Samsung Takes Smart TVs Into Microsoft's Cloud

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Samsung Electronics will use Microsoft’s Windows Azure cloud-based service infrastructure to manage the delivery of apps and software to its Smart TVs worldwide, the companies announced Monday.

The CE maker sells Smart TVs and provides Internet-connected services in 120 countries — and plans to expand even further. Compared with the cost of expanding its in-house IT services, Samsung achieved a tenfold cost reduction by choosing to run that infrastructure in Microsoft’s cloud, according to the companies. Samsung also “observed greater speed of service in Asia, where it sees most of its Smart TV traffic,” they claimed.

In this context, you’re looking at a classic build-versus-buy scenario. According to Microsoft, other companies using Windows Azure include General Mills, LexisNexis, NASA and Television Broadcasts Ltd. (TVB), a Hong Kong-based TV broadcaster.

For Samsung, outsourcing cloud services — hosted at Microsoft’s data centers on Windows servers — made more sense: “Windows Azure gives Samsung the ability to focus on its business rather than having its technical team deal with problem-solving and troubleshooting issues,” said Bob Kelly, VP of Windows Azure at Microsoft.

But for others, owning the cloud is the better strategy. Netflix, for example, is shifting away from Level 3’s content delivery network services to a model where it hands off video traffic directly at Internet exchange points (see Netflix Rolls Its Own CDN).

Of course, there are risks with the cloud — any cloud, whether outsourced or internally operated. Amazon.com’s cloud-computing service, which powers part of Netflix’s service, suffered a major outage over the weekend after storms on the East Coast knocked out power to several data centers.

What about cable? In some sense, TV has always been delivered from “the cloud” (the headend), and providers like Comcast, Time Warner Cable, Cox and Cablevision have been quickly ramping up their network infrastructures to deliver video services to any device.

Not without some controversy — witness the network-neutrality uproar over Comcast’s decision to offer unlimited VOD over its IP-based cloud to Xbox consoles, whereas the likes of Netflix are still counted toward usage limits (see Comcast To Shift From Broadband Caps To Usage-Based Pricing and Once Again, Here’s What Data-Usage Caps Are For).

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Programming Note: Find out how operators and media companies are tapping into cloud-based technologies at TV’s Cloud Power, Thursday, July 19, at New York’s Roosevelt Hotel. Scheduled speakers include IBM Global Business Services’ Bob Fox; PwC’s Gordon Castle; and Maitreyi Krishnaswamy, Verizon’s director of consumer video services.

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