Netflix Jumps to Amazon
January 2, 2010
Want to enrage a giant, Oracular bull?
Bad news for Oracle, IBM as reported by Computerworld.com: Netflix is transferring its datacenter from Oracle on IBM hardware to Amazon Web Services’ (AWS) Elastic Compute Cloud (EC2) in an effort to save capital. The switch comes as Netflix’s customer count is headed through the roof, and thus the cost and un-reliability of maintaining or expanding the existing data centers is becoming too great a burden.
Netflix was already patronizing AWS for other less critical applications like customer interfacing and even announced last May its intention to expand this relationship. They weren’t kidding around. The decision is prompted by three major cost points. First, Oracle on IBM is inherently “very expensive”. Second, it would have required long hours and great effort for Netflix to build their own data center when systems are added to AWS’s cloud with ease. And finally, “EC2’s pay-as-you-go model means costs are elastic,” so no more paying for unused resources stranded on service contract.
Besides those direct cost reductions, this transition will free up other engineering resources required to baby-sit the existing infrastructure to be re-tasked in other areas.
Netflix makes some compelling arguments here; it doesn’t take long for the dominoes to fall. Wonder if other companies will realize the same thing and follow suit. It would be prudent for Oracle, IBM to investigate what upgrade options exist to be more competitive with AWS and to prevent further customer turnover.
Sarah Rogers, January 2, 2011
Freebie
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One Response to “Netflix Jumps to Amazon”
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I wonder what Netflix will do if Amazon launches their rumored streaming video subscription service. As much emphasis as NFLX is putting on streaming, I’m surprised they are going to rely so much on a potential competitor.