IBM Confirms UStream Purchase, Forms Cloud Video Unit

No deal terms were disclosed, but we continue to hear that the transaction included around $130 million in cash, plus an undisclosed amount of earn-outs and employee retention payments (total deal value below $150 million). All of UStream’s senior executive team has joined IBM (IBM).

UStream will become part of a new Cloud Video Services unit that IBM also unveiled this morning. It will be led by general manager Braxton Jarratt, who previously served as CEO of Clearleap, which IBM acquired last month. Other groups being folded into the unit include Cleversafe (acquired last October) and Aspera (acquired in 2013).

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“We believe that we now have the most complete end-to-end video platform of any enterprise software business,” Jarratt says. “We have the ability to securely ingest these massive files with Aspera, object storage and distribution with Cleversafe andClearleap gives us a pretty complete capacity to ingest and manage both content and apps for over-the-top services for brands like HBO. Now, UStream gives us the ability to do actual live-streaming.”

Jarratt also says that there will be cloud video integration with IBM’s Watson unit: “I was just at CES, where there was a ton of enthusiasm about how we bring cognitive capabilities into video services. We’ve got endless meetings set up with people about it, with so many interesting use cases.”

IBM and Ustream began working together back in April 2014―20 months before Jarratt’s arrival via the Clearleap acquisition―when the startup was the only video service included in the launch of IBM’s cloud marketplace.

Mountain View, Calif.-based Ustream had raised nearly $50 million in venture capital, although its latest funding round was in late 2011. Investors include DCM, Eastward Capital Partners, Labrador Ventures, KT Corp., SoftTech VC, SoftBank, Recruit Strategic Partners, Wasabi Ventures, and Western Technology Investment.