You want to host your video encoding software on Compute Engine.

Instance groups are collections of virtual machine (VM) instances that you can manage as a single entity. Instance groups can help you simplify the management of multiple instances, reduce operational costs, and improve the availability and performance of your applications. Instance groups support autoscaling, which automatically adds or removes instances from the group based on increases or decreases in load. Autoscaling helps your applications gracefully handle increases in traffic and reduces cost when the need for resources is lower. You can set the autoscaling policy based on CPU utilization, load balancing capacity, Cloud Monitoring metrics, or a queue-based workload. In this case, since the video encoding software is CPU-intensive, setting the autoscaling based on CPU utilization is the best option to ensure high availability and optimal performance. References:

Instance groups

Autoscaling groups of instances