There are lots of discussions going on regarding the benefits of adopting cloud services by companies.
In this article, we present a case study on how a firm achieved 80% cost saving by adopting Cloud services.
The firm – Zenga Media
Zenga Media provides video streamlining services for customers through mobile platforms. The video can be accessed from any basic mobile models. They have tied up with IPL, MTV and other channels to broadcast cricket matches and TV programmes on the web and mobile channels. Their source of revenue is basically advertisement. They provide video content free to the viewers.
IT Infrastructure Challenges
Zenga media founded by Shabir Mornin had concerns on managing IT infrastructure from the beginning itself. Being in the business of providing video streamlining services, he had to consider issues like the storage allocation for video streamlining, how to deal with sudden traffic for a video content, how to provide video without any interruption etc. When they started in 2008, they ran all the services from their local datacenter. During the initial stages itself, they started facing a number of issues. The main issue was that they were not able to find adequate resources to manage the datacenter. When they launched Zenga TV as a pilot service in mid 2008 from their local datacenter, they faced the issue of network overload. This led them to adopt cloud solution provided by Rackspace.
Cloud Solution from Amazon and benefits
Later in 2009, when they got the right to streamline IPL matches they solely moved the IPL videos to the cloud solutions provided by Amazon. This move benefitted them in many ways.
- They were able to reduce the strength IT department from 35 to mere 5. On the financial side, Zenga was able to save 80% on operating cost and 50-60% on infrastructure facilities.
These benefits prompted them to move all the services to Amazon because they provided servers on an hourly basis while Rackspace provided on monthly/yearly basis, which did not suit their business model.
- Zenga also pointed out that if they had gone for capital investment for IPL, it would have been a waste because the servers can only be used for providing IPL videos and not for any other services.
- They also claimed that they gained in terms of the bandwidth cost where they were able to reduce cost 10 times lesser with a cloud model when compared to the original cost they would have incurred if they had gone for direct bandwidth purchase.
Pay as you use model helped Zenga to add servers and bandwidth on a need basis rather than going in for a captive investment.
The adoption of cloud services was undoubtedly a win-win situation for Zenga and for customers as they did not compromise on the quality and customers were able to view the contents online with better connectivity.