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But this is also the way the world is moving – don't hirer or purchase anything that is not your companies core competency. Don't run a janitorial service? Use

But this is also the way the world is moving – don't hirer or purchase anything that is not your companies core competency. Don't run a janitorial service? Use contractors and hirer/fire at will [1]. Don't run a CRM service? Use Salesforce and pay per user. Don't run a server company? Use AWS and turn on/off servers. Don't run a payments company? Use Square/Stripe and never think about payment types. Modern business is becoming (for better or worse) about owning 0 assets and only focusing on your core product. Yes, with all these things you can do it yourself, but having a company that is an expert in that service saves your business time (and often already employees the best resources in that industry). [1] https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-inequality-consider-the-janitors-at-two-top-companies-then-and-now.html https://www.nytimes.com/2017/09/03/upshot/to-understand-risi...

kolbe 7y ago
Where AWS succeeds is actually in its ability to save money. Netflix has elastic demands that are negatively correlated with other users. Netflix doesn't have a system to share compute resources with say a hedge fund. Amazon steps in and allows them both to save money by having one server fulfill both their needs instead of two. The problem being solved has nothing to do with expertise. Netflix is as equipped as anyone to manage their own data center. It's not just domain expertise. It's a marketplace. That said, there may be reasons that WeWork could entice companies to join, but there still need to be reasons. Extrapolating with a hand wave just doesn't cut it.
- julianozen 7y ago
  Well the same thing applies. WeWork can step in and allow Netflix and a hedge fund to save money on a floor in a remote destination where both companies don't know anything about the region except for how many people they plan to employ there. When one of them needs a bigger office, they move out and another company moves in Again Netflix is equipped to have office managers, find people/firms to scout nice neighborhoods to remote cities, and stock kombucha, but all of this requires hiring people to do a job that Netflix fundamentally doesn't care about. WeWork will save money for companies not ready to commit to long term leases, and it will certainly save time for companies that don't want to have to think about this
  - kolbe 7y ago
    What I'm pointing out is that Netflix is not equipped to manage a shared server marketplace. They don't manage their own servers because Amazon/Google can do it more effectively for more reasons than expertise. You seem hung up on the idea that companies just want to give up money to pay other people to do stuff they don't like. A better analogy may be legal work. Law firms offer a way to use lawyers as companies need them, and to share these resources among multiple companies. But all corporations still hire in-house counsel to fulfill the needs they know that they have. None of them say "analyzing law isn't our expertise, so we exclusively use law firms." But almost all of them use law firms, because there are niche specialties that aren't worth hiring for, and times when more lawyers are needed to handle a particularly heavy load. WeWork can definitely fulfill similar analogous roles in real estate. When Facebook has three people who wants to work remotely in Missoula, co-working spaces will win their business. But Facebook is never moving its campus to WeWork, and any startup with over 50 people and decent funding will realize how unnecessarily expensive it is to use a coworking space, and cut out the middle man. What's left is not a $1T/year business.
    - deleted 7y ago
      [deleted]
    - julianozen 7y ago
      https://www.bizjournals.com/sanjose/news/2018/06/21/facebook-wework-mountain-view-lease-campus.html https://www.bizjournals.com/sanjose/news/2018/06/21/facebook...
- redis_mlc 7y ago
  > Netflix has elastic demands that are negatively correlated with other users. No, that's not what is going on with Netflix and AWS. Netflix stores metadata in AWS, and uses their OpenCDN for streaming traffic. The metadata servers can autoscale, but not enough to call it elastic since it's not correlated with end-user requests. > Netflix is as equipped as anyone to manage their own data center. They don't think so, which is why after a 5-day outage they moved to AWS in the first place. At a high level, you're wrong by 180 degrees. I'm guessing you thought Econ 101 can be applied anywhere, a common but wrong-headed fallacy by HN'ers. Source: worked at Netflix.

kolbe 7y ago

Where AWS succeeds is actually in its ability to save money. Netflix has elastic demands that are negatively correlated with other users. Netflix doesn't have a system to share compute resources with say a hedge fund. Amazon steps in and allows them both to save money by having one server fulfill both their needs instead of two. The problem being solved has nothing to do with expertise. Netflix is as equipped as anyone to manage their own data center. It's not just domain expertise. It's a marketplace. That said, there may be reasons that WeWork could entice companies to join, but there still need to be reasons. Extrapolating with a hand wave just doesn't cut it.

julianozen 7y ago
Well the same thing applies. WeWork can step in and allow Netflix and a hedge fund to save money on a floor in a remote destination where both companies don't know anything about the region except for how many people they plan to employ there. When one of them needs a bigger office, they move out and another company moves in Again Netflix is equipped to have office managers, find people/firms to scout nice neighborhoods to remote cities, and stock kombucha, but all of this requires hiring people to do a job that Netflix fundamentally doesn't care about. WeWork will save money for companies not ready to commit to long term leases, and it will certainly save time for companies that don't want to have to think about this
- kolbe 7y ago
  What I'm pointing out is that Netflix is not equipped to manage a shared server marketplace. They don't manage their own servers because Amazon/Google can do it more effectively for more reasons than expertise. You seem hung up on the idea that companies just want to give up money to pay other people to do stuff they don't like. A better analogy may be legal work. Law firms offer a way to use lawyers as companies need them, and to share these resources among multiple companies. But all corporations still hire in-house counsel to fulfill the needs they know that they have. None of them say "analyzing law isn't our expertise, so we exclusively use law firms." But almost all of them use law firms, because there are niche specialties that aren't worth hiring for, and times when more lawyers are needed to handle a particularly heavy load. WeWork can definitely fulfill similar analogous roles in real estate. When Facebook has three people who wants to work remotely in Missoula, co-working spaces will win their business. But Facebook is never moving its campus to WeWork, and any startup with over 50 people and decent funding will realize how unnecessarily expensive it is to use a coworking space, and cut out the middle man. What's left is not a $1T/year business.
  - deleted 7y ago
    [deleted]
  - julianozen 7y ago
    https://www.bizjournals.com/sanjose/news/2018/06/21/facebook-wework-mountain-view-lease-campus.html https://www.bizjournals.com/sanjose/news/2018/06/21/facebook...
redis_mlc 7y ago
> Netflix has elastic demands that are negatively correlated with other users. No, that's not what is going on with Netflix and AWS. Netflix stores metadata in AWS, and uses their OpenCDN for streaming traffic. The metadata servers can autoscale, but not enough to call it elastic since it's not correlated with end-user requests. > Netflix is as equipped as anyone to manage their own data center. They don't think so, which is why after a 5-day outage they moved to AWS in the first place. At a high level, you're wrong by 180 degrees. I'm guessing you thought Econ 101 can be applied anywhere, a common but wrong-headed fallacy by HN'ers. Source: worked at Netflix.