Recent IDC case study features IBM SoftLayer German customer pixx.io and explains how pixx.io (a solution provider for the media industry) has leveraged IBM Cloud to create a hybrid media sharing service. Pixx.io talked to a number of suppliers including Amazon Web Services (AWS), Hosteurope and Rackspace, before it met an IBM SoftLayer representative at an exhibition.  Back then, IBM Softlayer was in the process of opening up its datacentre facility in Frankfurt – which was going to be operational in December 2014.  After a comparison of capabilities versus the other providers it was the data location aspect - combined with the strong customer engagement from the start - that played a deciding role in the initial supplier selection." [...] Interestingly, IBM Softlayer was not the cheapest of the options that pixx.io had evaluated, but when comparing the overall value of the solution, including especially the support in setting up the services, the offering presented definitely the best value for money, according to pixx.io."

1. May 2015, IDC #CL54X
BUYER CASE STUDY
How pixx.io Leveraged IBM SoftLayer to Create a Hybrid
Media Sharing Service
Giorgio Nebuloni
IDC OPINION
As public cloud services become widely adopted in Europe, hybrid approaches linking private and
public cloud environments with data and policies are becoming a serious option not only for
internal IT organizations but also for independent software vendors (ISVs) or solution providers
active in specific verticals.
pixx.io is a German web software development house. Founded in early 2014, pixx.io provides a
professional media management software that allows professional groups or companies to share
media files via the cloud safely while maintaining full retention of the original content. This is
achieved with the combination of a standalone media server (the pixx.io box) storing and
compressing the media data on the customers' premises and a multitier cloud application off-
premises.
 pixx.io had two challenges. First, it must avoid fixed costs as in a start-up mode. Second,
the cloud copies of the data had to remain in Germany for compliance reasons in order to
avoid precluding potential expansion in regulated verticals down the road.
 In December 2014, after a comparison with other providers, pixx.io decided to engage with
IBM SoftLayer to use infrastructure-as-a-service (IaaS) capacity running in the provider's
datacenter in Frankfurt. After the first tests, pixx.io launched the public beta of its service at
the beginning of 2015, making it widely available in April 2015.
 There were no major challenges with the platform in its first months of operation. Along
with the pre-emptive cost savings on capex for a fully owned infrastructure, scalability is
the other advantage of public IaaS usage, as pixx.io is on a path of expanding its
subscription on cloud capacity while its own customer base and offerings grow.
 IBM SoftLayer was not the cheapest among the options evaluated, but compared with the
overall value of the solution (including the extensive support in setting up the services), it
presented the best value for money.
 IDC maintains that cases such as pixx.io's prove that real hybrid cloud implementations
can solve business problems and do not have to be massive ordeals. Not all hybrid setups
require low-latency networks or complex software stacks. Some applications can be purely
based on over-the-top transmissions of smaller data packets, and yet they can have a
strong impact and value for employee productivity.

2. ©2015 IDC #CL54X 2
IN THIS BUYER CASE STUDY
This IDC Buyer Case Study analyzes the implementation of a cloud media repository application
on IBM SoftLayer by media solution provider pixx.io. It briefly describes pixx.io's main areas of
activity and focuses on the key factors driving the implementation, including their impact on the
company's business. A summary of findings and lessons learned is also included.
SITUATION OVERVIEW
Public cloud platforms of the platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS)
type extend their feature sets and geographical presence in Europe, with IDC estimating that more
than $4.2 billion will be spent on such services in Western Europe in 2015 (+32% YoY).
Innovative companies in Europe have started to develop or purchase software solutions that
combine public cloud compute and storage resources with IT resources and data stored on the end
users' premises. The idea is to make the most of the advantages of public cloud resources in terms
of scalability, on-demand costs, and features while continuing to support:
 Legacy applications running on-premises that cannot be moved to cloud
 Data retention on-premises for regulated workloads (e.g., government, healthcare,
banking)
This linkage of public cloud and private or private hosted cloud systems can happen in various
forms, and it is often referred to as a hybrid cloud. For more information, see Ready, Go! How
Organizations in Europe Are Performing in the Hybrid Cloud Steeplechase (IDC #CL52X, February
2015).
While it is now broadly accepted in the industry that the hybrid approach is a serious option for
internal IT organizations (e.g., a financial institution creating a public cloud-based mobile app and
linking it to its core back-end banking systems), IDC has noted a trend of ISVs or solution providers
that have explored the approach in specific verticals in the attempt of delivering business solutions
to third-party customers.
This is happening in the media and healthcare sectors, and it is prevalent in countries in
Continental Europe that have higher demands for data governance. As analyzed in the following
section, pixx.io is one of these solution provider companies.
Organization Overview
pixx.io is a web software development house based in Mühldorf am Inn in Munich, Germany.
Founded in early 2014, the start-up company launched a successful crowdfunding campaign on
Indiegogo. The goal was to provide a professional media management software that could
combine:
 The ability to share media files online via cloud, similar to how social networks such as
Facebook and others work
 A strong data retention element on-premises, whereby the content producers maintain all
of the original content in large format within their internal company networks
 Content management features allowing employees on-premises to search and download
files on demand in a desired file format

