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What is the ROI of Cloud vs. On-Prem Streaming?

What are some of the primary factors that drive the decisions to move workflows to the cloud versus remaining on-prem? Eric Schumacher-Rasmussen, Chair, Streaming Media Conferences, and CMO, id3as, talks with three key industry figures about the wide range of variables driving cloud migration within their organizations.

Schumacher-Rasmussen kicks off the discussion with a broad question: “When decisions about cloud migration are being made, most often, do you find that those decisions are use-case-driven? Are they connected to technical feasibility issues, or are they based on more business/financial considerations?”

Schumacher-Rasmussen first asks Jef Kethley, Executive Director/President, LiveSports, LLC, about his experiences. “I'd like to turn to you Jef,” he says, “because you adopted cloud – or as you call them, ‘distributed,’ and I like that term – workflows more aggressively than just about anyone else we know on the production side.”

“I think that most of our decisions probably start from the beginning,” Kethley says. “'Does it make the most cost-effective sense?’ But it's not for every application.” Kethley highlights the ways that this baseline financial approach can vary with each use case. “If you wanted to do it hybrid, going back to a colo, or go back to our MCR [Main Control Room], we could definitely do that, but it is so easy for us just to spin up our VPC [Virtual Private Cloud] or a different VPC and create our infrastructure there. And then I don't have to worry about punching holes in my firewalls and doing other things back at our normal MCR. The MCR is just controlling the VPC at that point. And for me, for the per machine $2 an hour, or whatever it is that I'm using, it's just cost of doing business at that point and it just makes it easier to have other people involved in our workflows instead of me having to bring them back to a hybrid situation, bring them back to the MCR, or a truck or something of that nature.” Kethley then highlights his present workflow situation as an immediate example. “We're sitting here at a university site,” he says. “I fought with IT for three days to get port forwarding and open IPs and things like that. Three days. I could have done it in three minutes on the cloud.”

Corey Smith, Sr. Director, Advanced Production Technology, CBS Sports Digital, Paramount, remarks, “I think for a live sport type of workflow, it's going to be hard to get rid of trucks because people are used to having that Tier 1 look and feel, they have physical infrastructure on the ground at the actual event. So things like the Super Bowl and Wimbledon are always going to have this kind of Tier 1 infrastructure deployed.” However, he mentions some ways that he would like to see these types of live event workflows become more integrated with cloud automation. “What I hope happens from an industry perspective is that we're able to supplement what's actually on the ground with workflow and automation in the cloud, that we can bridge the two worlds together in a way where it actually makes sense,” he says. “So it's actually complementary to what our ground operations folks are having to do because we're tying in this huge amount of facility infrastructure that's not on site and making it available to the ground-based guys to be more effective in creating the product that's compelling to watch.”

“I completely agree with that,” Kethley says. “That's how we got into cloud. We were hitting a certain limit of what we could put in a truck and what we could staff in a truck because of what we were doing, but our clients wanted to see more content. We do a lot of professional tennis. You mentioned Wimbledon – that's not one of ours, but we do a lot of professional tennis, and so more equals more for everybody. They want to see more courts, they want to see more play, they want to see everything expanded. There's only X amount of space that we could put a truck or trucks, or there are just no compounds like you have at the really big shows. But because of the level of what we're doing – which is the Challenger circuit and the tour level on the ATP tour – we are able to go in and leverage SRT workflows, LRT workflows through LiveU, other uplinks through Siennas so that we could get that content up to the cloud and then do the mixing and do the graphics and do the replay and everything in the cloud without having to dedicate more space. Because every bit of every inch here on a site is valuable to that tournament, they don't want all these trucks lined up and backed up. They want to have to deal with just one vendor, but they still want more content. So that's exactly what we're doing: just giving it more. But by leveraging the cloud infrastructure, we can give it to them in a more cost-effective way.”

Michael Koetter, SVP of Digital Media Systems, Warner Bros. Discovery, talks about how a cost-driven approach to looking at cloud computing workflows led to several important and surprising discoveries. “It was interesting when we really started peeking into it,” he says. “It's not just a comparison of the straight-up procurement of the tech to whatever the cost of the cloud is over X number of years, whatever your depreciation period would be on that CapEx spend. But then we started peeling back the software maintenance agreements and the amount of people's time that goes towards that, the power and the Rackspace and the value of that technical real estate that's required and adding up the fraction of people's time that takes to do the whole kind of procurement commissioning integration workflows…when you really got to the end of that, it was shockingly expensive…our eyes were kind of popping because we'd actually never done that before; we'd never had to.”

Ultimately, Koetter notes, these startling financial revelations were very valuable in terms of directly demonstrating the cost-effectiveness of cloud computing. “Having that number of an average cost of 1 RU of high-density data center compared to something in the cloud made it a pretty straightforward calculation for us to say, ‘Well, here's a cloud system. If we had on-prem, it would be this many RU of stuff.’ We could pretty quickly come to a return on investment.” He states that it was around 2020 that “things started to actually be more cost-effective cloud side…there's a lot less cash out the door on day one because you're only getting in for that year's cost. And then if the business needs to pivot at some point, they don't have to figure [it] out, like they're making this gigantic bet all at once. But I think absolutely it's been a very financially driven exercise. And I think as time goes on, it's less and less a question of feasibility. We know we can do it.”

Learn more about cloud-based workflows at Streaming Media West 2022.

Watch full-session videos from Streaming Media Connect 2022.

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