On the eve of IBC, Nokia has crashed out of the IP video business, selling it to the Canadian Volaris group to re-create the Velocix CDN brand that it acquired in 2009. This is the third such departure this year of IP video businesses out of large tech conglomerates with Ericsson and Cisco previously departing core IP video businesses. Nokia dropped out of the video business previously when it was still very much focused on handsets.
We very much get the feeling that there are two things happening here – firstly that large equipment vendors are not the right environment to have a “vision” about the future of video and try to sell it both internally and to major customers and secondly that margins are tightening in the video streaming market, with everyone and his granny saying they have an end to end OTT video product line, and packagers and origin servers just being table stakes for the market – and yet most of this business falling to Amazon Media.
Nokia will remain a minority shareholder in Velocix and will act as a major channel partner for the company around the world and with existing accounts.
This will be the first IBC event for both MediaKind and Synamedia, and now also Velocix as new IP video brands. We understand that the group will be headed by Paul Larbey, who was head of the Video Business Division at Nokia which sat inside the IP & Optical Networks group. Larbey was previously the CEO at Velocix when it was first acquired by Alcatel.
Velocix was originally a pure play CDN equipment supplier and last year led on the creation of an in-house CDN for Sky in the UK. It also has contracts with Liberty Global and other tier 1 accounts.
The business has been sold to Volaris for an undisclosed sum and all of the employees are expected to transfer. Volaris is a Toronto, Canada based software firm which has acquired a number of software firms and aims to grows them within vertical markets. It is owned by the $3 billion turnover Constellation Group, a public company in Canada.
The video product portfolio which goes across incudes caching and streaming products, origin servers and storage technology, and personalization software as well as a Cloud PVR. The planned deal is expected to close during Q4 2018, subject to customary closing conditions.
Larbey, head of the IP Video Business at Nokia, said, “We are excited to be part of the new company under the Velocix brand that set out to transform the video landscape back in 2002. Through several acquisitions the name changed, but the purpose remains the same: to enable big changes in the video market, to make video more personal and to enable a highly compelling entertainment experience for consumers on every screen.”