3. ©2015 IDC #CL54X 3
This second point was a key differentiation element, especially in Germany and some of the more
conservative end-user segments such as industrial manufacturing. From the start, pixx.io's main
customer targets have included small and midsize creative or marketing agencies, engineering
teams in "Mittelstand" (midmarket) companies with more than 1,000 employees, and single
departments such as marketing and research and development in larger organizations.
To achieve this goal, the pixx.io team had to develop the solution in two different pieces:
 A software engine, the pixx.io server, which enables content management,
search/indexing, and compression. The pixx.io server sits on the customers' premises and
can be purchased in two ways: bundled with a standalone media server machine produced
by the vendor (the pixx.io box); and as a standalone software license that can be installed
as a virtual appliance on any regular x86 machine owned by the customer.
 A multitier cloud application including online repository of the low-resolution media files,
contacts database, and web interface for browsing content online.
In practical terms, if a marketing agency wants to show a draft of a billboard to a third-party
customer, all it needs to do is save the high-resolution files on the pixx.io box running in its offices.
The files get compressed and in some cases converted into low-resolution JPEG or BMP formats,
encrypted, and sent via Internet to the pixx.io cloud, where they are meant to reside temporarily.
The files can then be shared with customers via URL links. Options to watermark the online files or
change media formats are available.
The compression aspect of the software is crucial, according to pixx.io, since even in a country
with fast Internet connection, like Germany, bandwidth outside the large cities can get fairly tight,
and in rural areas it is still not uncommon to have upload speeds below 1Mbps.
pixx.io allows customers to purchase its software and services in two modes:
 Purchase the pixx.io box (including hardware and software bundled) for a one-time fee,
then pay smaller monthly fees for the software updates on the media server and for the
cloud subscription
 Subscribe to both the software and cloud offering in an as-a-service mode, with a minimum
contract of 12 months and monthly payments
Interestingly, pixx.io mentioned that some of the most traditional companies preferred the first
approach as they still associate the ownership of the hardware appliance with the ownership of the
data sitting on it. IDC believes this will change over the next few years as consumers and
businesses get used to the idea of consuming on demand.
Challenges and Solution
In September 2014, as the funding round was about to be completed, pixx.io started preparing for
the beta version of its platform. Although the internal development of the pixx.io box appliance was
mostly self-defined, the team faced two major challenges on the back-end side:
 The costs of renting fixed capacity at a colocation provider, let alone building a datacenter
facility itself, were too high for a start-up.
 Based on early customer discussions, it was clear that even the cloud copies of the data
had to remain in Germany, mostly for "psychological" reasons, and to avoid precluding
potential expansion in regulated verticals down the road.

4. ©2015 IDC #CL54X 4
At that point, pixx.io set out to search for a cloud provider that could allow flexibility in scaling and
offer correct data location. It talked to a number of suppliers including Amazon Web Services
(AWS), Host Europe, and Rackspace before meeting an IBM SoftLayer representative at an
exhibition. Back then IBM SoftLayer was in the process of opening its datacenter facility in
Frankfurt, which was going to be operational in December 2014. After a comparison of capabilities
with other providers, it was the data location aspect, combined with the strong customer
engagement from the start, that played a deciding role in the initial supplier selection.
As the next step, pixx.io's technical staff attended a hands-on workshop at the IBM campus in
Ehningen, where the first virtual server instances were remotely installed and the beta version of
the cloud platform was set up in IBM SoftLayer's datacenter in Frankfurt. As for the pixx.io box,
Linux software of the Debian type was used for the Linux, Apache, MySQL, PHP (LAMP) stack,
with web front-end, database, and storage repository. pixx.io made use of IaaS resources in the
form of virtual servers combined with IBM SoftLayer's block storage offering.
Results
After the first internal tests in December 2014, pixx.io launched the public beta of its service at the
beginning of 2015, as the first batch of its pixx.io box appliances was delivered to customers that
had signed up in advance. In April 2015, the service became widely available, and the number of
virtual servers in use on the IBM SoftLayer cloud increased considerably. pixx.io is in contract with
IBM SoftLayer based on monthly billings without up-front costs.
With the exception of a short downtime due to planned upgrades in the IBM SoftLayer facility, the
platform did not encounter any major challenges in its first months according to pixx.io. The service
has been running nonstop since the initial internal deployment and is able to deliver what it
promised. A key benefit of using public cloud resources was the pre-emptive cost savings on
capex for a fully owned infrastructure, which would have made it impossible to launch such a
service. Scalability is the other advantage of public IaaS, as pixx.io is on a path of expanding its
subscription on cloud capacity while its own customer base and offerings grow.
The hybrid setup with cloud capacity off-premises, combined with a dedicated appliance on-
premises, allows it to embark on the crucial phase of expanding its customer base, assured that
the scalability and reliability of the initial platform are solid.
Interestingly, IBM SoftLayer was not the cheapest among the options evaluated, but compared
with the overall value of the solution (including the support in setting up the services), it definitely
presented the best value for money.
Future Plans
As the current service dedicated to static images and media files continues to expand, pixx.io is
looking to expand its platform to take on the difficult task of adding video and audio file sharing
support. Due to the file sizes and skyrocketing user demand, IDC believes that video already
accounts for more than 60% of Internet traffic globally, and it is poised to go even higher in the
coming years. There are many challenges in this area, including the need to enable the on-
premises pixx.io box with enough capacity for storing large video files and the higher taxation on
software and computing hardware to do transcoding (on-premises) and video reproduction (off-
premises). IDC believes that this will be a major step for pixx.io's platform as it could open new
markets in the media space. However, seeing the complexity of the challenge, IDC advises pixx.io
to spend as much time and resources as possible on the product development stage, as getting
the user experience right in the first iteration is a must to gain customer acceptance.

