Cloud computing has revolutionized information technology, driving many middle-market deals along the way. The technique leverages networks of remote servers hosted on the Internet to store, manage, and process data, rather than the traditional model, which used a local server or a personal computer. By enabling on-demand delivery of technology resources and applications via the Internet with pay-as-you-go pricing, cloud computing has paved the way for a slew of efficient, inexpensive services.

The undisputed market leader in providing infrastructure services for cloud computing is Amazon Web Services (AWS) Inc., a division of Amazon.com Inc. (Nasdaq: AMZN). AWS has traditionally chosen organic growth, but the division recently took a rare foray into M&A when it bought Elemental Technologies Inc. for approximately $296 million in a deal that closed in October. Elemental develops software that enables companies to re-format video produced for traditional broadcast networks so that it can be distributed over the Internet on PCs, smartphones, tablets and TV. Elemental boasts more than 700 media companies as customers and provides the technology behind over-the-top TV (OTT) applications, including the BBC’s iPlayer, CNNGo, ESPN ScoreCenter, HBO GO, MSNBC Shift, Sky Go and Sky Now. Additionally, Elemental is supporting the world’s first 4K Ultra HD services, including those that were delivered by the BBC during the 2014 World Cup. Elemental had raised about $44 million in venture capital funding from General Catalyst Partners, Luminari Capital, Norwest Venture Partners, Steamboat Ventures, Telstra Ventures and Voyage Capital.

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