NAB Reflections: Avid’s Louis Hernandez Jr. on the company’s new ‘global ecosystem’

Avid’s NAB 2017 was, in many respects, a new beginning for the company: after four years of transformation, it unveiled the completed Media Central Platform, a system designed to move the company away from hardware-based technology offerings and to more-nimble software and cloud-based offerings. Avid CEO Louis Hernandez Jr. sat down with SVG to discuss the company’s recent developments, its close ties with Microsoft, and more.

So what was the big news for Avid this year at the NAB Show?

The big thing this year is the culmination of four years’ worth of work on the Media Central platform. The last piece to create a global ecosystem was to put the whole thing on the cloud. So we announced a strategic alliance with Microsoft.

We had already put some of the creative assets in the cloud, like Media Composer and Pro Tools, but now the entire platform is in the cloud. We concurrently announced that Al Jazeera will be the first global newsroom to run their entire operations in the cloud using that platform.

The big thing is this strategy was to solve the industry’s biggest problems, and all the major building blocks are now complete. There are 2,000 global deployments of the platform, so there’s a lot of momentum right now.

It looks like the Nexis storage platform has been through big changes.

Yes, the last big piece was Nexis, which is software-defined storage. It can run on the cloud; it can run on any hardware. And the big thing here is, there was an IP upgrade that doubled the capacity of a user’s storage without the user doing anything. These things start to demonstrate why this approach to solving the biggest issues is so successful and so viable.

For any organisation to consider moving completely into cloud-based operations, there is a certain unease. How do you make people feel totally comfortable with going all-in on the cloud?

The reason we selected Microsoft as our preferred provider was, number one, they are the largest public-cloud provider in the world. But another of the reasons is, they have navigated restrictions like in China, where they have no restrictions. I think they’ve navigated that much better than, obviously, Google, who is another great company but we all know they’re restricted there, and AWS [Amazon Web Services] has some restrictions there. So, for the Chinese vendors, it’s really Microsoft.

FR A Ken LouisTwo, they’ve done that migration themselves from an enterprise organisation to a cloud-based organisation, and they’ve been in media and entertainment for a long time. Many of their largest customers are enterprise customers, not direct-to-consumer. When we’re dealing with large, complex, sophisticated organisations like BT Sports BeIN Sport, it doesn’t matter how much they might love the idea of the savings and simplicity and flexibility of the cloud. Doing it overnight can be a very complex endeavor, and that’s before you’re even talking about security, packet sizes, costs, all the other things.

The fact that Microsoft does everything from on-premises to public cloud, and every form of hybrid in between, we thought was a more realistic set of options for our clients, because I’m not speaking to one client right now who is planning on going to a public cloud anytime soon. Azure can take your current enterprise agreement, extend it to include Azure so that you can take advantage of the technology of cloud-based technologies and run it on-premises or in a private cloud. You just layer on our platform.

By doing that, you’ve saved money and taken advantage of better technology, but you haven’t exposed anything to the public cloud yet. And the nice thing is, when you’re ready to do that, you can just start flipping pieces to the public cloud when you’re comfortable. The tension greatly eases when [companies] understand they can move there at their own pace.

Some companies talk about moving to the cloud as a revolution, not evolution, and that just freaks our large clients out, because the undertaking is so significant. You have to combine purchasing departments, you have to combine asset categories, you have to get to a common coterminous agreement. Then you have to retrain everybody; you have to figure out how to integrate all the pieces. It can become a massive, anxiety-filled thought process. And that is one of the reasons we thought Microsoft would be the preferred provider.

How does everything come together from a user perspective?

All the applications are in the cloud, including storage and archive. You enter through any operating system or device channel and start accessing the creative tools. You interact with other people in the cloud through our artist community, where I can meet you and invite you to a session.

You’re in China, I’m here; we’re working on a session using award-winning creative tools. We can post our finished assets, and, if we happen to be in the studio space, you can use augmented reality, on-air graphics, etc. If you happen to be in the production area, you turn on those apps, and, while those are happening, all the media services, social-media management, distribution management, sports enhancements, media-asset management are available to you.

And if you don’t like our products, you go outside to the marketplace, and we have 2,000 certified products that you can replace any of these or add additional. All this can be signed to one contract with us. You can do it on-premises, private cloud or public. You tell us who you want to work with and how you want to work with them. As long they’re certified, we’ll guarantee the whole thing works.

