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Feature Q&A: Microsoft and Movideo Enter Strategic Cloud PartnershipTony McGinn, CEO, Movideo and Cameron Moore, CTO, MovideoQ.What did Movideo and Microsoft announce today?TMToday Microsoft and Movideo announced a four year strategic agreement which will see Movideo migrate its digital media content platform across to Windows Azure to assist in driving business growth across Asia.Q.Who and what is Movideo?TMMovideo is an online video platform created within publicly listed Australian media business, MCM Entertainment Group in 2006. In 2008, MCM established Movideo as a Software as a Service (SaaS) and consulting business within the group. We understand that marketers are now content creators and we help to deliver this content to end-users. Movideo partners with media companies and digital agencies to deliver video content to their clients, no matter the device. Q.Who are some of Movideo’s customers in Asia?TMMovideo services over 30 customers across Asia including Network Ten in Australia, MNC Indonesia, South China Morning Post Hong Kong, Singtel Singapore and Astro Malaysia.Q.Can you elaborate and explain the strategic cloud partnership with Microsoft? TMThe partnership with Microsoft is a technical alliance whereby Microsoft’s Windows Azure will become the infrastructure platform for our cloud SaaS product, Movideo. There are a number of tremendous benefits from this partnership. Firstly, we are aligning ourselves with a strong product development roadmap with Windows Azure and we’re very excited about where this roadmap will take our business. Secondly, it enables us to focus on our core product, customer tools, benefits and business attributes that makes Movideo such a wonderful product for our media customers. Microsoft will take care of all the heavy lifting underneath the platform. We don’t have to worry about infrastructure and we don’t have to worry about scalability. We don’t have to worry about redundancy and we don’t have to worry about the robustness of that cloud solution that underpins the Movideo offering. This is now all covered, thanks to the Microsoft partnership.Q.Why did you select Windows Azure?CMThe reason we chose Windows Azure is because it’s more than just infrastructure as a service. It is a platform with a service. This means we aren’t just rolling out an operating system to a cloud environment. Windows Azure offers us a platform, a set of tools and a technology we can build upon. We get best of technology through Microsoft, while lowering our development cost. Through this partnership, we have aligned our business with Microsoft’s roadmap, allowing our systems to evolve in each enhancement that Microsoft makes to Windows Azure. With other cloud providers you are often stuck with their infrastructure and it’s your job to build everything you need on top of it. Windows Azure allows us the freedom to focus on our unique selling proposition and our product development, while the back-end infrastructure is being developed and enhanced through the Microsoft alliance.Q.What are some of the other technologies that you looked at?CMWe looked at a number of vendors and it didn’t come down necessarily to size, environment and scalability. For Movideo, the level of engagement from the partner was also very important to us. Microsoft ticked this box by providing us with access to its technical teams. Microsoft has an ever growing community supporting the Windows Azure platform. So we know finding the right partner wouldn’t be an issue. Microsoft was very open in sharing their vision for the cloud, making, Windows Azure a natural fit to move our business forward and to drive business growth across Asia.Q.What challenges were you facing from a technical perspective?CMPerformance and cost are key factors for Movideo in the technical space in addition to how far and fast we move as a video platform offering. We have a limited development team, so we need to move quickly to roll out new features for our customers to keep them ahead of the game. This was another factor why we moved our business to Windows Azure so we could focus on those big features for our customers, rather than on the ‘plumbing’. The real challenge now is how much performance we can get out of the platform, how fast can we develop features rather than being stuck developing the infrastructure to cope with our business vision. It’s always a battle with where you spend your development on. Do I spend it on trying to improve performance in a platform to lower our cost on our base? Or do we spend time adding more features to improve customer satisfaction through innovation? The partnership with Microsoft takes care of all the back-end lifting which underpins the Movideo offering, allowing us to get on with our role of delivering great content and building innovative solutions to our customers.Q.Can you explain Movideo’s decision and approach on moving away from an open source platform?CMWe have seen the Windows Azure vision, where Microsoft wants to make Java what we call a ‘first class citizen’. For every API that they have for a .NET project, one exists for Java as well. We are helping Microsoft with processes such as findings bugs and presenting them back to the community of developers to fix. Microsoft has been very open and from our perspective embracing, the open source community. We come from a Java/Linux background and use a typical Java stack inside our IT environment. It was a big step for us to migrate to a Microsoft technology. Through working closely with Microsoft’s China Cloud Innovation Center, Microsoft Hong Kong office and the Microsoft Redmond product engineering teams, we were able to make it a smooth transition.Q.Was there a pilot or testing period?CMOur platform is in a Java environment which is typical for a lot of SaaS companies. With Java not being native to us, it could easily have been seen as a big hurdle. We believe we are going to be one of the largest Java deployments in Microsoft, if not the largest inside Azure, which presented its own unique challenges through the testing and pilot period. Essentially, what we are doing is picking our platform up and putting it on the Azure platform as an infrastructure solution. There was a tremendous amount of technical auditing done from both sides on the liability around that. Our development team spent a lot of time with Microsoft in workshops in Sydney, Melbourne and Redmond. We are extremely confident that this is achievable and that’s why we made the commitment to migrate and signed the partnership. We are now doing the heavy lifting of porting our platform to Windows Azure. This will take a couple