4-page Case Study
Posted: 7/29/2010
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Sagastream Video Publisher Chooses Windows Azure over Amazon EC2 for Cost-Effective Scalability

Software company Sagastream developed an online video platform that enables customers to publish and manage interactive videos over the web. The company developed its platform for the cloud, initially choosing Amazon Elastic Cloud Compute (EC2) as its cloud service provider. Sagastream quickly realized, however, that while EC2 offered low infrastructure costs, it did so at the expense of scalability and manageability, and the company found that it spent considerable time managing scaling logic and load-balancing requirements. Sagastream decided to implement the next version of its online video platform on the Windows Azure platform. Since making the switch, the company has already benefited from quick development, improved scalability, and simplified IT management. Sagastream also reduced its costs—savings it will pass along to customers.

Sagastream is a startup company with nine employees that has developed a flexible, online video platform called Saga Player. The platform includes an easy-to-use tool set that companies, such as Volvo, can use to upload, manage, and publish interactive online videos for branding, selling, marketing, and demonstrating products, to name just a few examples.

Every aspect of the online video platform—from streaming, encoding, and service hosting—is cloud-based—that is, the platform is hosted online through data centers. “We chose a cloud-based service from our inception because of the cloud’s inherent ability to provide scalability and manageability, and because we wanted to reduce our infrastructure costs,” explains Martin Svensson, Chief Executive Officer at Sagastream. “Publishing interactive videos online takes significant amounts of storage and bandwidth, which is expensive in an on-premises model, so the cloud was the only viable option for us.”

* Windows Azure gives us the on-demand scalability that we need to process large amounts of data, no matter how quickly we grow. *

Martin Svensson
CEO, Sagastream

At first, Sagastream used Amazon Elastic Cloud Compute (EC2) as its cloud services provider, which initially helped the company to reduce some of its potential infrastructure costs. However, using Amazon EC2 still resulted in significant infrastructure management efforts, including setting up virtual servers and scaling logic for load balancing. “We expect a large number of users, so we need the utmost in on-demand scalability,” says Svensson, “and with Amazon, we did not have the ability to scale up as we needed.”

Sagastream also had to maintain its virtual servers and its hosted instances of Microsoft SQL Server 2008 data management software. “With Amazon, we had infrastructure-as-a-service, but we didn’t have on-demand scaling and still put in a lot of effort to manage that infrastructure,” continues Svensson.

Originally gearing its platform to enterprise customers, such as large advertising agencies that need online video management systems, Sagastream wanted to also capture share in the small and midsize business market. To do so, the company needed a more cost-effective service, which meant finding a way to lower its own costs and overhead involved with managing its infrastructure. At the same time, while the company wanted to improve its ability to scale for the customers that it served, gaining customers from a new market further emphasized the need for improved scalability.

When the company reevaluated Amazon EC2, Sagastream felt that it was compromising its own service to accommodate the limitations with scalability and the added management that Amazon EC2 presented. “Amazon offers infrastructure as a service, and what we realized we needed was a platform as a service,” explains Svensson. “We needed better scalability and wanted to eliminate the tedious management processes so that we could better focus on improving our services for our customers.”

In February 2010, Sagastream decided to implement the Windows Azure platform, instead of Amazon EC2, for the next version of its online video platform: ensity. Windows Azure serves as the development, service hosting, and service management environment for the Windows Azure platform. It provides developers with on-demand compute and storage to host, scale, and manage web application on the Internet through Microsoft data centers. “Windows Azure is much better suited for our needs because we don’t have to worry about managing the infrastructure or setting up our own scaling logic for virtual servers,” says Svensson. “We don’t have to accommodate Windows Azure; Windows Azure accommodates us.”

Stateless Architecture
Developers at Sagastream already used the Microsoft Visual Studio 2010 development system, and, using the familiar tools, migrated to Windows Azure in less than two weeks. Because ensity already had a stateless architecture, the developers made some simple configurations to migrate the platform from Amazon EC2 to Windows Azure for compute and storage. Sagastream uses Windows Communication Foundation Data Services in the Microsoft .NET Framework to implement the Open Data Protocol (OData) to expose its server-side application programming interfaces (APIs), which are implemented as Windows Azure web roles. To control access to the service, Sagastream uses Windows Identity Foundation.

Ensity is in a closed beta until July 2010, which will be followed by an open beta. The commercial launch of the version-two online video platform is planned for November 2010.

Easy-to-use Service with Scalable Storage
Customers log on to the ensity platform through a control panel built with the Microsoft Silverlight 4 browser plug-in. Once customers have logged on, they can upload their video files, which are sent directly to Windows Azure Blob storage containers. “At the time we migrated, that was a unique quality with Windows Azure compared to Amazon EC2,” explains Svensson. “Files that customers upload never pass through our servers, so we don’t need to account for that capacity, which saves a lot of bandwidth and computing power—they’re sent directly to Windows Azure storage.”

* We don’t have to accommodate Windows Azure; Windows Azure accommodates us. *

Martin Svensson
CEO, Sagastream

After the videos are uploaded, they are sent to a third-party for encoding, and sent back to the Blob containers. Once the videos are encoded, customers can embed the videos in their own websites for advertising, marketing, or any number of purposes. Sagastream keeps statistics on each video, including how often it’s played and how long it is, which are stored in Windows Azure table storage. The company uses that data not only for billing purposes, but also to give customer rich reporting features to help them analyze their video use. In the future, Sagastream plans to use Windows Azure worker roles to encode the videos itself, instead of sending them to a third-party encoder.

