Cloud computing gets a bad rap because it can’t replace corporate data centers for mission critical apps. But new computing paradigms never do that: it is the new capabilities they enable that drive adoption. Case in point: transcoding.

Anyone who shoots video soon discovers that changing from, say, AVCHD to an editing-friendly codec and then to H.264 for distribution takes a lot of compute cycles. Conversion from one codec to another is called transcoding. It is the price we pay for high quality compressed content.

Compression and format conversion are necessary because highly compressed video – the kind most camcorders shoot – isn’t easy to edit. And the stuff that’s easy to edit has large files that chew up bandwidth and storage.

So we transcode. Add to that the number of formats we use – ranging from iPhones to flash to SD and 1080p – and transcoding is a major CPU cycle sink.

Fortunately, transcoding can be a highly parallel operation. A frame – or a series of frames – can be divided and split among multiple cores and CPUs.

Where can you find a lot of CPUs for a quick job? Right, the cloud. Which is why there are a number of online services that front-end Amazon Web Services to provide transcoding.

I spoke to the CEO of startup Zencoder, Jon Dahl to learn more.

Zencoder is a transcoding service provider that uses Amazon as a cloud provider. The Zencoder team has developed transcoding infrastructure for several startups and finally decided to build a general-purpose service.

While they use open source software in their stack – as do most transcoding providers – their major value-add is in a high-performance scalable interface. Handling 100,000 concurrent transcodes is non-trivial.

They also look out for problems common in transcoding such as audio/video getting out of sync and aspect ratio distortion. They can transcode 1080p faster than real time. And they’ve licensed the proprietary formats as well.

Amazon offers Linux as a service and a file service. S3’s files are limited to 5 GB, but that isn’t a problem for Zencoder: customers can specify input and output locations, bypassing Amazon storage.

Also they don’t transcode Mac ProRes – Final Cut Pro’s preferred editing format – today. But they do handle QuickTime movies.

The StorageMojo take
So the glass house doesn’t want to outsource cloud infrastructure. Who cares? They’re the last to adopt new technology anyway.

It is apps like transcoding that drive the business. In 5 years much, perhaps most, transcoding will be cloud-based.

Before the digital video craze in the last 5 years there wasn’t much demand for transcoding. But today, with HD video smartphones, millions are producing videos that they want to share and save.

Your smartphone won’t have the cycles to do it, but the cloud does. Expect transcoding vendors to add new features, such as noise-reduction or sharpening.

Business units are discovering the power of short videos to inform, train, persuade and excite. All at a fraction of the cost of 4-color brochures.

The outlook for storage vendors is mixed. Yes, much more storage will be sold – but cost-conscious cloud managers will be buying it. And as more new services develop on the cloud, consumers will be as hazy about “local” and “cloud” as they are about “memory” and “disk” today. Branding nightmare, but that’s where those petabytes will be.

Courteous comments welcome, of course.