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Cloud: The Launchpad, ASIC: The Rocket Ship - Owning Your Infrastructure for Sustainable Growth

Cloud: The Launchpad, ASIC: The Rocket Ship – Owning Your Infrastructure for Sustainable Growth 

The cloud is a great resource for launching new products and services, particularly interactive streaming services, where capital costs can be high and demand uncertain and highly variable. Still, it’s crucial to remember that the cloud, while a remarkable launchpad, isn’t the ideal rocket ship for sustained flight. To truly soar towards profitability and long-term success, owning your transcoding infrastructure, particularly ASIC-based solutions, can become the game-changer.

cloud as the great equalizer for small businesses

Cloud services, like nimble spaceships, offer undeniable advantages for nascent streamers. They provide instant scalability, eliminate upfront hardware investments, and simplify operations. As authors Kate Duricko and Miranda Adams observe in BizTech Magazine, the “cloud is the great equalizer for small businesses. While larger budgets allow enterprises to purchase more on-premises hardware and spend on skilled staff, cloud solutions provide a way for small and midsize businesses to access enterprise-level resources and computing power on demand.”

Startups and businesses testing the streaming waters can leverage the cloud’s flexibility to experiment, adapt, and iterate swiftly. However, the cost equation shifts dramatically as streaming audiences soar and demand explodes.

The Cloud's Costly Tailwind

While the cloud seems initially light on the wallet, its true price tag unfolds as volumes escalate. Each transcoded stream incurs recurring per-use fees, leading to a ballooning operational expenditure (OPEX) as your audience grows. In addition, as your encoding needs get more sophisticated, using a service provider constrains your operation to their vision, not yours.

In these cases, on-premise equipment offers a tempting alternative. The upfront investment might seem steep, but long-term operational expenses are undeniably lower; often significantly so. Broadcasters also gain complete control over their systems, tailoring encoding, transcoding, and delivery to their specific needs. This flexibility translates to a more efficient and customized streaming experience for viewers, reflecting the broadcaster’s unique brand.

Real-world examples show the potential. Swedish telecom operator Sappa found cloud transcoding wasn’t cost-effective for their live OTT channels. They migrated on-premise to gain control, upgrade to new services, and reduce overall costs. Similarly, A1 Croatia, a Croatian telecom company, switched for similar reasons, enjoying increased energy efficiency and a future-proof platform.

Entering the ASIC Orbit

Once you consider on-premise equipment, ASICs become the obvious choice. ASICs, or Application-Specific Integrated Circuits, are custom-designed chips built for a single purpose – in this case, transcoding video with unparalleled efficiency. While the initial investment in hardware might seem daunting, the long-term savings are quite substantial (see here and here). This translates to a dramatic improvement in profit margins, freeing up resources for content creation, marketing, and audience engagement.

That’s obviously why both Meta and Google have transitioned much of their transcoding from CPUs to ASICs, with Google claiming that their ASIC, called Argos, replaced over ten million Intel CPUs. Once you decide to quit the cloud, it’s critical to transition to the most efficient transcoding technology available, which ASICs clearly are.

Owning Your Destiny

Beyond mere cost savings, owning your transcoding infrastructure grants you unparalleled control and resilience. You’re no longer beholden to the whims of external pricing changes or service disruptions. As your streaming empire expands, ASICs scale effortlessly, handling even the most demanding workloads with unwavering performance. And you gain complete command over video quality and latency, shaping the viewing experience according to your exacting standards.

From Seedling to Sequoia

Think of the cloud as a nurturing greenhouse, offering the perfect environment for your streaming seedling to sprout. It provides the initial warmth and support to launch your venture. However, as your business matures and ambitions blossom, transitioning to owning your infrastructure, symbolized by the robust growth of an ASIC-powered system, becomes the key to reaching your full potential.

The cloud might be the perfect launchpad, but for enduring success in the streaming cosmos, it’s time to ignite the power of your own ASIC-powered rocket ship and chart your independent course toward streaming stardom. By embracing the shift from cloud dependence to ASIC ownership, you empower your streaming venture to transcend the confines of survival and chart a course toward long-term, sustainable success.

Jan Ozer

Jan Ozer

is Senior Director of Video Marketing at NETINT.

Jan is also a contributing editor to Streaming Media Magazine , writing about codecs and encoding tools. He has written multiple authoritative books on video encoding, including ‘Video Encoding by the Numbers: Eliminate the Guesswork from your Streaming Video’ and ‘ Learn to Produce Video with FFmpeg: In Thirty Minutes or Less’ and has produced multiple training courses relating to streaming media production.

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author avatar
Anita Flejter
is a Director of Digital Marketing at NETINT and a producer of Voices of Video bi-monthly event and podcast, as well as Hard Questions on Hot Topics - a weekly discussion with Jan Ozer.
author avatar
Anita Flejter
is a Director of Digital Marketing at NETINT and a producer of Voices of Video bi-monthly event and podcast, as well as Hard Questions on Hot Topics - a weekly discussion with Jan Ozer.