Cloud vs On-Premise OTT Platform: Which Is Better For Your Business?
Cloud or on-premise? It’s not just about following the trend. Let’s unpack the pros and cons of cloud vs on-premise video solutions.
Video content today is a big part of how businesses connect with customers and stand out in the digital marketplace. Therefore, choosing between cloud video services for effortless streaming and maintaining full control in your own location isn’t just technical—it’s strategic. Whether you’re leaning towards the scalability of cloud OTT solutions or the control of on-premise setups, this decision impacts everything from your operations to your budget. Let’s break it down!
A deeper look at OTT technology
Over-the-top (OTT) platforms represent a significant evolution in how multimedia content is delivered and consumed. Unlike traditional media delivery that relies on broadcast schedules and cable subscriptions, OTT technology allows users to access video and audio content via the internet, bypassing traditional distribution channels altogether.
These platforms are more than just conduits for streaming video; they are sophisticated systems designed to manage, optimize, and deliver various types of media content directly to consumers across multiple devices. For that reason, it’s essential to recognize OTT platforms as comprising several critical components that collectively ensure these platforms can meet the diverse needs of their audiences, rather than viewing them as a single, unified entity.
Let’s now examine the essential components that form the backbone of every successful OTT platform.
OTT video processing and delivery
At the heart of any OTT platform is its video processing and delivery system, which ensures that content reaches the audience in the optimal format. Here’s how it works:
- Video Transcoding and Packaging: Adapts raw video files for seamless playback across a range of devices. Converting videos into multiple formats guarantees that all video content meets specific device compatibility and maintains high quality, regardless of the viewer’s hardware.
- Live and Video On Demand (VOD) Services: Enables both real-time broadcasting and on-demand access to content, so that users can stream live events as they happen and access a rich library of archived shows and movies at their convenience.
- Enhanced Viewing Features: Advanced services like catch-up TV and Personal Video Recording (PVR) allow viewers to catch up on missed programs and record content to watch later, directly catering to their convenience and preferences.
OTT platform backend
The backend is the operational hub of an OTT platform, where several essential processes are managed such as:
- Content Management: Ensures that all video content is organized and readily accessible, making it easy for viewers to find and enjoy their preferred shows and movies.
- User Registration and Management: Streamlines the registration and account management process, allowing users to easily sign up and manage their subscriptions.
- Transactional Operations: Handles all purchase and subscription processes efficiently, playing a crucial role in the platform’s ability to monetize its offerings.
- Client API: Facilitates communication between the platform and end-user devices such as mobile apps and smart TVs, ensuring a consistent and integrated experience across all touchpoints.
Supporting services
These auxiliary components play crucial roles in optimizing the service and ensuring compliance and quality:
- Digital Rights Management (DRM): Protects content against unauthorized use and piracy, a must-have for content creators and distributors.
- Analytics and Quality of Experience (QoE) Services: Provides insights into viewer behavior and video performance, crucial for enhancing user satisfaction and service optimization.
- Artificial Intelligence (AI): Employs smart algorithms to improve content recommendations, ad placements, and viewer engagement.
When to choose a cloud environment and when to go on-premise
One key point to understand is that the core components of an OTT platform—video processing and delivery, backend operations, and support services—can be effectively deployed either in the cloud or on-premise. The right choice depends heavily on your specific business needs, whether you’re aiming to optimize costs and expand your reach with cloud solutions or prefer to maintain tighter control with an on-premise setup.
In our experience, while cloud deployments often offer greater flexibility and scalability, there are compelling reasons to opt for traditional on-premise servers. Let’s dive into various scenarios to better illustrate the benefits of each video setup.
Video processing
With video processing and delivery, the choice between cloud and on-premise solutions often depends on specific client needs. Typically, however, we often recommend cloud platforms due to their robust ability to handle peak viewership and offer scalability on demand.
Here’s a closer look at the benefits of each approach.
Cloud setup
- Cost Efficiency: Cloud solutions reduce CAPEX by eliminating large upfront investments and ongoing maintenance. Pay for what you use and easily adjust to current needs, optimizing budgeting and preventing idle resources.
- Service Availability: Services are instantly available, allowing you to enable or disable features as needed. Launch a live channel temporarily or add features like automated subtitling through generative AI—cloud setups with partners like AWS handle these seamlessly, without extra equipment.
- Storage Solutions: Cloud storage offers virtually ‘unlimited’ capacity, ideal for VOD libraries and catch-up nPVR. It supports large data volumes and features cost optimization tiers, reducing expenses for storing older titles.
- Maintenance and Updates: Cloud solutions streamline maintenance, with providers managing updates and upkeep, ensuring components like encoders meet the latest standards without extra costs.
- Redundancy: Cloud setups include built-in redundancy, enhancing reliability and availability. Achieving similar redundancy on-premise involves costly and complex infrastructure setup.
