IBM acquires Ustream, expects video to lose its Cinderella status

SUMMARY:

IBM jumps into the video world with an acquisition and a business unit launch.

IBM video cloudThe other day I mused whether IBM wold use its considerable cashflow to make big investments. Lo and behold and it makes a bold if not monetarily high investment, spending a rumored but not confirmed $130 million to snag Ustream, a video content delivery business that focuses on enterprise. Silicon Angle succinctly describes how Ustream has changed over the years:

Founded in 2007 initially as a free to use video streaming platform in what was then a wave of similar services such as JustinTV, Livestream.com, Yahoo Live TV and others, the company has morphed into a provider of a paid, cloud-based video platform that delivers high-quality video streaming combined with enterprise-based security and scalability.

Big name customers include Nike, Samsung, Facebook and NASA.

Coincidentally, IBM also announced the launch of its Cloud Video Services unit that includes previously acquired Clearleap, Cleversafe and Aspera along with 1,000 video related patents it has accumulated since 1995. The graphic at the top of this story explains the component parts for what IBM believes will be a $105 billion market opportunity by 2019.

IBM and video? You have to see this in a wider context. Video is a very fast growing part of enterprise content. It is also a resource hog that requires significant data management effort. However, it has been something off a Cinderella in the enterprise. This acquisition and launch change that perception. More compelling, video is a very good use case for Watson based analytics solutions. From the blurbs:

“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.”

Jon Reed and I have long been fans of the video format, largely because it is very difficult to fake authenticity on video and we prefer to film unscripted, unrehearsed conversations. Our modest and sporadic efforts have garnered over 460,000 views on YouTube. Not shabby.

It will be interesting to see how IBM morphs these assets over time. Today, Ustream’s streaming service  is available on plans that range all the way from a free trial to negotiable enterprise pricing with a competitive mid-tier offering that costs $499 per month. My view is that IBM should leave basic pricing alone because that provides access to a very large potential market at a low barrier entry point. My guess is that the newly formed unit will become an important part of the portfolio of offerings that IBM’s recently launched digital transformation practice promote to customers.

Thinking more broadly, IBM’s acquisition exposes Livestream as the only other publicly recognizable streaming competitor. Yes, there are plenty of video CDN specialists like BitGravity, Akamai and Limelight Networks, but it is Livestream that usually comes to mind in this context.

Update: Following the initial publication of this story, Vijay Vijayasankar, an IBM VP who leads the company’s digital transformation team for utilities and media reached out to me confirming that video is a big part of his portfolio offering. He made a couple of interesting observations:

We can now train robots to watch videos and learn. That is the future of learning . Much easier to do it with robots at scale than with humans and way better than programming with an SDK.  I am strictly interested in what [Ustream] does as an enabler for Watson controlled robotics.

Fascinating stuff and very much a case of ‘watch this space’ to hear about customer stories.

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    1. IBM going to need super high achiever business unit execs with strong packaging skills to turn all these technical acquisitions into meaningful chargeable customer value sets.