I will book mark this. However, the problem I see with something like this is redundancy -- I would need atleast 2 servers and that would add up to USD 12k per annum.

Yeah redundancy is going to be expensive. Was your $7k+4k per server or was that for a pair?

It wouldn't hurt to use AWS as a backup though - if you're unexpectedly offline for 24 hours just fire up a big server that is affordable for a short burst.

Each Dell Peoweredge c6100 is around USD$ 1500 -- each server contains 4 nodes . Each node is a dual CPU server with its own RAID ,network port and IPMI port.I think only the power supply is shared with all 4 nodes. have 2 or 3 of these kind of gives a lot of redundancy. The CPU is kinda dated and slow though.

I think I would try just one plus AWS-for-emergencies first.

Or possibly http://zencoder.com/en/ until the expense justifies investing in your own hardware.