In recent years, the Over-The-Top (OTT) services industry has undergone a radical transformation. With the advancement of technology, the traditional hardware-based model is being replaced by cloud-based solutions, known as cloud-first.
This shift not only responds to the need to improve operational efficiency, but also to a growing demand for faster, more personalized and accessible user experiences. In this article, we will explore how OTTs can transition to a cloud-first model, why it is crucial to do so, and the steps they must take to remain competitive in an increasingly digitized marketplace.
The term cloud-first refers to a strategy in which companies prioritize the use of cloud-based solutions for their operations, rather than relying on physical infrastructure such as local servers or datacenters. For OTT platforms, this means migrating from dedicated servers to flexible and scalable solutions that are hosted in the cloud.
The transition to the cloud-first model offers a number of important advantages for OTTs:
OTTs that want to stay competitive must understand the trends that are driving the transition to the cloud-first model. Here are some of the most relevant ones.
Sales of physical consoles and devices are declining, as evidenced by Microsoft' s decision to discontinue sales of its Xbox Series X consoles in Brazil, prioritizing its Xbox Cloud Gaming service. OTTs are adopting similar models, offering cloud content to lower the barrier of entry for users without high-performance devices.
Cloud gaming and live event streaming are driving the growth of the OTT market. With the rise of platforms such as Netflix, Disney+, and specialized sports services such as DAZN, the infrastructure supporting these services must be able to handle traffic spikes without compromising quality of service. According to Grand View Research, the global OTT market reached $239.3 billion in 2023 and is projected to grow at a compound annual rate of 19.8% through 2030[1].
Content personalization is a priority for OTTs. The cloud facilitates the implementation of artificial intelligence (AI), which can analyze large volumes of user data to provide personalized recommendations, enhancing the user experience. In addition, process automation in the cloud optimizes content production and distribution.
While the cloud-first model offers numerous advantages, the transition is not without its challenges. Here are the most important ones.
Broadcasting live events, such as sports matches or concerts, can generate a sudden increase in traffic, which puts a strain on the network infrastructure. The cloud infrastructure must be able to handle these traffic spikes without causing disruptions. To this end, it is crucial to implement technologies such as SD-WAN (Software-Defined Wide Area Network) and CDN (Content Delivery Networks), which allow content to be distributed efficiently and minimize latency by resolving elasticity issues in the network and in the infrastructure that supports the content.
To deliver a high-quality user experience, OTTs must keep latencies to a minimum. In the case of cloud gamming, for example, the ideal latency should be less than 20-30 ms according to recent studies by NVIDIA[3], to avoid interruptions in the gaming experience. Achieving these latencies requires not only optimized cloud infrastructure, but also high-speed transmission networks.
Telecom operators such as InterNexa offer low latency connections averaging less than 15ms within their backbone network in Latin America, allowing OTTs to guarantee smooth experiences even in time-sensitive applications such as gaming and interactive streaming[4]. According to Akamai, every additional second of latency can result in a 7% decrease in user retention on streaming platforms[5].
OTTs must ensure that user data is protected throughout the transmission and storage process. The use of encryption and SDN (Software-Defined Networking) solutions, which segment and secure data traffic, is essential to maintain privacy and comply with data protection regulations, such as GDPR in Europe or LGPD in Brazil.
While migration to the cloud is an internal process for OTT platforms, the success of this transition depends largely on having strategic partners in the field of network connectivity and infrastructure. These allies provide the backbone necessary for cloud-first solutions to function optimally.
OTT platforms need not only cloud providers, but also a network infrastructure tailored to the specific needs of streaming and digital entertainment. Companies such as InterNexa in Latin America have developed specific solutions for the sector, including:
According to a Telegeography study, OTT platforms that implement direct connections to the cloud through specialized providers experience a 40% reduction in service interruptions during high-demand events[6].
For OTTs with international audiences, the geographic distribution of their infrastructure is crucial. Providers with regional presence such as InterNexa, which has more than 32,000 km of optical fiber across Colombia and Peru, enable OTT platforms to:
This distributed infrastructure is particularly valuable for growth markets such as Latin America, where according to Akamai, OTT content consumption will grow by 71% between 2022 and 2024[5].
Here are some key steps to help your OTT platform effectively transition to a cloud-first model.
Before making any changes, it is critical to evaluate your current infrastructure. What type of hardware and servers do you use? How scalable is your infrastructure? A thorough assessment will help identify areas that need to be optimized to adapt to the cloud.
It is crucial to select a cloud infrastructure provider that suits the specific needs of your platform. Leading providers include Amazon Web Services (AWS), Google Cloud Platform (GCP) and Microsoft Azure. These providers offer robust OTT solutions, with specific tools for video streaming and cloud gaming.
The cloud allows you to scale resources efficiently. However, it is necessary to have specific solutions to ensure low latency. Technologies such as Network Slicing in 5G and SD-WAN are key to ensure that traffic peaks are effectively managed.
The implementation of technologies such as edge computing also plays a key role in reducing latency for OTT services. By processing data closer to the end user, response times can be significantly reduced. Infrastructure providers such as InterNexa have deployed edge nodes at strategic points in Latin America, allowing OTTs to bring their content closer to users and reduce end-to-end latency to less than 10ms in metropolitan areas[7].
Incorporating AI and machine learning in the cloud will enable personalization of the user experience, providing more accurate recommendations and improving customer retention. Implementing AI-based recommendation systems can increase user engagement.
To ensure that the transition does not compromise security, technologies such as end-to-end encryption and network perimeter security should be used. It is also advisable to conduct regular security audits and maintain the infrastructure according to best practices.
Claro Video, one of the leading streaming services in Latin America, gradually migrated its operations to the cloud, relying on the telecommunications infrastructure of regional providers such as InterNexa. This process allowed them to reduce operating costs by 35% and improve content loading times by 42%, according to internal company reports[8].
The Brazilian platform Globoplay faced significant challenges during soccer broadcasts, with peaks of up to 3 million simultaneous users. By implementing a cloud-first architecture with specialized regional infrastructure support, it was able to reduce service interruptions by 68% during high-demand sporting events[9].
Migrating to a cloud-first model offers not only technical and economic advantages, but also environmental benefits. According to a study by Accenture, migration to the cloud can reduce the carbon footprint of enterprises by up to 84% compared to traditional data centers[10].
Infrastructure providers such as InterNexa are implementing sustainability initiatives in their operations, with carbon neutral goals for 2030. These initiatives include energy optimization of their networks and the use of renewable energy in their data centers, enabling OTTs to reduce their environmental impact while improving their operational efficiency.
Transitioning to a cloud-first model is essential for OTT platforms to remain competitive and future-proof. While this shift may seem challenging, the advantages in terms of scalability, cost and user experience are clear. By following these steps and relying on experienced infrastructure partners like InterNexa, your OTT platform will be able to adapt to the cloud efficiently and be ready for the demands of the future of digital entertainment.
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