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I find it to be a peculiar business decision to completely (as much as you can) migrate to one of your largest competitors' cloud service. It seems like Microso

I find it to be a peculiar business decision to completely (as much as you can) migrate to one of your largest competitors' cloud service. It seems like Microsoft is the only, of the larger cloud providers, that doesn't -really- compete with Netflix. (Google has YouTube, and I guess even Microsoft has a much smaller Windows Store presence.) Even if Amazon can't access the raw data, they could see how you're utilizing it to improve their own video service, and they get the benefit of billing you and potentially using their pricing leverage to squeeze your margins. I feel like Apple's approach of utilizing multiple providers makes more sense (though they do this for uptime and redundancy.) Maybe I'm being a pessimist.

truncate 10y ago
As per this article, Netflix only migrated their billing infrastructure not their video streaming service.
- luhn 10y ago
  They only migrated their billing infrastructure because the rest of Netflix is already in AWS. As far as I'm aware, the only non-AWS Netflix component remaining is their CDN. (And it will likely remain that way.)
- niftich 10y ago
  That's because they've already migrated their videostreaming infrastructure to AWS (and some in Google Cloud Storage as a failsafe). This Ars Technica article from February summarizes the multi-year effort: http://arstechnica.com/information-technology/2016/02/netflix-finishes-its-massive-migration-to-the-amazon-cloud/ http://arstechnica.com/information-technology/2016/02/netfli...
  - ihsw 10y ago
    Just to be clear -- their video streams are still served up via Netflix's OpenConnect appliances. The surrounding infrastructure -- everything "outside" of the play button -- finished moving to AWS. Their billing system has now joined its siblings in living on AWS.
    - niftich 10y ago
      Those being the colocated servers they give to ISPs? EDIT: yes. [1] [2] [1] https://openconnect.netflix.com/ https://openconnect.netflix.com/ [2] http://www.datacenterdynamics.com/content-tracks/colo-cloud/netflix-closes-data-centers-and-goes-to-public-cloud/94615.fullarticle http://www.datacenterdynamics.com/content-tracks/colo-cloud/...
      - tacticus 10y ago
        Also the cdn edges they run themselves. https://www.youtube.com/watch?v=tbqcsHg-Q_o https://www.youtube.com/watch?v=tbqcsHg-Q_o very cool video.
hkmurakami 10y ago
If you think about it, Apple does something similar by having Samsung fab their processors.
- deleted 10y ago
  [deleted]
- kiwijamo 10y ago
  Amazon could, if they wanted to, obtain a lot more useful data from the data Netflix hosts in AWS than Samsung could from just making chips for Apple. So I'm not sure if it's a good comparison.
hiuhsdf 10y ago
Yeah, this decision makes no sense, AWS is not even cost-effective past a certain, relatively small, amount of resource usage. Netflix could have easily built their own infrastructure for this, plenty of smaller companies do it and save tons of money. The only thing that would make sense here is if Amazon offered them their services at a huge discount, which could be a move looking to either acquire Netflix in the near future or cripple it.
- drewrv 10y ago
  It's an easier task for a smaller company to pull off, and I'll bet Netflix is getting a better deal than most of us could negotiate.
- GrinningFool 10y ago
  Netflix started with their own infrastructure[1] and migrated it all to AWS. Presumably this was more cost-effective for them. [1] https://media.netflix.com/en/company-blog/completing-the-netflix-cloud-migration https://media.netflix.com/en/company-blog/completing-the-net...
  - tomphoolery 10y ago
    it is WAY more cost-effective when you get to that kind of scale to use someone else's battle-tested APIs. the best part is that when that stuff breaks down, it's not your job to fix it.
    - NetTechM 10y ago
      Plus, no pricey salaries to have event response teams on the payroll.
      - bpicolo 10y ago
        I mean, you still have a lot of people doing operational work at Netflix scale, regardless of where your infra is
      - 10y ago
nitwit005 10y ago
Microsoft also sells through the Xbox platform, which is in direct competition for the TV space.
stoic 10y ago
I don't think the differentiation in that space is in technical implementation, but rather in content quality (produced or "acquired")
curun1r 10y ago
I don't see Netflix and Amazon being serious competitors...yet. For both of them, the main competitor is cable. The more that either/both of them are able to get people to "cut the cord," the better it will be for both of them. I can't speak for others, but for me, the decision wasn't, "should I choose Netflix or Prime Video?" Instead, it was, "Can I find enough programming to satisfy me for less than I'm paying for cable?" The only way my answer was yes was with multiple streaming subscriptions.
tomphoolery 10y ago
> Even if Amazon can't access the raw data, they could see how you're utilizing it to improve their own video service, and they get the benefit of billing you and potentially using their pricing leverage to squeeze your margins. So you're saying Amazon is going to risk millions of dollars so they can make a few more bucks on video streaming, which is like 3 levels down from their primary business? Prove it. I had an argument with my last company about this very issue. If Amazon's primary business was video delivery, then that would make a lot of sense. But where does Amazon's primary revenue stream actually come from? That's right, it's AWS. Amazon may be an excellent retailer, but they spend just as much money as they make on the shipping and fulfillment side to get shit on your doorstep faster and cheaper than anyone else out there. Each person that spends money on Amazon can only really spend a few hundred dollars per year. But even a small company that's entirely hosted on AWS, like 70% of the companies I've worked for, pays Amazon thousands of dollars per month for hosting. There's definitely more people than companies, but shipping stuff to people costs a lot more money than Amazon needs to pay in order to have your stuff hosted by them. Plus they do a lot of R&D into making their own systems faster and more efficient, eventually passing savings down when they re-work their pricing tiers. Basically, my argument is/was that the whole idea of Amazon stealing your IP to make a few extra bucks on whatever they happen to be doing is totally bunk. Amazon is really in the infrastructure business, and if you're a video startup...you're NOT. And take it from someone who watched a company try and fail to build a competing private cloud with no budget and a skeleton crew...it's stressful and not fun at all. The main reason to use multiple providers is, as you said, uptime and redundancy...and "not putting all your eggs in one basket", so to speak. It's an engineering, not political, decision. My last company could have probably saved themselves by moving everything to AWS and shutting down their Level3 internet-backbone connectivity and direct fiber from the office to the datacenter (which is the same technology AWS is using anyway, except they have an actual cloud API and not just a pile of servers), but they were too busy conflating this engineering/performance decision with one that must be made for political reasons.
- chipperyman573 10y ago
  >Amazon may be an excellent retailer, but they spend just as much money as they make on the shipping and fulfillment side to get shit on your doorstep faster and cheaper than anyone else out there. Each person that spends money on Amazon can only really spend a few hundred dollars per year. But even a small company that's entirely hosted on AWS, like 70% of the companies I've worked for, pays Amazon thousands of dollars per month for hosting But there are a lot more people than businesses, and an order of magnitude more people than businesses who both need custom hosting infrastructure and choose AWS.
justinmk 10y ago
> I find it to be a peculiar business decision to completely (as much as you can) migrate to one of your largest competitors' cloud service. This was directly addressed in a 2011 talk[1] by a director at Netflix: > Competition drives cost down > [...] > We would prefer to be an insignificant customer in a giant cloud. [1] https://justinmk.github.io/2016/03/17/selfish-cooperation.html https://justinmk.github.io/2016/03/17/selfish-cooperation.ht...
antaviana 10y ago
How do you know Microsoft will not compete with you sometime next quarter? Did you anticipate the LinkedIn purchase with which Microsoft enters the job search market?
limeyx 10y ago
I think for smaller companies it could make sense but Netflix is big enough and visible enough that if AWS cut them off, I think you'd see a huge exodus off of AWS of people fearing they would be next ... simply not worth it to Amazon to shoot itself in the foot like that IMO

