Amazon Web Services acquires Elemental

Sam Blackman

Amazon Web Services is to acquire video processing specialist Elemental Technologies.

Terms of the deal have not been disclosed, but US press reports suggest that it values Elemental about US$500 million (€450 million), or five times the company’s revenue – Amazon’s biggest acquisition since it bought gaming video service Twitch last year.

According to the Wall St Journal, Amazon beat off competition from Ericsson to acquire Elemental, with Cisco Systems also believed to be interested. Ericsson and Elemental have collaborated closely in the past, with Ericsson tapping Elemental to provide video compression processing as part of its Ericsson Virtualised Encoding platform.

According to Elemental, Amazon’s acquisition will bring together Elemental’s video technologies with the AWS Cloud platform to provide media and entertainment companies with a way to scale their video infrastructure as they move to internet based delivery of services.

Elemental will continue to operate its business under its existing brand, delivering its full range of offerings for pay TV operators, content programmers, broadcasters, governments, and enterprise customers, the company said. It will also expand the integration of its offerings with AWS, and through close collaboration with AWS, “accelerate the innovation of next-generation services that feature a range of solutions for customers leveraging on-premises assets, hybrid architectures, and cloud”.

The acquisition is expected to close in the fourth quarter of 2015.

“Elemental shares Amazon’s passion for invention and putting the customer first. Together, we’ll collaborate on deeper technology integrations and new infrastructure offerings so that media and entertainment companies can evolve their hybrid and cloud models as they continue to innovate their services for viewers,”  said Andy Jassy, Senior Vice President of Amazon Web Services.

“The media and entertainment industry is at a unique inflection point, and as a part of Amazon, we will be in an even stronger position to help our customers delight their viewers globally. We’re thrilled to have Amazon supporting our growth and ongoing commitment to our customers’ success,” said Sam Blackman, co-founder and CEO of Elemental.