Can Netflix become the first large scale “virtual IT” company?

With the move to all of their corporate IT to the cloud, Netflix will be completely virtualizing all of their internal IT operations, from content delivery to basic business services
Written by David Chernicoff, Contributor

Back in June I wrote about Netflix beginning the deployment of their own content delivery network.  This week Netflix announced that they would be moving 95% of their internal IT operations to the Amazon cloud, with plans to eventually completely migrate IT operations to the cloud service that already hosts the streaming content that Netflix delivers to its subscribers.

Netflix has been working for at least the last two years to reduce the footprint of its corporate datacenter, which currently host 2500 virtual server instances. Mike Kali, VP of IT Operations expects the migration of these servers to the cloud to take about 18 months.

Given the nature of Netflix operations, which are basically completely cloud dependent, moving the administrative side of the business to the cloud makes perfect sense. Unlike most companies, who would need to be reassured that the cloud will be sufficiently dependable to be there when they need it, Netflix doesn’t have to worry; if the cloud is unavailable, so is their business.

One thing that they are trusting in is that Amazon has learned from their previous mistakes and problems and that there will not be a single point of failure that can take the administrative needs of Netflix offline. The Netflix CDN, while fed from the backend of the Amazon cloud, has the resiliency delivered by their CDN appliances, installed at hosting companies worldwide. Multiple routes and hosts for content means that customer content delivery can take the hit of some percentage of the service becoming unavailable. And Netflix owns and controls the CDN.

This won’t be true of the IT services that they are planning on migrating now. These business services will be completely dependent on the availability of the Amazon backend.  That, in itself, should be considered a major vote of confidence for the idea of virtualized IT services. Customers for a company like Netflix have already proven how fickle they can be when they feel that customer service and product isn’t first class.  Netflix is betting the entire future of their business on the Amazon cloud.


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