The dilemma of build vs. buy from CPAAS in the world of Video Conferencing solutions
Updated: Jun 14
In today's digital age, communication has become the lifeblood of businesses and individuals alike. As organizations strive to connect with their remote teams, engage with customers, and collaborate with partners worldwide, video communication has emerged as a powerful tool. When it comes to building a video communication app, there are two main options: building from scratch or integrating Communication Platform as a Service (CPaaS) video API providers. While the latter may seem like an attractive choice due to its convenience, there are several compelling reasons why building your own video communication app is a better long-term investment.
First and foremost, building a video communication app gives you full control over the user experience. By developing your own app, you have the freedom to customize every aspect of the platform to align with your brand identity and specific requirements. From the user interface to the features and functionalities, you can tailor the app to create a seamless and intuitive experience for your users. This level of control is crucial for building strong brand recognition and fostering user loyalty.
Secondly, building your own video communication app allows you to prioritize data privacy and security. With increasing concerns about data breaches and privacy issues, having control over the infrastructure and data handling processes becomes paramount. By building your own app, you can implement robust security measures, encryption protocols, and data storage practices to safeguard sensitive information. This not only protects your users but also builds trust and credibility in your brand, setting you apart from competitors who rely on third-party providers.
Moreover, building a video communication app provides scalability and flexibility. As your business grows and evolves, you have the freedom to add or modify features, scale up the infrastructure, and adapt the app to changing market demands. This agility is crucial for staying ahead in a rapidly evolving digital landscape. On the other hand, integrating a CPaaS video API provider might limit your ability to customize or scale the app according to your unique requirements, potentially hindering your growth potential.
Building your own video communication app also offers cost-effectiveness in the long run. While integrating CPaaS video API providers may seem like a quick and cost-efficient solution initially, the subscription fees and usage charges can add up significantly over time. By building your own app, you have the opportunity to make a one-time investment in development and infrastructure setup, reducing ongoing expenses in the form of API usage fees. This allows you to have better control over your budget and allocate resources more efficiently.
Last but not least, building a video communication app provides a competitive edge. In a market saturated with generic communication tools, having a unique and tailored app sets you apart from competitors. It allows you to differentiate your brand and offer a distinctive user experience that aligns with your specific value proposition. By investing in building your own app, you position yourself as an innovative and forward-thinking organization, attracting users and potential partners who value a premium communication experience.
Let's take the example of an virtual events company to understand the numbers between build vs buy strategy.
An virtual events company hosts 100 events a month with the average of 500 participants attending each of those events. Lets assume that each event is 6-8 hours long out of which 4 hours of audio/video is being used by all the participants and the virtual events company is using a video cPAAS provider to provide audio / video sharing capabilities to it's participants.
The maths for 1 event would look like as below.
4 *60 = 240 minutes *200 participants * $.004/video minute= $192 (considering 200 participants sharing their video and audio)
4 *60 = 240 minutes *300 participants * $.0009/video minute= $65 (considering 300 participants sharing their audio only)
Total $257(approx.) is what the cPAAS provider charges for 1 event.
If 100 such events happen, then the total cPAAS bill would be $25,700 for the month! If the virtual events company has been using the cPAAS services for last 2 years while hosting similar kind of events each month, total cPAAS bill would have been $616,800.
Now lets do some maths to find out what the amount would if the virtual event service provider would have decided to build it from day 1.
For building a really scalable video back-end which can replace their cPAAS offering, it should take 8-12 months with a cost of $150,000(approx.). The front-end and all other costs would stay the same.
The next important cost is the server and the data transfer cost.
Lets try to calculate the data transfer costs for 1 event with 500 people with 4 hours of audio / video usage.
1 participant consuming video and audio at 540Kb/s for 4 hours
540 * 60*60*4= 7.41Gb of data consumption for 4 hours
if 200 participants are using video, then total data consumption is 200 * 7.41 = 1483Gb
1 participant consuming audio at 40Kbps for 4 hours
40*60*60*4 = 0.54Gb of data consumption for 4 hours
if 300 participants are using audio, then total data consumption is 300 * 0.54 = 164Gb
Therefor total data transfer cost becomes 1648 Gb.
In case of AWS, the data transfer costs become = 1648* $.08/Gb = $132
In case of DigitalOcean, the data transfer costs become = 1648* $.01/Gb = $16.48
Considering that the virtual event provider is running all it's services in DigitalOcean as it is cheaper, the total data transfer cost per month for all the 100 events would be = $1648. The server cost can be considered as included in this cost as we haven't considered the free data transfer provided by DigitalOcean as a combined package with the servers.
cPAAS cost of $25,700 vs self managed infra cost of $1648, the difference becomes $24052.
According to this calculation, it seems that the virtual event company can recover the development cost of the self managed video back-end in less than 6 months and keep on saving at least $15000 a month considering people needed to manage and enhance the video back-end would cost monthly $9052.