Netflix Loses Its Cloud Guru to a VC Firm

http://www.businessweek.com/articles/2014-01-07/netflix-loses-its-cloud-guru-to-a-vc-firm

by ckoglmeier • 13 years ago

45 21 13 years ago

jnsaff2• 13 years ago

Here is his own blog, maybe more interesting to read: http://perfcap.blogspot.com/

latch• 13 years ago

I wish we could observe a parallel universe where Netflix went a different route and stayed with dedicated or went with colocation. I'd love to compare the outcome with their decision to go with AWS (minus CDN).

imbriaco• 13 years ago

They came from a datacenter world before they moved to AWS. The problem was that they had a traditional enterprise IT organization with big process and relying on Oracle, SANs, and all the same old enterprise IT solutions. It was built to run a company that was focused on operating warehouses and logistics, and not an agile web company.

Moving to the cloud was as much an organizational transformation as it was a technical one. And the move to AWS has paid them dividends in organizational and technical agility, as well as execution speed. I will never believe that it saved them money when compared to a well run physical infrastructure that was more purpose built for what they do, but they did not demonstrate the ability to run a physical infrastructure well so it's kind of moot.

It worked out great for them and gave Adrian some great stories to share. Congrats to him on the move to Battery, that's a fantastic team.

avenger123• 13 years ago

Does Netflix get special pricing for AWS? With their scale, they could probably negotiate with Amazon for lower rates.

zorked• 13 years ago

Certainly, see for example https://aws.amazon.com/ec2/reserved-instances/, search for "Scale with your Business". Similar discounts exist for most of their other services.

Xorlev2• 13 years ago

Not to mention, Netflix is a flagship customer for AWS and directly results in AWS getting more business, so I'd expect the discounts to be even deeper for Netflix.

rtpg• 13 years ago

I remember reading something about how AWS is pretty much running very close to at cost (super razor-thin margins, just like the Amazon shops themselves),but seeing these numbers seems to imply otherwise (20% is a big chunk of change).

yoda_sl• 13 years ago

Not only Netflix they get some better price (I have no info but it will not be surprising) but I have even heard that Netflix do work with the AWS team to test first some new features before AWS release it to a larger public.

I have even heard that a couple AWS service were in fact created because Netflix was asking for it.

Netflix being probably the most visible company on AWS, I am sure they do have some special deal with Amazon.

Anyway concerning the news, it will be interesting to see Adrian in his new role! He is a great guy!

mathattack• 13 years ago

This type of relationship is common with firms and their largest leading edge customers. It helps both, and it pushes the market.

dmourati2• 13 years ago

They most certainly do.

encoderer• 13 years ago

Actually, many many companies (including a startup I once worked for) had negotiated rates w/ Amazon. Netflix is certainly paying far less than sticker price.

kitcar2• 13 years ago

One thing to note about a lot of "infrastructure" businesses is it can make business sense for them to offer deep discounts to large customers to cover their overhead - they then make their profit by selling whatever excess capacity is left over to smaller customers.

I.e. imagine you want to setup a new courier business. You convince Amazon to move all their shipping to your new courier company, by giving them a price which is almost unprofitable for you. You then make your profit on the excess capacity you have, by selling it to individuals who need shipping at more profitable prices.

epa• 13 years ago

Although, scary business model if you lose that customer

michaelochurch• 13 years ago

Foolish me. I thought this tweet (https://twitter.com/HackerNewsOnion/status/42071605314074214...) was a joke.

Netflix Loses Its Cloud Guru to a VC Firm

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