Feature Q&A: Microsoft and Movideo Enter Strategic Cloud Partnership
Tony McGinn, CEO, Movideo and Cameron Moore, CTO, Movideo
Q.
What did Movideo and Microsoft announce today?
TM
Today 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?
TM
Movideo 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?
TM
Movideo 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?
TM
The 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?
CM
The 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?
CM
We 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?
CM
Performance 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?
CM
We 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?
CM
Our 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?
CM
Yes, 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?
TM
According 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?
TM
We 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?
TM
Microsoft 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?
TM
Movideo 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?
TM
Some 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.