One of the keys to getting that comfort level is not making them have to jump onto the public cloud?

Exactly. You’re gonna see, like Al Jazeera, some pretty huge announcements with Avid and major clients moving to the cloud. And not one of those announcements will have contemplated a public cloud.

Security is the biggest concern, right? That’s huge at this point.

Yeah, and Al Jazeera cares about security for a different reason than Disney, who doesn’t want you to see what they’re working on with Star Wars. Our clients just want to create the best content because there’s so much more competition. When they find a winner, they want to protect and optimise the value of that content and do it for less money because the economics are changing so dramatically.

So some clients are going all-in like Al Jazeera, like Sinclair, and they’re buying in because they can save money. The enterprise pricing just drives down cost.

Where does sport content fit in?

We know sports content is growing pretty rapidly in every dimension, and the economics, who gets paid and how you get paid, are changing quickly. Where we’re really focused on sports right now is a flexible deployment model where they can move in and out of digital apps or broadcast apps or social media and have a choice of how they deploy it.

What do you see as the role of a hybrid environment where there is on-premises storage and also private-cloud–based storage? Do you see that model being around for a while?

Yes, although public cloud is being adopted in large numbers by individual artists and small teams. Our cloud-based subscriptions are up 240% in our last reported quarter; they’re booming. We have small teams and individuals that are buying public cloud in a big way because they save money and they’re not as concerned about all the other stuff. Large media enterprises are buying the platform still operating as mostly hybrid cloud, just to be clear on that.

That’s why we had to build Nexis and move to a software-defined storage stack that could run on any hardware. We’ve certified hardware vendors if you want to run it on-premises. But, if you want to move to a private cloud or a public cloud, you just take that software stack with you.

In the old model, the customer would buy hardware and install it to add storage. With the software update, we just doubled capacity via software. You keep that same piece of hardware, download the latest release, and [boost] your capacity.

If you want to run it on your own on-premises and you need hardware, we’ve bundled in the cheapest hardware vendor we can find. It’s not our hardware.

If you move over to the public cloud, that software just sits on the public cloud. If you’re running on Azure, you shut down the hardware, the IP stays with you, it now runs on the Azure cloud. It’s still there; you still get all the benefits of what we do. What we do is, we compress, we increase density about 300%, we increase capacity about 600% versus the same storage space. That’s what we do; that’s what our software does.

Your development team is no longer concerned with developing hardware and software, right?

Correct. We started this four years ago, and now we just want everybody to use it and make it better. We spent about $300 million to build the platform, and we also have 65% of our employees who are new to the company and totally revamp our knowledge base.

We got rid of all the individual silos, got rid of all the hardware, brought in a different kind of employee with a different knowledge set. It wasn’t a minor change: 40% of our people around the world are in different locations than they were four years ago. And 70% of our locations are different; we shut down a bunch of offices and opened a bunch of offices. We just needed to redo everything just like our clients are having to redo everything. And now that it’s stable and it’s working, people are buying and growing. Nexis grew 50% last reported quarter. I mean this thing’s been taking off like crazy because it’s exactly what people need.

How does the Nexis software double capacity?

It’s a bunch of math algorithms for compression and security, and it randomly separates the file. It digitally impregnates each component, watermarks it, and, by randomly separating the file — think of Tetris —combines it in a way that optimizes the yield on a storage space. And because we know how the files are created, because we start with our creative tools, the way that we compress it mathematically optimises and squeezes as much into that storage space as possible. That’s why your density increases about 300% for the same block of storage and your capacity increases about 600%.

Your goal with Nexis is to have it become not just about new features but, in an ideal world, deliver more efficiency for your customers.

Yep. We’re guided by the business problem that the industry needs to create the best content, make it available to most people, optimise the value, and do it as cheaply as possible. We know storage needs are going crazy. So how do we make that cheap?

You mentioned that Microsoft’s the preferred vendor. Does preferred mean the only vendor?

The only preferred vendor. But we’re an open system so you can certify any platform. But, with Microsoft, we have a deep relationship as we’re both investing millions and millions of dollars to embed their tools and things like analytics. You think about what’s possible down the road, where you have the free version maybe embedded in some of their operating-system devices.

But the main thing now is, our clients are ready to start their journey on the cloud, and we needed the best partner to help them do that. For the reasons I cited, we felt they were the best.

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