 The Cube at IBM Impact 2014 is brought to you by headline sponsor IBM. Here are your hosts, John Furrier and Paul Gillin. Hey, welcome back everyone. We are here live in Las Vegas for IBM Impact. This is The Cube, our flagship program. We go out for the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm really excited to have here inside The Cube, CEO and president of Ustream, Brad Hunts the Bull and founder of Ustream on The Cube. Hey, we're on the front page of Ustream.tv today. Thanks a lot. Hey, right, welcome to The Cube. Thanks for having me. Thank you for enabling us to stream live across the web. You guys, I remember when you guys started, fantastic startup, it was like, whoa, social media. Wild West, I'm sure the cost is stacking up. You've learned a lot. You're now fully kicking ass, stable platform. You guys are growing like crazy. We're here. Tell us about your relationship with IBM. What do you got? You're here for business reasons, not just for a social call at The Cube. You're here for some legitimate business. So tell us what's going on. Well, increasingly it's served the needs of the public. So we build video capabilities from everyone from the sales course of the customer, to skills of the customer, into it. For things, you know, from robotic launches, press conferences, and doing webinars, to training internally, to CEO town halls. A lot of people don't know this shit. And so what we're here with IBM is we're a part of their new launch called the IBM Arcade. It's one of the launch part, in fact. The only video site, video platform that is part of that. I mean, we're really excited at the opportunity to work closer with one of the most, if not the most iconic enterprise brand in the world, which is IBM. And then the trend also with the marketplace is also bring some ecosystem support for IBM's overall portfolio. But if you think about it, you know, people want package solutions, right? So people want to have, they don't want to, they want to pure play video. Maybe they do that, but also we want the big data. They want the analytics. They want the reporting. And it's also hard for a customer to go out and say, hey, what if I want to bring in new video? I want to do a town hall or sales trainings. I want to do all this stuff. Wait a minute, where's the analytics? Where's the investment? Where's the closed loop? I mean, we've heard this before, right? How much is the platform? Where's the ROI? Well, I mean, if you close one deal, I guess, but see where I'm going with this is a bigger system. So what's your take on that? When you approached IBM, was it like they came to you? Did you go to them? Just take us through the interaction. You know, I think we've been in talks for quite a while, so I don't even remember exactly who approached you, but you are right. When you're dealing with enterprises, they do want full solutions. They want to be able to have those solutions supported. And the beauty of the cloud is that you can, no matter what size your organization is, you can quickly and easily test and try before you buy, get access to powerful capabilities, and build on top of them to meet the needs of whatever your specific organization is. So every business is different. Every business has different needs, but the robustness of the cloud and the robustness of properties like ours, like Ustream and what we're dealing with IBM, allows those companies to build these experiences and video solutions in a way that meets the needs that they have. Last time we talked at IBM Pulse, you and I were chatting on the hallway around Ustream's technologies. Share a little bit of folks out there that might not know Ustream. I mean, the complexity around running a global scale video operation. Sure, what are you guys doing that's different now that's going to give you some headroom for the future? Well, Ustream today is the largest live video platform in the world. And we came from very modest beginnings, actually just I wanted to watch my brother's band on the internet because I was in the military deployed and I couldn't see his concerts. So we had a very simple way. We started the company to now, serving the needs and serving very complex video needs for very large corporate part customers. And it's all built on top and this makes us unique, certainly different than most of the video properties out there is we've built our own technology. And so we built what's called the Ustream CDN. This is, we've scaled this globally. We have data centers around the world, pops around the world. In most markets, we're a tier one peering provider just to give you a sense of how much bandwidth we push with the same peering status that something like a Netflix would have. And so we built this out all on top of our own technology called the Ustream Media Server. And what the Ustream Media Server allows us to do is to scale very rapidly, reliably, leverage multiple CDNs around the world, multiple partners and do all of that in a very cost effective manner. And it's a big part of our IP and our flexibility and our value proposition to customers. What are your big opportunities that you're looking at as the next chapter of Ustream? You guys have been very successful iterating your business, growing your business. Foundation said you guys are scaling up. What is the next chapter going to look like? What are your ambitions? Well, I think if you look at where the growth is happening in video, most people don't realize this. Most of the growth that this next wave is going to happen within the enterprise. Take a company like Nestle. You've heard of Nestle, big consumer good, packaged good manufacturer. They actually produce more hours of content a year than all of Hollywood combined. And that's not my stat, that's from Frost and Sullivan. When you look at last year for live video alone within the enterprise, they broadcasted over