On-premises setup
- Cost Savings. On-premise solutions can be cost-effective, particularly if an organization already possesses the necessary infrastructure. This setup eliminates the ongoing cost associated with cloud service subscriptions
- Compliance and Control: On-premise systems offer full control over your streaming process, from data centers to hardware. Ideal for sectors needing data sovereignty and comprehensive operational oversight.
- Connectivity. Video processing setups typically require a signal feed. For the cloud, this must be done via a reliable connection (internet or dedicated). When this is not available, an on-premise solution with direct connectivity to the source signal might be a better option.
Consider the Champions League finals — a unique event that vividly illustrates the challenges of managing OTT platforms.
For most of the week, the platform might experience regular traffic, but suddenly, just three minutes before the match starts, over 100,000 fans might try to log in simultaneously. This scenario isn’t just about handling high viewership peaks; it’s primarily about managing a massive number of users trying to access the platform simultaneously without causing disruptions or delays.
Cloud solutions are particularly adept at handling such spikes efficiently. Their scalable infrastructure can quickly adapt to sudden increases in demand, ensuring that the service remains smooth even under extreme load. However, if such events are only seasonal or semi-regular—like the recent UEFA Euro 2024 championship—the on-premise equipment might remain unused for most of the year. This can lead to significant underutilization of resources, where you might end up paying for infrastructure that isn’t actively contributing to revenue generation.
On the other hand, for broadcasters running multiple channels with constant, 24/7 live streaming, the costs associated with cloud services can accumulate quickly. In such cases, balancing the scalability benefits of cloud services with the ongoing costs becomes crucial.
OTT platform backend
Our approach for the OTT backend is to deploy it in a flexible, managed cloud setup that provides scalability and simplified maintenance. Nevertheless, in some cases, on-premises solutions should be considered for unique situations that demand a tailored on-premise infrastructure.
Here’s a closer look at the specific advantages of each setup for OTT backend.
Cloud setup
- Elastic Scaling. Cloud video environments offer the ability to scale resources up or down based on demand, ensuring that you can handle spikes in viewership without performance issues.
- Global Reach. With services like AWS Global Accelerator, cloud platforms provide low latency and high availability through a global network of data centers, enhancing user experience worldwide.
- No Upfront Cost. Cloud services require no significant initial investments in hardware. They are ready to deploy immediately, reducing time to market and facilitating rapid implementation.
- Managed Service: The provider handles maintenance, updates, and upgrades, keeping your system current with minimal effort. This frees your team to focus on content and service delivery instead of infrastructure.
On-premises setup
- Data Sovereignty. On-premise solutions can be crucial for businesses needing to comply with specific regulatory requirements related to data residency and sovereignty.
- Full Control. On-premise setups provide complete control over both the hardware and software environments, allowing for customization and optimization to meet specific performance and security needs.
- Cost Savings: Leveraging existing infrastructure for an on-premise OTT backend avoids recurring cloud costs and provides clear CAPEX visibility, aiding predictable budgeting.
Supporting services
When it comes to supporting services for your OTT platform, leveraging Software as a Service (SaaS) solutions, particularly those that are cloud-based, is often the smartest move. SaaS offers unparalleled reliability, scalability, and a managed service approach that can significantly reduce your operational burden.
Take Cloud DRM, our Digital Rights Management services, for example. This solution ensures robust digital rights management without the need to develop and maintain your own system from scratch. By using a service like Cloud DRM, you can streamline content protection, allowing you to focus on expanding and enhancing other areas of your business.
While on-premise solutions might be necessary for very specific scenarios, such as implementing DRM on airplanes or ensuring total data privacy, these are exceptions rather than the rule. In most cases, the pay-as-you-go model of cloud services not only makes financial sense but also provides the flexibility to scale as your needs evolve.
Is your strategy cloud-ready or grounded on-premise?
Deciding between cloud vs on-premise video infrastructure doesn’t come with a universal playbook. Each option offers distinct advantages, whether it’s the scalability and flexibility of cloud solutions or the control and security that come with on-premise servers. What’s important is identifying the choice that aligns with your business strategy, technical requirements, and future growth aspirations.
Let Insys VT guide you through your video streaming dilemma.
Need guidance? With the complexities of video content delivery and network infrastructure, it can be daunting to find the right solution. Whether it’s on-premise, in the cloud, or a mix of both, our team is here to help you make an informed decision.
A hybrid approach, for example, is often a practical middle ground for businesses not ready to fully commit to the cloud or those looking to maintain some control over their physical infrastructure while embracing the flexibility of cloud computing.
Don’t hesitate to reach out. We’re here to explore these options with you, ensuring you choose an OTT solution that meets your current needs and sets you up for future success.