Turnkey Vs. Virtual Vs. Cloud Form Factors
With heightened publicity for cloud-based services, operators
worldwide re-evaluate their end-to-end architecture and associated
cost structure looking for efficiencies, opportunities, and competitive
edges. Turnkey appliances, COTS-based virtualization (private cloud)
and 3rd-party commercial cloud-based SaaS are the three form
factors being considered. [Hereon, we will use turnkey, virtual, and
cloud to refer to the three form factors.] As encoding/transcoding
extends to more than 80% of the processing power requirements of
the entire multiscreen video delivery value chain, the focus is put on
multiscreen encoders/transcoders. This white paper introduces a
framework for the stakeholders in identifying the most appropriate
encoding/transcoding form factor for their operations.
DATA CENTER INFRASTRUCTURE
For operators who already have access to a data center infrastructure,
the introduction or expansion of multiscreen encoding/transcoding
presents a minimal incremental cost for ground or virtual form
factors compared to the cloud-based one. Notable exceptions are
when the services are temporary or infrastructure improvements are
substantial (e.g. power or cooling expansion). Operators with data
centers standardized on COTS equipment often benefit from reduced
acquisition and maintenance costs, favoring a virtual versus turnkey
encoder form factor.
The ingress aspect plays a substantial role to the form factor
decision. Very high-quality uncompressed feeds (over coaxial SDI or
in SMPTE 2022-6, 7 - SMP TE 2110 transports over IP) are unsuitable
for a cloud. Hybrid workflows, where uncompressed content is lightly
encoded and pushed to the cloud for final processing, appear to
introduce quality degradation, additional points of failure, latency,
complexity, and cost. This workflow is only suitable for sites with
limited bandwidth (e.g. sports or concert venues, news gathering etc).
However, already compressed content, such as satellite feeds, is
generally easier to transport. Aspects such as latency and packet loss
protection determine the appropriate form factor, as low latency transport
from ground to the cloud can be prone to packet loss or high costs.
In file transcoding or playout-based linear services, a cloud-based
transcoder is a sensible choice if certain synergies exist (i.e. assets are
stored on the cloud).
Finally, some cloud providers charge for ingress traffic, and this can
be prohibitive for 24x7 services.
SERVICE LIFE TIME
Established, predictable business, such as 24x7 services, are far more
economical in a turnkey or virtual form factor. A virtualized OpEx-based
encoding solution can cost 2-3 times that of a turnkey appliance one over
t wo years. In a two year period, a cloud-based encoding solution may
cost 8-10 times that of a turnkey appliance. Even accounting for a 3-year
turnkey appliance lifetime and accelerated decreases in cloud services
prices, the TCO gap bet ween those two platforms is unquestionable.
However, short-term services (such as the Olympic Games) or
temporary business (such as POCs) can be better accommodated in a
virtualized ground form factor, if the COTS infrastructure is available,
or otherwise on the cloud. As temporary/uncertain projects mature to
secured business, operators can migrate workflows back to the ground
(turnkey or virtual) and streamline their costs.
Finally, short-term event-based services, like sports are often served
by cloud encoding platforms. Content aggregators and event organizers
that serve thousands of hours of live events per year generally resort
to virtualized, orchestrated encoding solutions that are as flexible but
substantially more cost effective than 3rd party cloud-based ones.
CAPEX VS. OPEX INVESTMENT
Turnkey encoding solutions expect an often-sizable initial CapEx
investment, versus a more limited, balanced CapEx/OpEx mix of a
virtual-based one and a pure OpEx one for cloud-based encoding
solutions. OpEx related form factors are easier to model and price, and
they are often favored by operators selling popup channels or event-based services. CapEx investments require strategic planning but
offer substantial savings in the mid- and long-term. Operators should
inquire about creative purchasing models such as lease-to-own turnkey
appliances and perpetual licenses for virtual encoding platforms.
Cloud service providers also offer discounts for longer contracts and
An important aspect of OpEx-related architectures is that cash
outflow for expenditure is more closely aligned with the cash inflow of
the revenue generated by the service. Contrarily, a CapEx investment
typically presents a substantial time gap bet ween those cash flows
and warrants careful working capital management. In such cases,
operators should negotiate more favorable payment terms with their
AGILITY AND SCALABILITY
Contrary to traditional broadcasting, more than 90% of multiscreen
encoding business worldwide is powered by IT/x86-based platforms
versus dedicated ASIC/SoC-based ones. Operators can easily upgrade
services as new technologies emerge and standards solidify. Agility
is not an attribute of the form factor, but directly relates to product
development practices of the encoding vendor. Therefore, operators
should evaluate versatility and adaptability of their encoding solution.
If/when it is not sufficient; virtual and cloud-based form factors
facilitate switching encoding vendors, as long as they are not locked
in a closed ecosystem.