Video cloud becomes a key market segment

Video cloud becomes a key market segment

Canalys has turned its cloud analysis service to focus on China’s video cloud market, analyzing the emerging trend of video-related IaaS and PaaS, which are hosted on either dedicated private infrastructure or shared public infrastructure.


Cloud continues to become more popular, and cloud-based video services are playing an important role in the overall market. Video services have been gaining popularity among consumers, further amplified by the changing lifestyles brought on by the pandemic. More and more activities are making use of video services, including online meetings, livestream concerts and live shopping. The metaverse, a new immersive concept with endless possibilities, will drive further demand for video in the cloud. For video platforms and applications to deliver more intelligent and scalable services with lower latency, specific offerings provided by video cloud services will become increasingly necessary.

Despite gaining attention, the definition of video cloud is less clear as it is a relatively new concept. This blog discusses Canalys’ definition of video cloud, including its advantages and innovative features.

What is video cloud?

Video cloud services consist of purpose-built software, solutions and applications designed to create, transform and deliver digital content quickly and easily. Technically, video cloud is a collection of video-related services that run on cloud infrastructure and can broadly be categorized into video-related IaaS and video-related PaaS, hosted on either dedicated private infrastructure or shared public infrastructure.

  • Video-related IaaS provides the necessary infrastructure capacity for video. While IaaS is a general service that can be applied to many use cases, video-related IaaS is optimized to run video applications in daily operations. The configuration of computing, storage and network infrastructure will vary depending on the type of video application. For example, video conversion and rendering require computation power, video uploading consumes storage space, streaming video content requires network bandwidth and live video streaming requires high service quality and low latency.
  • Video-related PaaS (or VPaaS) refers to platforms that enable third-party ISVs to develop video-based applications, such as online video, short-form video and real-time communication. Unlike video-related IaaS, which is more general, VPaaS is a set of solutions or technologies applied specifically for video services only. It could be a set of solutions providing APIs or SDKs, or a specific technology that lets existing software run smoother. The goal is to provide development platforms and technologies for customers to create and customize their own proprietary video solutions. For example, an enterprise customer buys a live-streaming SDK from a cloud vendor and integrates it into its own self-developed software applications to produce a video-related capability.

The advantages of dedicated video cloud offerings

The adoption of cloud technology for video-based services has brought about the rise of video cloud as a standalone concept. Due to the infrastructure costs associated with running and developing the technology, customers lean on cloud vendors to provide these video cloud services. Video data is typically stored as “unstructured data”, making high demands on infrastructure storage and computation due to the need for format processing. But the key to success for any video provider is the end-user experience. Providers that can offer low latency are more likely to deliver seamless user experiences.

Most cloud vendors have offerings that enable them to compete in the video cloud market. In addition to their infrastructure capacity, cloud vendors can offer services that come pre-integrated with their cloud stacks. Well-known hyperscalers, such as Alibaba Cloud, Tencent Cloud and Huawei Cloud, dominate mindshare in China’s video cloud market. But other challengers, such as Volcano Engine, have also emerged. Volcano Engine is a subsidiary of ByteDance, which also owns TikTok. Though still a new player in China’s cloud market, Volcano Engine has massive potential to gain share in this segment.

User scenarios for video cloud

Video cloud customers come from many industries, and there are a wide range of vertical applications and use cases. Estimates from Canalys show that the greatest video cloud adoption in the Chinese market is in entertainment, ecommerce and education. The most common SDK applications are video-on-demand, live streaming and real-time communication.

In the entertainment industry, customer needs are focused on video-on-demand content, such as movies and music. Ecommerce companies are turning to live streaming as part of their online marketing efforts. Education providers need online conferencing solutions to enable remote classes and interaction. Outside these major sectors, sport is emerging as a key segment for live streaming and high-definition services. But cloud vendors are looking to extend video cloud technology solutions to more industries, such as industrial and manufacturing. New specialized solutions, such as remote monitoring, are being widely used for “smart mining” and “smart ports”, greatly reducing labor costs. The rise of the metaverse has also accelerated video cloud growth, where use cases such as “digital twins” are increasingly being commercialized.

Canalys will provide more insights into China’s video cloud market, making it a key focal point of its research agenda. Through an ongoing service, it will guide technology companies to make the right decisions on their solutions’ features and choose the right partners in the Chinese market. Do contact us to discuss the market opportunities and outlook.