one billion hours of content was viewed in the enterprise live. That's almost what we've done in the history of the Fountains-Borke company. Is that internal or external? Is it content marketing? It's both, it's both. External and internal, external if it's to the customer, internal if it's to the employee, the other important customer. And so the enterprise is a tremendous opportunity. What you're going to see coming from Ustream, we're going to continue to provide really robust solutions that solve the needs of these organizations for productivity, for transparency, to connect with consumers and their employees in deeper ways. And have those all be very, very much API-driven, leveraging the data of these companies and deep integrations that are simple and feel like a consumer product. Because we come from a consumer background, we want to bring that same sort of knowledge to the enterprise. Well, one of the trends in social media that we're really high on, SiliconANGLE, when we watch closer to the cube is this direct business model. And even my previous startup, the failed podcast, we were all kind of like the democratization. And we all kind of failed all those podcasters and the video bloggers just never happened, right? But then that was just first generation, now Twitter, everything else. The business model of advertisers is to go direct. I mean, you're seeing, you mentioned Nestle, I know Pepsi, Coke, these guys, they have dollars, right? So the old model was put dollars into a vehicle that you didn't know which half was working for you. Now you say I can instrument big data and put 100% of my dollars to work with crowdsourcing, with content marketing, completely different mindset. And we're seeing uptake. What are you seeing on the status of that trend? Growing still, is it changing directions? Is it still viable? Is it exploding? What's your take on that? I think it's exploding. I mean, the realities of it are, every corporation today is a media company. Whether they want to be considered that or not, they are. I mean, Red Bull creates as much content as most Hollywood, more content online than Disney. Companies like GoPro are creating more and more content. You know, even companies that, like you wouldn't think were creating content are like Cisco and Intuit. So they're creating content in a variety of different manners and that's allowed them to connect with their users. So most corporations today really know how to create compelling content where that wasn't the case five years ago. And then we built products like our live ad products that can help those companies that are good at creating content, but not so good at driving the viewership. We can help them get millions of simultaneous viewers live. In fact, we do that for a variety of corporations around the world. So have you thought about the whole disruption side of the business? In other words, did we look at kind of like what cable did for TV? Cable disrupted TV. Is it even possible for that to happen again with social or is it going to be more of so many channels that there's not going to be that kind of revolution or is it going to be just different? I mean, because you guys probably looked at multiple revenue models. You know, do you become a broadcaster? Do you become the cable? Are you the enterprise? What's your take on that? Because video is so pervasive, you could pick any horse to ride into the sunset. What's your take on that? And which horse did you guys pick? Well, I think it's definitely different. The model of cable on the internet is going to change, is fundamentally different. I mean, look at what's happening, even the last couple of years with Netflix and Amazon, and to a certain extent that ship is already sold for video, and that's not really where our opportunity is. We think our opportunity happens to be leveraging similar technologies, but in a lot of ways, more powerful, and using that for this other type of content creator, this other type of media company, which is a major corporation or even a small business. And so it is a- It's an enterprise grade, basically. Yeah, absolutely, enterprise grade, but offering it in a way that you can try before you buy and serves the needs of the entire scope and size of enterprise. I mean, just because you're a small business doesn't mean you shouldn't get access to certain capabilities, and that's the beauty of the democratization piece, just like for YouTube content creators, the same thing is happening now for small businesses all the way up to companies like IBM. You don't know what's going to go viral, and I think one of the things, if you bring video into your operation, one thing I've learned is when you bring video into the operation, you get to do some things with it, and sometimes some things will fall flat, some things will go home run. You don't really know. But having that built into the workflow is pretty critical. So with that, what are some of the things that you guys are doing that are going to make an enterprise gradient? What do you expect from the IBM relationship? Well, enterprises want a couple of things. One first and foremost, they typically want a security. So they want to make sure that, particularly if it's a private broadcast or something they don't want the word to get out, they want a reassurance that your product is not going to be able to be compromised in a way that would jeopardize their business or very, very sensitive information. And so we've really doubled down our ability to provide a secure capability. They also want scale. And so as an example, when we did the Sony PlayStation 4 launch announcement, this is a press conference, a product launch, live on Ustream, if they had tried that through some of the existing traditional capabilities, it would have crashed. We had over 1.5 million simultaneous concurrents at its peak. During that two hour