months, however it is milestone driven and everything to-date is on track. The migration is expected to be completed in May.Q.Did you quantify any of the expected benefits down the track specific from perhaps cost savings and scalability perspective?CMYes, a big win for Movideo is in the database area with Windows Azure. The Windows Azure platform gives us scalability without us having to roll out our own infrastructure, making it hard to identify the direct monetary benefit of the platform. There are the development costs we save for not having to manage the database infrastructure which Microsoft is basically taking ownership of, which is fantastic. Q.How big is the video market opportunity for Movideo in Asia? TMAccording to our own internal research and research by Accustream’s January 2012 ‘Video Value Chain’ report, the video online markets is expected to grow from US$4.4B in 2011 to over US$10B by the end of 2014. Video platforms and content delivery is forecast by Accustream to command around a 50 per cent share of this value chain. So obviously it is growing exponentially and we are excited about that. Q.How is Movideo planning to take advantage of the Asian market opportunity? TMWe are thrilled about the growth prospects as we are very committed to the region. Devices are developing, changing and innovating very rapidly. Content libraries and regulations around those libraries are moving to online distribution very quickly. Monetisation models are also evolving rapidly in this space. All of this is being driven by faster and cheaper broadband around the world with the developing markets catching up very quickly. The mobile platform for creating and sharing content is fast becoming the new internet infrastructure for the world thanks to the emergence of 3G and 4G devices. We believe when some of the developing markets, like Indonesia, Thailand, Vietnam, Malaysia, start to put more robust solutions and broader content offerings out there will take off. With the size of their populations, even though their broadband penetration is somewhat less than a mature market like Australia, Singapore, South Korea or Japan the sheer numbers involved are phenomenal. For example, Indonesia has a population of 240 million people. A 15 per cent broadband penetration equates to 34 million people. From our perspective Indonesia is a big internet market. When you add to that the enormous growth that is happening on the mobile 3G and 4G networks the numbers start to become far more impressive. One of the key drivers is mobile penetration. One thing that helps is that Asia has a very different mobile profile than the rest of the world in regards to which handsets are dominating the space. Q.Can you elaborate what the partnership with Microsoft means from a marketing perspective?TMMicrosoft has many touch points in the market, with a large sales and marketing ecosystem. They also have a large partnership ecosystem with organisations, software companies, vendors and partners positioned all around the world that sell and service Microsoft products. We are excited about working with such a large and experienced network with access to so many enterprise customers around the globe committed to sharing the journey of our partnership. The global alliance incorporates a long-term pricing agreement, technical support, sales and marketing backing.Q.What is your strategy to win new business? Can you talk to that?TMMovideo is very much a consultative cell. We find increasingly we are providing advice to our prospective customers on how to develop their business plans for monetising video online. Generally, there are three monetisation models in media and entertainment. The first is advertiser funded video, however there is a lot of sophistication developing on that front. The second is transactional video on demand, where you pay a fee to watch a movie or a drama series on your tablet or smartphone with the download expiring for 24 hours, much the same was as you would rent a movie DVD from the store. There will be great growth in movie rentals based on transaction, or Transactional Video on Demand (TVOD) which is developing across the region. Finally you will see Subscription Video On Demand (SVOD), develop in the region. This is where you pay a monthly fee either on your credit card or to your telecommunication provider. For people at home, there will be a smorgasbord of content available on multiple devices for you to enjoy and consume online on a device of your choosing. We are continually developing these three business models and we are playing a consultative role in helping our customers build their business plans, convince their boards and access development funds. In developing markets such as Greater China the legal implications around media streaming is still in its infancy. The supply and demand are both there, but there is no legal, thus no advertising platform to monetise this opportunity. We are about to initiate, in partnership with Microsoft a series of knowledge leadership workshops across the region where we visit markets like Malaysia and Philippines to run workshops with the leaders in the industry to share knowledge with media companies in those markets. Q.Is Movideo only focussing on Asia? Or are you planning to target some of the larger markets, like EMEA and the US? TMSome of our competitors, which have grown in the US, try to tackle a large global footprint, which we feel stretches their service. We are absolutely a global product and are interested in the global marketplace, but we will not stretch our services until we have the depth of resources we want in place to enable us to service the Greater China and Asia market to the highest standard. In the second half of 2012 we will be launching a light package of Movideo that is available to buy on the web. This will be a self-service model allowing small publishers and businesses to access our platform for limited use, in a very cost effective way. If they discover that their publishing needs grow, then obviously they will engage us on a professional or enterprise usage model. We feel that in order to succeed globally we must dominate in our chosen sector which is the Asia Pacific region.There is this constant evolution in the online digital video space. To be technically partnered and aligned with Microsoft who has tremendous resources, knowledge and skills in this space, and Movideo who plays at the cutting edge of future proofing publishers, who wants to distribute media, specifically video and audio on the web, gives us a real competitive advantage and is an incidental benefit of this alliance. ................
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