Strange business. Professional encoding tools are about $5-6K, so they cater to folks who have large needs, but not large enough to warrant a $6K investment.
(We're also entirely API-based for programmatic high-volume encoding, so if you're thinking of things like video editing and manual post-production, that's not really what we do.)
So why wouldn't folks use the API on (say) Rhozet's tool and maintain control of the flow?
> We do what the "professional" non-cloud tools do, but in the cloud,
Yes, I assume that you have a "professional" engine since you have a team of only 20 people.
> and we have many customers who are investing more than $6,000.
Kudos. Now when they find out that they can take the transcoding API in house for about that much money, what financial incentive will they have to stay with Zencoder?
FULL DISCLOSURE: I worked pro video at Apple and am now a very happy employee of Zencoder.
But costs less. THAT is the point. (A quad-core is almost there, dual hex xeons will provide 10x capacity. Not enough? Add more cores. At $2000/mo, the payoff is pretty easy in less than a year.)
Look: You guys have a business which is not yet breaking even. Perhaps that will fix itself with a bunch more customers. But as with all businesses, once your invoices start showing up on the CFO's screen, he is going ask to design you out. He will walk down to the office of his head IT geek, who is always trying to justify his salary, and say: What does it cost to take this in-house?
You think the IT geek is going to say: Oh no. We need to have that in the cloud.
Really?
I'm probably missing something, so I'd be happy to be enlightened.
If our application was positioned to take advantage of Zencoder, I would use their service in a second.
I'm looking at their $2000/mo plan for 100,000 minutes of video. Compare: Modern hardware does HD faster than real time, there are 43,000 minutes in a month. So for a quad core machine, you already have a comfortable margin.
Wha? You think that Zencoder wrote their own codecs?
They're selling an API and cloud tech, and with 20 people are certainly wrapping somebody else's encoding.
(1) I recently joined Zencoder. Consume appropriate amount of salt.
Regardless, good luck with the new gig.
No it does not.
A low priced quad core is already in excess of their highest listed service, for less money.
Put a dual hex xeon into service and you have at least 10x the capacity (remember that even HD transcodes at faster than real time), and it pays off in less than a year.
Hardware / software licenses is an investment, cloud is opex (operational expense): it means you don't invest much upfront (Zencode, Amazon, etc. made that investment for you), but you pay over time. If your treasury is low you may not even have a choice between investing or using the cloud to begin with.
So you are going to say: in the long run, opex is more expensive than a wise investment that pan out well.
That's called risk management, and is the main reason many companies choose cloud services over in-house. You might invest in the wrong hardware, the wrong licenses in the case of encoding audio/video, or the wrong Linux/*BSD/Windows administrators. Switching away from Zencoder is comparatively easy and cheap.
It's a trade off, you are basically paying a premium to reduce your risks.
It's an exchange of risks, not a reduction. You incur a sizable business risk by putting a nonprofitable company in your critical path.