Sagastream also migrated its hosted SQL Server instance to Microsoft SQL Azure to take advantage of database scalability in the cloud. Microsoft SQL Azure is a cloud-based relational database service built on Microsoft SQL Server 2008 technologies. It provides a highly available and scalable database service hosted by Microsoft. Sagastream used its existing database structure, making only minimal changes to the database schema when using SQL Azure. “We found that, in most cases, SQL Server and SQL Azure are identical, so it was easy to migrate to SQL Azure,” says Svensson. In addition, Sagastream uses SQL Azure Data Synch to synchronize databases across data centers.

As a result of using the Windows Azure platform, instead of Amazon EC2, Sagastream is quickly bringing its next-generation online video platform, ensity, to market. Sagastream no longer has to worry about managing its scaling logic and load balancing, and can scale up quickly to handle the massive amount of data required for online videos. It also simplified maintenance of its infrastructure and can focus on its own business logic by relying on Microsoft data centers. At the same time, the company reduced its hosting costs by half—savings that it can pass on to customers.

Fast Development
Developers at Sagastream used their existing development skills when migrating the online video platform from Amazon EC2 to Windows Azure, helping to speed the development time. “We use Visual Studio exclusively, and so were already familiar with the development environment,” says Svensson. “It can be expensive and time-consuming to switch platforms as we did, but it was fast to migrate, and development will continue to be fast as we add new features in the future.” The company looks forward to bringing enhancements and new services to market quickly with Windows Azure.

Improved, Easy Scalability
By using Windows Azure, Sagastream can quickly scale up to handle the heavy computational and storage needs it has for its online video platform. Whereas scaling up with Amazon EC2 required the company to add more virtual servers and manage its own scaling logic, now Sagastream can add compute instances and storage instances simply with a few clicks. “Windows Azure gives us the on-demand scalability that we need to process large amounts of data, no matter how quickly we grow,” says Svensson. This level of scalability will be particularly important as the company reaches new market segments, such as the small and midsize businesses it is targeting.

Total Cost of Ownership of Windows Azure over One Year
Simplified IT Management
Whereas with Amazon EC2 Sagastream still had to manage its infrastructure, albeit a mostly virtual one, now the company can rely on Microsoft data centers. “We don’t have to worry about implementing new virtual servers or a load-balancing strategy,” explains Svensson. “We let Microsoft manage all of that—it’s what they do best. And while we let Microsoft focus on what they do best, we can return our focus to what we do best.”

In addition, by using SQL Azure, Sagastream is further simplifying IT management. “We don’t even have to worry about backup and recovery. With SQL Azure, it’s taken care of for us,” continues Svensson.

Reduced Costs Passed on to Customers
Sagastream realized that a cloud-based service would enable it to avoid significant infrastructure costs from the beginning. However, the company was excited to further reduce costs when it migrated to Windows Azure from Amazon EC2. “Since moving to Windows Azure, we’ve cut our hosting costs in half—a savings of $3,600 annually,” says Svensson.

In addition, Sagastream will realize a lower total cost of ownership with Windows Azure. Compared to an on-premises infrastructure, Sagastream will save 73.7 percent over a one-year period.

The company will be able to pass those savings on to its customers, which will help make the service even more affordable for small and midsize businesses—a key goal for company. “As a result of moving to Windows Azure, we will certainly be able to offer our customers lower prices for our services, and that is a great end result,” explains Svensson.

Windows Azure Platform
The Windows Azure platform provides an excellent foundation for expanding online product and service offerings. The main components include:

Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform. Windows Azure provides developers with on-demand compute and storage to host, scale, and manage web applications on the Internet through Microsoft data centers.

Microsoft SQL Azure. Microsoft SQL Azure offers the first cloud-based relational and self-managed database service built on Microsoft SQL Server 2008 technologies.

Windows Azure platform AppFabric. With Windows Azure platform AppFabric, developers can build and manage applications more easily both on-premises and in the cloud.

  • AppFabric Service Bus connects services and applications across network boundaries to help developers build distributed applications.

  • AppFabric Access Control provides federated, claims-based access control for REST web services.

Microsoft "Dallas." Developers and information workers can use the new service code-named Dallas to easily discover, purchase, and manage premium data subscriptions in the Windows Azure platform.

To learn more about the Windows Azure platform, visit:

For More Information
For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:

For more information about Sagastream products and services, call (46) 317622500 or visit the website at:

Additional Resources:
Training: Channel9 Windows Azure Training Course 
Download: Windows Azure Training Kit 
Download: Windows Azure SDK 
White paper: Security Best Practices for Developing on the Windows Azure Platform 

Solution Overview

Organization Size: 9 employees

Organization Profile

Based in Gothenburg, Sweden, Sagastream develops an online video platform that enables customers to publish interactive videos on the web. Founded in 2008, the company has nine employees.

Business Situation

Sagastream used Amazon EC2 for its Saga Player online video platform, but wanted even more efficient scalability and to further streamline IT management.


The company implemented the Windows Azure cloud services platform for its compute and storage needs, and is releasing its next-generation online video platform, ensity, in November 2010.


  • Fast development
  • Improved, easy scalability
  • Simplified IT management
  • Reduced costs; lowered prices

Software and Services
  • Microsoft Azure
  • Microsoft Azure Platform
  • Microsoft SQL Azure
  • Microsoft SQL Server 2008
  • Microsoft Visual Studio 2010
  • Microsoft Silverlight 4
  • Microsoft .NET Framework
  • Windows Communication Foundation
  • Windows Identity Foundation

Vertical Industries
Professional Services


Business Need
Cloud & Server Platform