By: Steve Vonder Haar
The economics of business streaming are changing right before our eyes.
Not so long ago, companies that wanted to deploy streaming technology platforms for their own use had few options to consider when investing in these solutions. In most cases, these organizations would write a big check up-front – sometimes paying hundreds of thousands of dollars in a single shot – to deploy comprehensive streaming solutions on their corporate network.
Now, thanks to shifts in the way streaming platforms are sold and deployed, implementing these capabilities no longer boils down to this type of “all-or-nothing” fiscal decision.
Streaming technology increasingly today is being presented and packaged as the equivalent of a business utility that does not require major capital investment. Instead, a fresh set of licensing arrangements are gaining popularity, making it easier than ever before for organizations to implement streaming technologies on a pay-as-you-go basis.
The emergence of cloud-based hosted streaming solutions spurred this pricing transformation initially. By tapping into software-as-a-service, companies agree to pay monthly fees in order to use cloud applications. This technology approach is well-suited to a monthly billing cycle.
The monthly payment approach popularized by the hosted services providers has upped the ante for vendors that historically have charged a single up-front fee to companies licensing their on-premise solution. As monthly billing morphed into a competitive advantage for the sellers of hosted solutions, more vendors of traditional on-premise platforms have begun offering “managed services” options in which they absorb the up-front cost of deploying on-premise streaming hardware solutions and then offset these costs by charging customers monthly fees for a predefined contract period.
The technology is still implemented as a typical behind-the-firewall IT solution, but companies pay for it the same way they would pay for electric service or the traditional telephone bill. In short, streaming becomes just another utility.
The increasing flexibility that enables companies to eschew upfront licenses in exchange for monthly program fees allows executives to look at streaming through a new set of eyes: Online video is transformed into a budget line-item that can be compared and valued based on the day-to-day benefits it delivers to an organization.
This paves the way for companies to buy streaming capabilities in a manner that’s more in-tune with the way they actually adopt the technology. After all, one long-held truism of the corporate streaming market is that exposure to webcasting leads to broader adoption of the technology platforms that make streaming possible. The more executives use streaming, the more applications they will dream up to leverage the technology even more frequently.
The monthly pricing model enables companies to experiment with streaming in a low-risk way, enabling executives to walk gingerly into streaming slowly before fully committing themselves to its implementation. Streaming evangelists within an organization no longer have to bet their jobs in order to win corporate adoption of online video platforms.
The downside, of course, is that technology purchase decision makers have yet another matrix of variables to consider when evaluating streaming platforms. Beyond simply figuring out which technology best suits their needs, executives now must contemplate which pricing model fits their budget most effectively.
In my view, that’s a small price to pay to enable executives to look at streaming in the enterprise in a whole new way. Better economics foster better solutions.
Steve Vonder Haar is a senior analyst with Wainhouse Research, covering the enterprise streaming and webcasting markets. He can be reached at email@example.com.