“Netflix Shifts All IT to Amazon’s Public Cloud” is an article from the Wall Street Journal by Angus Loten. Netflix, a global provider of streaming movies and television series, had formerly used an on premise data center to run all aspects of the company’s information technology. However, as of January 2016, the company has shifted all of its information technology to Amazon Web Services, Amazon.com Incorporated’s public cloud platform. The move from the on premise data center to the cloud included the company’s customer-facing video-streaming services, its billing infrastructure, its customer and employee data management, business logic distributed databases, big data processing and analytics, recommendations and transcoding apps, and hundreds of more IT functions.
As of February 2016, Netflix has completely shut down their on premise data center. Netflix now has eight times more video-streaming members than it did in 2008, when it first decided to switch its IT to the cloud. It is also continuing to rapidly change and grow. The cloud is making it easier to operate the company’s significant amount of data. “Supporting such rapid growth would have been extremely difficult out of our own data centers; we simply could not have racked the servers fast enough,” Izrailevsky, the vide president of cloud and platform engineering, said in another article.
By transitioning from the on premise data center to the cloud, Netflix not only saved money on their information technology and data, but they also increased the public-clouds market IT spending. Because of their transition to the cloud, Netflix’s operating costs decreased. This is because the cloud makes it easier and less costly to grow or shrink the capacity of IT. Also, the public-cloud market is expected to increase by $70 billion dollars by 2019.
Netflix is building a path for other large companies to convert to the cloud. With this migration to Amazon’s public cloud, it has become one of the largest companies to operate entirely in the public cloud. When other companies see the improvement of Netflix’s information technology, they will shortly follow in its footsteps. This will greatly increase the public-clouds market spending.
One thing that Netflix did wrong in this transition from their on premise data center to the cloud was that they used the cloud-native strategy, which means they rebuilt most of their technology in the cloud. In order to transition quicker, they could have used the “forklift” strategy, which means to simply drop existing applications into off-premise servers. Another thing that Netflix may have overlooked is that since Amazon Prime is one of their biggest competitors, Amazon Prime probably has been using the Amazon cloud for a long time. If Netflix makes any mistakes regarding the cloud, Amazon Prime could easily pick up on those mistakes and take advantage of them. Lastly, many companies are taking a hybrid approach to controlling information technology. Since these companies are not completely replacing their existing systems, they will save money for other uses.