Analyst: Market for virtualized video encoders capitalizes on IPTV, cloud growth

ABI Research reports that the continued push towards cloud computing throughout the IT industry is making its way into video markets. According to the analyst, virtualization in the encoder market is expected to grow from 34% of the market in 2014, to 44% in 2020.

ABI notes that, as service providers look to expand their service offerings, the desire for flexibility in launch and maintenance of these services grows as well. A shift in encoding formats with the upcoming HEVC focus, along with a multitude of new devices and device types to support it, is pushing the industry to embrace unified headends to satisfy these needs.

“Traditionally, video infrastructure components have been disjointed and independent from each other, making for an inflexible platform,” explains Eric Abbruzzese, Research Analyst at ABI Research. “Virtualizing video delivery components and unifying them will solve this inflexibility and make supporting newer and popular IP video services alongside traditional TV services easier.”

Those that already offer virtualized products, including Cisco, Elemental, Envivio and others, will have an early market advantage, expects the analyst. Cisco, with their V2P system, and Elemental, now part of Amazon Web Services, are leaders in the space, notes ABI.

The analyst believes that implementing virtualized and unified solutions could reduce total cost of ownership by 30% through lessened capex and opex. ABI contends that more leniencies in initial purchase or licensing limits the possibility of over or under buying required hardware, and the virtualized nature of the hardware, means that more can be added or removed quickly, depending on demands.

Easier integration of new services, such as cloud DVR, is also expected benefit those looking to expand their current offerings, finds the new report, which adds that the differing demands between broadcast video and unicast-focused video can be supported more easily with a unified and virtualized infrastructure.

“As the industry continues to move more towards things like mobile viewing, short form video and non-linear video, those who are primarily invested in broadcast and linear hardware will need to be prepared to adapt and pivot to support these new trends, and a unified headend or virtualized infrastructure solution is a promising way to do so,” concludes Sam Rosen, vice president of consumer research at ABI Research.

The new report is part of the analyst's Mobile, Multiscreen, and Cloud Video Delivery Research Service, which includes research reports, market data, insights, and competitive assessments. Read ABI’s full report, Unified Headends: Virtualizing Traditional and Multiscreen Video Services.