IBM Beefs Up Cloud Offerings With Ustream Acquisition
International Business Machines Corp. (NYSE: IBM) confirmed it had acquired live-video streaming service Ustream on Wednesday in a deal worth $130 million.
Big Blue's latest purchase is expected to help the company improve its cloud-computing services, a business that the firm has been focusing on over the past year.
Cloud Videos
The Ustream acquisition will give IBM the ability to enhance its cloud-based video services, a market that is seen continuing to grow in the years ahead. The company is expecting cloud-based video services to become a $105 billion industry by 2019, so investing in the technology now is essential to the company's future growth. Not only are cloud-based services gaining popularity, but online video has become one of the most valuable ways for firms to reach customers.
Related Link: IBM Sales Have Fallen In 15 Straight Quarters
Company Turnaround
On Monday, IBM's earnings release confirmed that the firm's revenue declined for the fifteenth consecutive quarter, suggesting that the company is still struggling to evolve alongside the tech industry.
Big Blue has been increasing its focus on cloud and mobile technology and plans to increase sales in those areas in order to offset weakness in its software and server businesses. So far, the efforts appear to be paying off, as cloud revenue has been on the rise at IBM; however, it still hasn't been enough to counter weakness in the company's other businesses.
A Step In The Right Direction
While many investors are skeptical about whether IBM will be able to turn things around before it's too late, the Ustream acquisition represents a step in the right direction. Many expect the deal will help IBM compete with Amazon.com, Inc. (NASDAQ: AMZN)'s cloud offerings and draw in more customers.
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