Amazon Acquires Elemental for AWSAmazon Acquires Elemental for AWS

Elemental Technologies will start its next chapter as part of Amazon Web Services.

A subsidiary of Amazon.com Inc. (Nasdaq: AMZN), Amazon Web Services Inc. , has announced that it's acquiring Elemental Technologies Inc. (ETI) for the company's software-defined video processing capabilities. The two have been technology partners for the last four years, but with this announcement, Elemental will go in house at AWS to help Amazon better serve its media customers.

"The media entertainment industry is going through a shift in technology that is unprecedented," said AWS VP of edge services Kalyanaraman Prasad in a press conference, referring to the migration toward Internet-based video delivery.

By pairing the AWS Cloud platform with Elemental's solutions, Prasad added, "We can help our customers be more agile across the entire video delivery platform."

There were no details shared on the financial terms of the agreement, but a report from The Information values the deal at $500 million.

Elemental is a major New IP player in the media industry, delivering virtualized video solutions to customers that include the British Broadcasting Corp. (BBC) , ESPN Internet Ventures and Home Box Office Inc. (HBO) , among many others. Earlier this year, Elemental announced that its technology is also powering Comcast's X1 cloud DVR service. (See Elemental, My Dear Comcast.)

CEO Sam Blackman remarked that the acquisition by Amazon will help Elemental "achieve its long-term vision for software-defined video delivery," by combining the company's virtualized video processing technologies with AWS's storage, compute, global CDN and application-level services.

The acquisition is expected to close in the fourth quarter, and Elemental says it will continue to operate under its existing brand.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading