Cloud Video Architecture: Buy or Build?
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Read the complete transcript of this clip:
Tom Vaughan: At the end of the day, we have a fundamental question. Do I build or do I buy? Or do I do some level of both? And that's really the key question you have to answer. Certainly, there are many vendors, when you come to Streaming Media East, some of those vendors are here. But if you go to the other video trade shows--NAB, IBC--you'll see all of them, right? They all have big booths and there's the Harmonics and the Elementals and then Azure Media Services and dozens and dozens of vendors who have fairly complete solutions on one flavor or another of transcoding frameworks that can meet all kinds of requirements and specifications.
That's one end of the spectrum. In fact, I could use a cloud service. I could just have someone take care of everything for me. I'll send all the content there. I get on a web interface, I interface with that, I talk to it through APIs and they handle everything for me. That end of the spectrum is likely to be more expensive, operationally, in the long run, but very low upfront costs or friction to get started.
So, that may be a good place to start if you're spinning up a new service. Bigger companies who have more resources, they wanna own it a bit more, right? They wanna have a large development team, building that service, customizing it, for competitive advantage. And so they wanna have their hooks in it, they wanna really be able to customize it to do anything they want. And so they're gonna be a little more towards the build end of the spectrum. And they have a variety of choices.
The very biggest companies like Netflix, Amazon, others went so far as to hire very large engineering teams. Of course, they were early entrance and there was very little for them in the web video space to buy. So they built based on kind of component building blocks, open-source libraries, ffmpeg, x264, et cetera, and build out the whole capability. And for VOD, that's a little bit easier. For live, that's certainly a bit harder. But, it does require quite an investment. You have to be serious to hire hundreds and hundreds of engineers to build out everything you want and need.
So there are some options sort of in the middle for developers, for people who wanna customize things. They can buy some of the core technologies and components as kind of complete libraries and modules. Beamr's a company that does make those type of solutions that are a little bit more powerful than building from the ground up. But, there are a number of others and certainly cloud vendors like Azure Media Services offer those discrete capabilities for development teams who really wanna customize their capability.
As a business person, this "buy versus build" decision is made by many, many companies in many markets and industries, right? It's a very common question to answer and to ponder. And, when I went to business school, the way we were taught to think about it, which I think is correct, is your company and your business has some key sources of competitive advantage.
And, it's different for every company, right? You might be the low-cost provider and I just make sure everything's cheaper than the other guy and so there's a certain segment of the market that's always gonna come to me 'cause they're very price-sensitive. You might have unique content. You might have your own content or you have some unique reach or unique audience you're trying to serve, and you're customizing for that particular segment.
So, at the end of the day, you probably want the developers, your staff that you've invested in to focus on the things that build your competitive advantage and extend your competitive advantage. Building that service, right? Building the customer-facing pieces, the capabilities, the features, or extending your reach into places you want. You don't want them building core building blocks that someone else has already built and you can license cheaper than it would cost you and your team to build and you can get started a lot faster. So, that's probably the high-level way to think about where you wanna make your investments.
Streaming Media's Jan Ozer interviews Beamr VP of strategy Tom Vaughan in the Beamr booth at NAB 2018 about HEVC and AV1