uploads/2016/02/video-straming1.png

IBM Is Now Eyeing the Cloud Video Space

By

Updated

IBM has great expectations for the cloud video space by 2019

In our most recent IBM series, we discuss IBM’s (IBM) growing interest in the video cloud space, as seen by its recent acquisitions of Ustream and Clearleap. IBM has stated that analysts estimate that 80% of the world’s data is unstructured, and video makes up a considerable part of this. According to Robert LeBlanc, Senior Vice President of IBM Cloud, “Video has become a first-class data type in business that requires accelerated performance and powerful analytics that allows clients to extract meaningful insights.” IBM expects the cloud-based video market to become a $105 billion opportunity by 2019.

Article continues below advertisement

Video streaming services popularity is rising fast

According to Nielsen data, 48% of US households agreed to have used at least one video streaming service in 4Q15, compared to 40% in 4Q14. Netflix (NFLX) leads this space, with 44% household penetration. Amazon Video (AMZN) and Hulu Plus have 19% and 10% household subscriptions, respectively.

In its recent survey in December 2015, Clearleap found that Streaming services like Netflix, Amazon, and Hulu Plus are almost as popular as pay-TV services from satellite and cable. According to Cisco’s (CSCO) Visual Networking Index, consumer Internet video traffic should account for around 80% of all consumer Internet traffic in 2019, compared to 64% in 2014.

Cloud video space has increased competition

According to the Verge, Alphabet’s (GOOG) video streaming service, YouTube intends to start live streaming 360-degree videos soon. Social media giants Facebook (FB) and Twitter (TWTR) also offer video streaming services. The growing competition in this rapidly growing space helps explain IBM’s rising interest in real-time video streaming.

Investors who wish to gain broad-based exposure to IBM might consider investing in the iShares US Technology ETF (IYW). IYW has an exposure of 46.7% to application software and invests ~12.5% of its holdings in IBM.

In the next and final part of this series, we’ll discuss the growing trend of consolidation in the tech sector.

Advertisement

More From Market Realist