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To Cloud Or Not To Cloud?

The cloud has become an increasingly important consideration for any media company looking to launch a video streaming service, be it TV Everywhere or Over The Top. The OPEX model offered by cloud service providers seems to be a no-brainer given the much higher cost associated with a buy or CAPEX model, but when exactly does a cloud solution make sense?

Any decision around migrating to a cloud service should revolve around aligning business goals with potential benefits. The would-be cloud migrant must first assess whether the hosted service, as well as the cloud provider, can truly deliver on the required benefits. Furthermore, businesses need to be comfortable with the rental model as opposed to the buy model.

“If the cloud is a means to an end that is clearly outlined, and is an overall cost-saving opportunity for the business, then moving an IT service to the cloud would be the right fit,” says Tomer Azenkot, General Manager, Asia for cloud video solutions provider Brightcove.

“Some companies are still in the transition from CAPEX to OPEX, and shifting IT functions to the cloud is complex. In terms of financing, the traditional CFO/accountant is required to take a much bigger look at how the company is investing its money because previous investments may not yet be amortized.”

Companies planning to adopt a cloud solution also have to watch out for “hidden costs”, which may include staff capabilities and resistance due to the inability to migrate, integrate and/or manage workloads. “However, if IT resources are constantly in firefight mode and operating under unpredictable outcomes and costs, then partnering with cloud service providers could outweigh the costs of training and/or hiring staff with the necessary skills,” Azenkot adds.

The complexities of transcoding video for an increasing number of screens and formats provide a strong argument for an OPEX model, however. Outsourcing this to a cloud infrastructure provides instant scale without the need to pay for idle server time. It also enables media companies to maintain a virtual evergreen infrastructure without having to invest in the equipment themselves. Additionally, a utility approach to managing video encoding workflows allows broadcasters and content owners to cost-effectively scale up or down quickly to handle fluctuating workloads.

“This is typical for large media companies or high-volume publishers where processing large video files or large content libraries is a challenge, and cloud-based transcoding solutions have enormous advantages over on-premise transcoding, with better ROI, faster speeds, and massive scalability,” says Brightcove’s Ben Morrell, Senior Technical Consultant for Media.

A boon to live streaming

For instance, in live video streaming, media companies typically invest in expensive transcoding hardware to ensure a high-quality experience across devices. Moreover, uplink bandwidth at the event site can be a bottleneck, limiting the ability to publish adaptive bit rate streams or dramatically increasing the cost of an event to secure outbound bandwidth. The expense and difficulty in scaling and operating these events is also multiplied as the number of streams, formats and events increase.

Encoding in the cloud changes these economies for live video events.

“Essentially, hardware equates with predictable usage and the cloud to scalable usage. If a customer knows exactly how much usage they will have or that they can share capacity with other internal teams, then hardware can be suitable,” explains Morell.

“However, many companies are faced with spikes of usage, so the cloud gives them bursting partial/hybrid usage, or they can also go for 100 percent usage.”