Netflix and Cloud Computing: A lesson.


If we talk about cloud computing, Netflix’s majority of the data ran on Amazon Web Services but with time, it slowly started to take lead in technology: did things that were not done before. Therefore, the situation required Netflix to come up with a software technology to allow their own applications to function successfully in the cloud environment and obviously, they successfully came up with cloud based software technologies.  

Netflix being the genius that it is, realised the true value of cloud on the basis of scale as well as reliability in leveraging Amazon Web Services and this in turn led towards the saving of costs. Not like Netflix was stumbled under the fixed costs of scaling their private data centre for peak load but this decision positively helped Netflix and allowed the company to save their costs.  

All of us know how tough it is to achieve five nines availability in a private data centre but let me tell you: it’s even harder in a cloud based application. Netflix however played well as it was very selective and about the services that were to be migrated to the public cloud and was then able to reach four nines availability: setting clear cut examples for the companies about the importance and impact of the mighty public cloud when migrating to it.

Similar are the lessons if we talk about the application architecture and how it helped Netflix to cut off their costs on public cloud as compared to the private cloud. The forklift approach allows one to choose and pick up the already existing environment and then put it into the amazon web services not allowing a company to reap maximum benefits of elasticity and sustainability. And this approach is exactly what Netflix did not follow. Instead they first evaluated their own application structure and then worked on the restructuring of their architecture.

Adding to this, this great company wasn’t behind anyone when we talk about the idea of commitment. However, way before the commitment to the Amazon Web Services, the platform was researched thoroughly and test systems were tried and tested allowing the company to stimulate realistic traffic patterns against these research projects. This in turn played a pivotal part in the company actually choosing the Amazon Web Services. However, this wasn’t enough and the company created a repeater and copied customer request traffics to their Amazon Web Services system; this allowed the company to actually see whether the ideas written on a whiteboard were good enough for the real world or not.

As the John Ciancutti said: “As you run into the hurdles, have the grit and the conviction to fight through them.”


3 comments on “Netflix and Cloud Computing: A lesson.”

  1. Hi Zareen-
    Thanks for the post, and interesting ideas. Can you clarify your point on Netflix is using Amazon Web Services (AWS)? It sounds like you are saying they used to use AWS, but to save costs, they built their own private cloud computing center? Are they still using AWS? Would love to see references in your blog as well so I can see where your data/research is coming from.

  2. I think similarly to what was said in lecture, there is an advantage with starting from scratch. As you mention, Netflix tried to tackle this concept with their own application structure. I was fortunate enough to take a class with one of the early investors of Netflix and learned that what they originated as was just a test to see where they could go in the future. Fortunately, that test allowed them to rise VERY quickly to the service they are today. Do you think that AWS was a huge factor in this immediate growth or just a tool used? With this insight, where do you see Netflix moving toward in the future as they have clearly changed their business model over time?

  3. This is an extremely interesting topic – seeing Amazon and Netflix competing in Video on Demand (VOD) space, while Netflix being to a certain degree a customer of AWS. Let’s think about how would we gather insights as a cloud provider? I can see a team of economists and engineers at Amazon drawing conclusions from providing cloud services to Netflix. This expands from technological conclusions of optimized streaming of video titles to market calculations with customer growth and market sizing. Being a cloud provider generates inbound market intelligence!


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