truncate 10y ago

As per this article, Netflix only migrated their billing infrastructure not their video streaming service.

luhn 10y ago
They only migrated their billing infrastructure because the rest of Netflix is already in AWS. As far as I'm aware, the only non-AWS Netflix component remaining is their CDN. (And it will likely remain that way.)
niftich 10y ago
That's because they've already migrated their videostreaming infrastructure to AWS (and some in Google Cloud Storage as a failsafe). This Ars Technica article from February summarizes the multi-year effort: http://arstechnica.com/information-technology/2016/02/netflix-finishes-its-massive-migration-to-the-amazon-cloud/ http://arstechnica.com/information-technology/2016/02/netfli...
- ihsw 10y ago
  Just to be clear -- their video streams are still served up via Netflix's OpenConnect appliances. The surrounding infrastructure -- everything "outside" of the play button -- finished moving to AWS. Their billing system has now joined its siblings in living on AWS.
  - niftich 10y ago
    Those being the colocated servers they give to ISPs? EDIT: yes. [1] [2] [1] https://openconnect.netflix.com/ https://openconnect.netflix.com/ [2] http://www.datacenterdynamics.com/content-tracks/colo-cloud/netflix-closes-data-centers-and-goes-to-public-cloud/94615.fullarticle http://www.datacenterdynamics.com/content-tracks/colo-cloud/...
    - tacticus 10y ago
      Also the cdn edges they run themselves. https://www.youtube.com/watch?v=tbqcsHg-Q_o https://www.youtube.com/watch?v=tbqcsHg-Q_o very cool video.

hkmurakami 10y ago

If you think about it, Apple does something similar by having Samsung fab their processors.

deleted 10y ago
[deleted]
kiwijamo 10y ago
Amazon could, if they wanted to, obtain a lot more useful data from the data Netflix hosts in AWS than Samsung could from just making chips for Apple. So I'm not sure if it's a good comparison.

hiuhsdf 10y ago

Yeah, this decision makes no sense, AWS is not even cost-effective past a certain, relatively small, amount of resource usage. Netflix could have easily built their own infrastructure for this, plenty of smaller companies do it and save tons of money. The only thing that would make sense here is if Amazon offered them their services at a huge discount, which could be a move looking to either acquire Netflix in the near future or cripple it.

