Chairman of the Board of Directors

What Surprising New Service Is IBM Offering?

IBM has made several acquisitions recently to build its cloud video services unit. In January, it announced the purchase of Ustream, a San Francisco-based company founded in 2007 that provides on-demand and live video sources such as Facebook, The Discovery Channel, Samsung, and NASA. IBM also recently acquired Clearleap, a cloud-video company. Financial terms of the Ustream purchase are not available, but Forbes magazine reported that IBM likely paid $130 million for the company.

The new cloud-video unit is part of IBM’s plan to change course and move away from its legacy products, including servers, microprocessors, and software. The company has reported revenue drops in 15 straight quarters, and its CEO, Virginia Rometty, has stated that the company wants to implement new strategies that focus on increasing sales in cloud, analytics, social, mobile, and security imperatives. Company leaders hope that sales from these services will increase to 40 percent of total sales by 2018.

Investors have been slow to respond to IBM’s announcements, possibly because they are worried that IBM can’t turn around it strategy and products quickly enough. The company’s cloud revenue increased to 43 percent in 2015, but IBM shares suffered after the company’s software unit revenue fell sharply and failed to meet Wall Street expectations.

Braxton Jarratt, Clearleap’s former CEO, will lead IBM’s new cloud video unit. Along with Ustream and Clearleap, the unit will include more than 1,000 IBM research and development patents and other recent acquisitions, such as Cleversafe, a storage company, and Aspera, a cloud data transfer company. The company’s goal is to remove the phenomena of “dark data,” or video data that is not structured and cannot be managed efficiently. IBM hopes to make video data as easy to search and manage as other types of data.

In a press statement, Jarratt said that the recent acquisitions and new cloud business unit will mark the first time in IBM’s history that the company has been able to offer a comprehensive suite of digital video solutions.