Ustream claims to stream live and on-demand video to about 80 million viewers per month for customers such as NASA, Samsung, Facebook, Nike and The Discovery Channel.

Initially set up in 2007 to help people in the military connect through video around the world, the service now offers video streaming to companies and broadcasters covering anything from corporate keynotes to live music concerts.

IBM said that Ustream will join the newly-formed IBM Cloud Video Services unit, which brings together assets from IBM’s R&D labs and strategic acquisitions – including recently purchased Clearleap.

The unit will be led by general manager, Braxton Jarratt, and will target what IBM estimates to be a US$105 billion opportunity in cloud-based video services and software.

“Through this latest acquisition and the creation of a new cloud business unit, IBM will provide an end-to-end suite of digital video solutions for the first time under one roof. As a result, clients will be able to take advantage of every stage of the video life cycle through advances in customisation, digital access, visual analytics and more, all to enable the consistent delivery of video content globally,” said Jarratt.

Commenting on the deal, Ustream founder and CEO Brad Hunstable said that the partnership was a “natural choice” as IBM is expanding its video portfolio offerings and Ustream is a leader in video solutions for media and enterprises.

“By 2017, 80% of all the world data will be video. From programs on Netflix to videos on Facebook, this emotional medium has permeated our lives,” said Hunstable.

“For IBM, acquiring Ustream is a way to turbo-charge their video strategy: our technology and business model will become a foundation for the IBM Video Cloud organisation to rally around the cloud”