Big Blue Goes Big on Video Streaming

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Online video is rapidly becoming big business for Big Blue.

IBM, a company that conjures up images of the early days of computing, is pushing hard into the world of multiscreen video with a growing, evolving cloud-powered platform. Rather than baking it all from scratch, IBM’s recipe has called for a sprinkling of M&A moves that have further consolidated the video-streaming market.

Late last year, IBM snapped up Clearleap, the Duluth, Ga.-based cloud-video back office and infrastructure firm. It followed up that move with its more recent acquisition of Ustream, a live video-streaming specialist.

Both deals came in the wake of IBM’s 2014 purchase of Aspera, a vendor that enables large data transfers over broadband networks, and its acquisition of Cleversafe, a maker of object-based storage software and appliances.

Clearleap and Ustream have been folded into a newly formed unit called IBM Cloud Video Services. The division, led by former Clearleap CEO Braxton Jarratt, positions IBM to take on the sector’s other giants, including Amazon Web Services and Microsoft Azure, as well as Comcast, which is becoming a force in the cloud-powered content delivery and video-streaming market.

IBM’s buying spree also ties it more closely to the world of video entertainment distribution. Clearleap’s partners include HBO, A+E Networks, BBC America, Sony Movie Channel, Verizon Communications and Time Warner Cable. Ustream’s client stable counts HBO, the National Football League, Discovery Channel and Facebook, which has made video a key component of its social-media platform.

By adding Ustream to the mix, IBM can tie into a key trend in streaming — preparation and delivery of live events. On-demand video is part of Ustream’s repertoire, but “live has been our core competency from the very beginning,” CEO Brad Hunstable said.

Ustream has its own global content delivery network, but has also built an abstraction layer that enables it to plug into Akamai and other content delivery netwoks (CDNs) around the world, taking advantage of their transit and peering relationships.

That “software-defined content delivery network” lets Ustream optimize video quality at the individual viewer level, said Hunstable, who will continue with IBM. “As [video] traverses the open Internet, optimizing for the best path and the highest quality is very critical.”

Ustream will also help IBM reach into different parts of the market. Its “Pro” platform, for example, is a generic, all-purpose system that can take on large-scale events, while its “Align” product taps the same core technology but is tailored for smaller events, such as corporate training videos and town halls. Align is “like an internal version of YouTube,” Hunstable said.

The team-up with IBM will fuel the “next phase of our growth” and deliver a “different kind of scale,” Hunstable said, noting that Ustream had reached an inflection point. To reach the next step, it needed to either consider a major round of capital financing or take on a strategic partner, he said.

“Live [streaming] is definitely hot right now,” Hunstable said, adding that virtual reality presents another significant opportunity.