Businesses are increasingly relocating their critical operations, workflows, and applications to the cloud. Worldwide spending on public cloud services is expected to double from almost $70 billion in 2015 to over $141 billion in 2019, according to research firm IDC. The shift is driven by a range of factors stemming from rising demands for storage, scalability, security, mobility, innovation, and more – all of which begs the question regarding video hosting costs of cloud vs. on-premises deployment scenarios.
With enterprise video gaining momentum across industries, businesses turn to the cloud to optimize the cost burden associated with mounting needs for video hosting, including its storage, processing, management, security, accessibility, innovation, and more.
However, when considering a move from an in-house architecture to the cloud, the most notable concern for most CIOs is the video hosting costs of cloud vs. on-premises deployment environments.
So what are the video hosting costs associated with each deployment model? Will moving to the cloud reduce or add to a company's long-term expenses?
The video hosting costs associated with both deployment models are multidimensional. On-premises video hosting costs do not simply begin and end with how much infrastructure is required to setup a solution, and neither are cloud video hosting costs limited to the monthly subscription fees or service costs.
How to measure cloud vs. on-premises video hosting costs?
Here is a detailed breakdown of tangible video hosting costs involved in an on-premises infrastructure compared to cloud, particularly in Software as a Service (SaaS) model:
|Video Hosting Cost Factors||On-Premises Video Hosting Costs||Cloud Video Hosting Costs (SaaS)|
|License and subscription||
High cost for perpetual yearly license for video hosting application or software; an additional cost may be applied if new users or modules are added to the system.
Medium-high cost for monthly subscription-based license for video hosting application; vendor may increase rates upon expiration of subscription term. With BYOSL, customers may enjoy flexibility of using their pre-existing cloud licenses.
|Installation and setup||
High cost for installation of video hosting application, database configurations etc.; a major upgrade installation in the future would also incur high costs.
|Low-medium installation fee charged by vendor for video hosting application; no cost for upgrades as upgrades are incremental in nature.|
|Hardware/ capital expense||
High cost for capital expenditure on video hosting hardware, applications, database servers, PC and networking infrastructure, operating systems, middleware.
|Low video hosting hardware costs with zero in-house servers.|
|Data migration||Medium-high cost for upfront data migration; low cost data transfers between systems, no internal migration cost.||
High costs for outbound data or egress traffic as transfers over basic monthly allowances are charged on per GB basis; high cost for downloading data from cloud; Inbound data transfer (ingress traffic) is usually free.
|Training & hiring||High cost for hiring IT experts and training staff for management and maintenance of critical onsite video hosting hardware and datacenters.||
Medium cost for setting up vendor training sessions, bringing trainers onsite, participating in webinars, custom courses; low cost for SaaS video hosting application that involve online training or in-line help functions.
|Storage||High cost of buying additional storage because it extends capital expenditure on video hosting storage servers.||
High cost for additional storage but cloud storage costs continue to decrease overtime; extra storage can be added without expenditure on additional video hosting hardware.
|Customizations & integrations||High customization and integration costs because on-premises systems are usually heavily customizable to improve developer tools and integration with existing systems.||
Low customization costs because SaaS systems offer limited customization options. However, this may change with increasing customization and integration options in SaaS systems.
|Maintenance & management||
High cost for video hosting infrastructure maintenance, monitoring and management of on-premises infrastructure such as power, cooling, rackspace, site maintenance etc.
|Low cost basic maintenance fees bundled into subscription fees.|
Medium costs for support included in annual maintenance contracts.
|Basic support is bundled in monthly subscription fees but there is a high cost for premium support options.|
|Operational/ monthly expense||
Low operational expenses as there are fewer extra charges on top the annual contract.
|High operational expenses due to monthly expenditure on cloud subscription and usage costs for video hosting application.|
|Bandwidth||Medium-high cost for bandwidth consumption for video hosting application; buy and install more computing resources to increase bandwidth.||
High cost for bandwidth usage if bandwidth usage is less predictable and customer might end up using a lot on bandwidth depending on video hosting workflows. Unpredictable bandwidth usage could be cost-prohibitive in case of a cloud video hosting scenario.
|Downtime cost||More downtime experienced on-premises incurring higher business costs and revenue losses as a result.||
Cloud providers like Microsoft guaranteeing SLA of over 99% uptime means downtime cost is significantly minimized.
|Resource planning (scaling up/ scaling down)||High cost for scaling up because video hosting hardware has to be bought and setup; high cost for storing over-provisioned hardware once usage drops because scaling down is not easy or practical.||
Medium cost for scaling up as customer is charged for increased usage of resources; no video hosting hardware expense; no cost-inefficiencies as user can scale down anytime, no over-provision cost.
|Hardware replacement||Video hosting hardware replaced every 3-4 years, again incurring high costs for capital expenditure.||
Low cost as vendors pays for hardware replacements and customers pays small incremental costs.
High cost for in-house video hosting software upgrades and feature enhancements because it is expensive and time-consuming.
|Upgrades are automatic and often included in the monthly subscription fees costs.|
High costs for onsite security and compliance policy implementation.
|Security and compliance expenses borne by the cloud vendor or adjusted in cloud services; free services charged once they surpass the restriction threshold.|
|Backup & disaster recovery||
Medium costs of on-site backup is stored onsite or offsite for disaster recovery.
|Backup and recovery cost include in cloud membership/ subscription cost.|
Insurance costs; antivirus; unplanned repair in case of server crashes and data recovery
|Maxed out virtual server can inflate costs overtime; to many registered admin|
What about the intangible video hosting costs?
Taking a deeper dive into cloud’s intangible video hosting capabilities reveals cloud has become essential to most 21st century video-driven work culture. With organizations becoming increasingly globalized, the need for greater accessibility, mobility and scalability in a secure environment has expended into all arenas of business – all of which is further facilitated by cloud-enabled video hosting.
Following are ways in which cloud-enabled video hosting enables modern business culture to thrive outside the bounds of geographic limitations:
Mobility: With cloud video hosting, employees in an organization are free to utilize all streaming video and digital media content anytime, anywhere, which allows them the flexibility to work on the go while travelling, work remotely, or while working from home.
Accessibility: Cloud video hosting makes all digital media accessible on any device, may it be laptops, smartphone, or tablets, giving employees the convenience to use whichever device they prefer. Cloud video hosting also encourages organizations to promote ‘bring your own device’ culture to save costs.
Security: Major cloud service providers like Microsoft, Google, and Amazon (to name a few) have employed the highest level of technological security and compliance policies in their cloud ecosystem, which provides highly fortified security and compliance for all cloud video hosting.
Scalability: Cloud solutions are infinitely scalable which gives organizations the ability and flexibility to scale their video hosting and digital media capabilities and operations, and innovate without worrying about physical expansion of the video hosting infrastructure or resources.
Centralization: Cloud offers centralized access to all video hosting infrastructure, which is best suited for companies operating multiple offices in different geographical locations with a geographically dispersed employee base.