I didn’t see this one coming, but is IBM about to make a play for Brightcove? First, let’s back up to early January. Brightcove stock is hovering around $14 per share, from November 2013 to January 6, 2014. Then, on January 6, Brightcove announces the acquisition of Unicorn Media for $49M; immediately thereafter, the stock drops to the $11 range, where it’s been for the last 3 weeks. Unicorn Media developed an ad insertion platform, that generated $5M in 2013, and has about 50 customers. In it’s current state, Brightcove is a cheap buy for IBM. The longer it waits, the hundreds of millions of dollars more it will have to pay out. Fast forward to today, an announcement just came out the at the IBM Connect Conference in Orlando FL, that the IBM Web Content Manager (WCM) is now fully integrated into the Brightcove Video Cloud Platform. The press release claims that the IBM WCM team is now well versed in the Brightcove platform, including encoding and APIs. This might be a sign that IBM is dipping its toes in the OVP market, and testing it out.
IBM vs Amazon
IBM is building out its cloud infrastructure business to compete against Amazon, Google, & Microsoft. Let’s not forget that IBM is still hurting from the lost of a $600M CIA contract to Amazon, for building out a private cloud. IBM really has it in for Amazon right now, and they won’t forget what happened. IBM acquired Softlayer, a major competitor to Amazon. Then, IBM buys Aspera, a critical partner of Amazon, that made it possible for their AWS partner ecosystem to upload big files to their cloud platform with ease.
Reason for Buying Brightcove
Finally, IBM buying Brightcove kills two birds with one stone. First, IBM hits Amazon in the gut with this purchase. Second and more importantly, IBM fills a big void in their cloud computing platform. The OVP is one of the last missing pieces that completes the IBM cloud, and makes it ready for prime time. With Brightcove in its fold, IBM is now able to provide end-to-end services in compute, storage, large file uploads (Aspera), video, and CDN (via Akamai).
Brightcove enables IBM to ingest video, transcode it, secure it, store it, tag it, deliver it to any device, and place ads on it. The probability of IBM buying Brightcove is at 80%, in my opinion. Brightcove is a great fit for IBM, and helps round out its product set.