drewrv 10y ago
It's an easier task for a smaller company to pull off, and I'll bet Netflix is getting a better deal than most of us could negotiate.
GrinningFool 10y ago
Netflix started with their own infrastructure[1] and migrated it all to AWS. Presumably this was more cost-effective for them. [1] https://media.netflix.com/en/company-blog/completing-the-netflix-cloud-migration https://media.netflix.com/en/company-blog/completing-the-net...
- tomphoolery 10y ago
  it is WAY more cost-effective when you get to that kind of scale to use someone else's battle-tested APIs. the best part is that when that stuff breaks down, it's not your job to fix it.
  - NetTechM 10y ago
    Plus, no pricey salaries to have event response teams on the payroll.
    - bpicolo 10y ago
      I mean, you still have a lot of people doing operational work at Netflix scale, regardless of where your infra is
    - 10y ago

nitwit005 10y ago

Microsoft also sells through the Xbox platform, which is in direct competition for the TV space.

stoic 10y ago

I don't think the differentiation in that space is in technical implementation, but rather in content quality (produced or "acquired")

curun1r 10y ago

I don't see Netflix and Amazon being serious competitors...yet. For both of them, the main competitor is cable. The more that either/both of them are able to get people to "cut the cord," the better it will be for both of them. I can't speak for others, but for me, the decision wasn't, "should I choose Netflix or Prime Video?" Instead, it was, "Can I find enough programming to satisfy me for less than I'm paying for cable?" The only way my answer was yes was with multiple streaming subscriptions.

tomphoolery 10y ago

> Even if Amazon can't access the raw data, they could see how you're utilizing it to improve their own video service, and they get the benefit of billing you and potentially using their pricing leverage to squeeze your margins. So you're saying Amazon is going to risk millions of dollars so they can make a few more bucks on video streaming, which is like 3 levels down from their primary business? Prove it. I had an argument with my last company about this very issue. If Amazon's primary business was video delivery, then that would make a lot of sense. But where does Amazon's primary revenue stream actually come from? That's right, it's AWS. Amazon may be an excellent retailer, but they spend just as much money as they make on the shipping and fulfillment side to get shit on your doorstep faster and cheaper than anyone else out there. Each person that spends money on Amazon can only really spend a few hundred dollars per year. But even a small company that's entirely hosted on AWS, like 70% of the companies I've worked for, pays Amazon thousands of dollars per month for hosting. There's definitely more people than companies, but shipping stuff to people costs a lot more money than Amazon needs to pay in order to have your stuff hosted by them. Plus they do a lot of R&D into making their own systems faster and more efficient, eventually passing savings down when they re-work their pricing tiers. Basically, my argument is/was that the whole idea of Amazon stealing your IP to make a few extra bucks on whatever they happen to be doing is totally bunk. Amazon is really in the infrastructure business, and if you're a video startup...you're NOT. And take it from someone who watched a company try and fail to build a competing private cloud with no budget and a skeleton crew...it's stressful and not fun at all. The main reason to use multiple providers is, as you said, uptime and redundancy...and "not putting all your eggs in one basket", so to speak. It's an engineering, not political, decision. My last company could have probably saved themselves by moving everything to AWS and shutting down their Level3 internet-backbone connectivity and direct fiber from the office to the datacenter (which is the same technology AWS is using anyway, except they have an actual cloud API and not just a pile of servers), but they were too busy conflating this engineering/performance decision with one that must be made for political reasons.

chipperyman573 10y ago
>Amazon may be an excellent retailer, but they spend just as much money as they make on the shipping and fulfillment side to get shit on your doorstep faster and cheaper than anyone else out there. Each person that spends money on Amazon can only really spend a few hundred dollars per year. But even a small company that's entirely hosted on AWS, like 70% of the companies I've worked for, pays Amazon thousands of dollars per month for hosting But there are a lot more people than businesses, and an order of magnitude more people than businesses who both need custom hosting infrastructure and choose AWS.

justinmk 10y ago

> I find it to be a peculiar business decision to completely (as much as you can) migrate to one of your largest competitors' cloud service. This was directly addressed in a 2011 talk[1] by a director at Netflix: > Competition drives cost down > [...] > We would prefer to be an insignificant customer in a giant cloud. [1] https://justinmk.github.io/2016/03/17/selfish-cooperation.html https://justinmk.github.io/2016/03/17/selfish-cooperation.ht...

antaviana 10y ago

How do you know Microsoft will not compete with you sometime next quarter? Did you anticipate the LinkedIn purchase with which Microsoft enters the job search market?

limeyx 10y ago

I think for smaller companies it could make sense but Netflix is big enough and visible enough that if AWS cut them off, I think you'd see a huge exodus off of AWS of people fearing they would be next ... simply not worth it to Amazon to shoot itself in the foot like that IMO