Amazon Web Services is to acquire Elemental Technologies, a provider of software-defined video systems for multiscreen media. Details of the deal have not been disclosed. Ericsson will meanwhile acquire Envivio for $125 million. It will add to the capabilities of Ericsson with a combination of software and hardware video encoding.

Elemental provides software services to enable media and entertainment companies to format live and on-demand video for distribution to multiple screens.

Founded in 2006 and headquartered in Portland, Oregon, Elemental will continue to operate its business under its existing brand.

Amazon Web Services, a subsidiary of online retailer Amazon, offers cloud-based computing services to over a million customers, including Elemental.

Andy Jassy of Amazon Web Services said: “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.”

One report valued the deal at $500 million but there has been no confirmation of the number. The Wall Street Journal also reported that Amazon outfit Ericsson in a bid to buy the company.

The news was shortly followed by the announcement that Ericsson will acquire Envivio.

Based in San Francisco, Envivio was founded in the year 2000 and has around 200 employees. Envivio generated revenues of $43 million in 2014.

Envivio is a global leader in software-based video encoding with an installed base of over 400 TV service provider and content owner customers in all markets globally.

Customers include Comcast, Cox Communications, Liberty Global, Sky, Telstra and Time Warner Cable.

“The uniting of Envivio’s pioneering software solutions and Ericsson’s strength in the marketplace is a great combination for our customers and stockholders,” said Julien Signès, founder and CEO of Envivio. “Ericsson shares a similar vision for the future of video processing and shift to software defined and virtualized encoding solutions. Ericsson brings tremendous resources, a broad product and solutions portfolio and reach that will accelerate the adoption of Envivio’s software-based video solutions.”

“The combination will strengthen our encoding position with both custom silicon and pure software encoding, delivering performance and flexibility,” said Per Borgklint of Ericsson.

Ericsson previously purchased the Tandberg Television business in 2007 for over £700 million, becoming a leading provider of digital video compression systems.