block, it was about 2% of the internet's traffic. And so enterprises need scale and they need reliability. And so a lot of what we're doing is to continue to invest there and then they want solutions that actually solve. How about competition? Obviously you have live stream, you have Adjustment TV, which they've kind of gone into the whole gaming thing with the Twitch thing. It's almost like everyone's kind of selling into their swim lanes. But what's your take on, does that come up at all, the competition for you guys? It comes up sometimes for us. I mean, we have a very large brand, at least by most measures today, we're the largest. And we've leveraged that brand we built on the consumer side to help us close very large enterprise deals. And the hundreds of thousands, or in some cases even the millions. And so those other players that are in the space that are like you have the traditional OVPs, you even have companies that we're starting to replace like Cisco Webex, which is used a lot. A lot of people are now turning to usuring for those services. The biggest issue with people with video and we live in every day is the cost to build out is just significantly, I mean, just too massive. I mean, someone would say, hey, I want to do some live broadcasting or built that into a workflow discipline, whether it's for content marketing, to having broadcasting, you know, a big concert somewhere or doing, it's expensive, right? I mean, if you want to just do one offs, I mean, what are some of the cost numbers? I mean, what's the order of magnitude from your data? Is it like, because you have a leverage model. To me, it's very simple. Your leverage for the customer is great because you're already got the cost in so you can pass on that leverage to the customer. They could pay it as a service. That's the beautiful things. Now, the alternative is what? Data centers, direct metering. By the way, it might not be running properly. I mean, can you give us an order of magnitude? Is it like 100X more problematic and more costly or is it benchmark somewhere? The reals of it are as you scale your infrastructure on a global base like we've done, inherently your unit economics start to benefit you. But in the early days of USHIM, we had to pay other people to do this and it was very, very expensive. In fact, so expensive, we almost didn't get USHIM off the ground because it was so expensive. But there's been a lot of environmental factors where the cost of these things are continued to come down. And because of the scale that we operate at, you can be a small business and get access to a global infrastructure, perfectly serve all your content in Korea or in South America, leveraging our infrastructure that we built. I mean, to do that on your own, I mean, you're talking potentially millions of dollars. And so it's a very daunting proposition for most businesses that have yet to scale all the way up to our size. What's next for USHIM? What are you going to do now? I've been following you on Facebook. You got a lot of you just in the White House. Yeah. Was that fun? It was neat. Yeah, it was a long time. Tell us a little bit about that. Can you share it? Yeah, I can share it. I had the opportunity to go meet the White House Business Council, which is something President Obama I think did that was really smart. He formed a group of cabinet and secretaries that work under him to represent the needs of business and have relationships with business. And I was part of a small group that got to go and talk about some of the issues today and visit the White House and have lunch there. You know, it was amazing. You certainly could, although you couldn't see it, I could feel the power of I think the US government. Well, that while I was in there I was intimidated. The security was very tight and that was an interesting process to go through having never gone through it. You know, the good news is that whatever side of the alley you're on, the reality of it are, I was very impressed with the people we met and I get the sense they generally want to solve problems. I mean, they want government 2.0s about opening up things and I think that's something that's interesting to them. We get to talk about the whole healthcare.gov issue and so I get to make the CIO and the CIO. They tell you how you have a live stream of how to do it every time. So, you know, how to use Obamacare website. I don't want to even go there, it's a whole no that. That's my most dynamic thread on my Facebook page. So, to end this segment, I'll give you the last word. Where do people find out more about some of the things you're doing on the enterprise size or corporate website, USEstream.tv? Is the consumer side or is that the main site? Today, it's still all on USEstream.tv and the future of that may change, but the, so if you just go to USEstream.tv, you'll see and we have a very simple platform you can try before you buy. You can put your credit card in and within a matter of minutes, you know, be broadcasting live to the world, leveraging video technology, even doing linear broadcast like a television, right at your fingertips and then if you're a business that needs more of the robust capabilities that we may have specifically targeting enterprises, you know, we've talked to one of our sales reps and we'd love to be able to work with you. We're a proud customer. Thanks for hooking us up. We appreciate the cube love on USEstream.tv and again, it wasn't for the USEstream. We wouldn't be in business. So, you know, you are enabling guys like us to bring some data out there and share that signal from the noise. So, appreciate it. Brad, great to have you on the cube. You're right back here live, streaming live on USEstream.tv. This is the cube at IBM Impact and we're on USEstream all the time. So, keep on following the cube. Thanks to these guys. So, we'll be right back.