5. ©2015 IDC #CL54X 5
ESSENTIAL GUIDANCE
IDC believes the pixx.io launch is a typical example of how several aspects or pillars of the 3rd
Platform era end up reinforcing and actually enabling each other. It is safe to assume that investors
would have found it impossible to make a business case for a content and media management
platform such as pixx.io if public cloud, pay-as-you-use IaaS resources did not exist. Organizations
looking to use public cloud IaaS can absorb some key lessons from the pixx.io implementation by
taking the following into consideration:
 Make use of the consulting capabilities of the cloud service provider to accelerate your first
deployment. Technical staff working for the cloud service provider are likely to know the
IaaS offering better than third-party customers. Researching all the features of a provider
with a large portfolio such as IBM SoftLayer requires a considerable investment of time
and resources. pixx.io had one such challenge at the beginning. Extracting knowledge and
advice from the service provider might help you identify the correct building blocks and get
to market quickly with an application. Be sure to keep an eye open for interdependencies
of packaged services (e.g., databases, messaging) to avoid unexpected surprises.
 Do not be scared of the word "hybrid." Hybrid cloud implementations with data transfer
between different types of environments do not have to be insurmountable challenges. Not
all hybrid setups require low-latency networks or complex software stacks. Some
applications such as pixx.io's can be purely based on over-the-top transmissions of smaller
data packets, and yet they can have a strong impact and value for employee productivity.
 Execute extensive analysis of your target customer base before launching your service.
Aspects such as broadband penetration and organizational and IT maturity level of the
customer base have to be clarified in advance, both for internal customers (private cloud)
and third-party customers. In particular, several European organizations still appear unable
to cope with pure subscription or "chargeback" billing. Be prepared to offer other options.
 Make sure you do timely market research before signing up with a cloud provider. The
market for IaaS and PaaS services is still fairly young in Europe, and major suppliers enter
new geographies and launch new features or partnerships almost every month. On top of
this, players trying to break into new markets tend to be very hungry and are likely to go
the extra mile to secure the business. You can use that to your advantage for support in
the setup phase.
As a conclusion, this case study attests that viable market options for building new generation
applications across multiple environments are multiplying by the day. IDC maintains that end
customers, start-ups, and established ISVs are recognizing this opportunity, and a wave of real
deployments will soon follow.
LEARN MORE
Related Research
 Ready, Go! How Organizations in Europe Are Performing in the Hybrid Cloud
Steeplechase (IDC #CL52X, February 2015)
 IDC Predictions: European Cloud in 2015 (IDC #CL51X, February 2015)
 Transitioning to User-Centric IT: Rolling Out Google Chromebooks to Replace PCs in a
100,000-User Organization (IDC #LC01X, January 2015)
 Hybrid Cloud in Europe: From Myth to Reality? (IDC #CL54W, November 2014)

6. About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make
fact-based decisions on technology purchases and business strategy. More than 1,100 IDC
analysts provide global, regional, and local expertise on technology and industry opportunities and
trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help
our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company.
IDC Central Europe GmbH
Hanauer Landstraße 135-137
D-60314 Frankfurt am Main
+49 (0)69 90502-0
Twitter: @IDC
idc-insights-community.com
www.idc.com
Copyright Notice
This IDC research document was published as part of an IDC continuous intelligence service, providing
written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about
IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices.
Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or sales@idc.com for
information on applying the price of this document toward the purchase of an IDC service or for information on
additional copies or Web rights.
Copyright 2015 IDC. Reproduction is forbidden unless authorized. All rights reserved.