in the cloud is likely to have a positive impact on IBM's stock in the mid term.

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