Is Amazon Planning a Cloud Encoding Service?


Amazon (s AMZN) may be looking to add a new cloud encoding service to its web services portfolio, according to sources. While creating a new cloud-based encoding service would fit neatly into its Amazon Web Services (AWS) plans, it could also potentially displace some customers who leverage its infrastructure for their own cloud encoding services.

Sources say Amazon is rumored to have purchased a number of encoders from Seattle neighbor Elemental Technologies (located in nearby Portland), and it plans to use those encoders for a new encoding service that it will add to its AWS portfolio. Elemental makes encoders that rely on parallel GPU processing, as opposed to usual CPU processing, for video transcoding.

That would mean Amazon adding additional infrastructure to support the new servers, but customers have repeatedly asked the company for a GPU cloud service, and the performance tradeoff could be worth it: Elemental claims that using the GPU for transcoding can be 5-10 times faster than using the CPU, so a single Elemental Server can do the job of seven dual quad-core CPU servers. Elemental couldn’t be reached for comment, but sources in the encoding industry confirmed that Amazon has been investigating different options for encoders.

With its Simple Storage Service (S3) and CloudFront CDN offerings, which now includes streaming, it already has two parts necessary for web video delivery. By rolling out its own encoding service, Amazon would be one step closer to having a one-stop shop for IP video delivery. Some media companies — most notably Netflix (s NFLX) — already rely on Amazon’s EC2 cloud computing for cloud-based encoding.

That said, if Amazon launches a cloud encoding service, it will be competing directly against some of its own customers, who use EC2 to power their own encoding offerings. That includes HD Cloud, Zencoder and — the last of which was a finalist in Amazon’s 2008 Start-Up Challenge.

Image courtesy (CC-BY-SA) of Flickr user akakumo.

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If this is true, buying hardware still doesn’t mean they’re building a complete encoding service. I think it’d be more likely that they add those servers as an additional option in their EC2 lineup, in which case it could be a good thing for cloud encoding services, and would make AWS the preferred cloud for them.

As is, companies could put FFmpeg on an EC2 instance and have an encoding server, yet there’s still enough demand for cloud encoding services to support multiple growing competitors. This is because there’s a lot more to (most) services than just hardware and an API.

For instance, Zencoder uses more than a dozen different open source and proprietary encoding tools, as well as custom software, to make sure it can handle just about any video an end-user might upload (including obscure and partially corrupt files). I’m sure the servers Amazon bought are great, but I doubt they can match that level of compatibility on their own.

So my guess is this could just mean better hardware options for encoding services, but we’ll see.

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