Netflix Closed Their Last Data Center – Should You Do The Same?

The Netflix announcement back in August of 2015 wasn’t a very big deal. In fact it probably went unnoticed by most people. However, from the point of view of those of us with the CIO job, it was sorta like a bomb had gone off. The company sent an email out that announced that in a month they planned on shutting down their very last operational data center. What this means is that they are now running their company entirely in “the cloud”. Should you be doing this?

How Netflix Moved To The Cloud

As important as this move into the cloud is, what we CIOs need to keep in mind is that Netflix understands the importance of information technology and has always had a strong commitment to using the cloud. If you think about their business for just a moment, it’s almost a poster child for a cloud-based firm. Every month Netflix attempts to both sign up additional customers for their DVD Netflix Mod apk delivery and, more recently, their video streaming service. At the same time they try to retain the customers that they already have. The end result of all of this is that their IT needs are growing by leaps and bounds.

In their press release, Netflix was careful to point out that for their video streaming service, they have been 100% cloud based for their customer facing systems for quite some time. Netflix’s decision to move all of its operations into the cloud was not a decision that they reached overnight. Instead, this has been a 7 year project that is only now coming to a close.

Netflix made the decision to move all of their IT operations into the cloud after the company experienced a major hardware failure back in 2008. The next year was when they first got serious about moving their company’s applications into the cloud. The first of these applications to make the transition was the company’s jobs page on its website. After this they moved their video player, their iPhone related technology, discovery / search functionality, and their accounts pages. They moved their Big Data platform into the cloud back in 2013 and their billing and payments processing made the trip in 2014.

What It Means To Be Entirely In The Cloud

Netflix’s plan to shut down their last data center makes them unique. They are going to be one of the first big companies to completely move their IT operations into the cloud. According to a recent survey, about 12% of companies currently run all of their IT operations in the cloud. What’s interesting about this statistic is that most of these companies are small or medium sized businesses – nowhere near the size of Netflix. This is changing. The experts predict that by 2022 they believe that 20% of large enterprise companies will be operating entirely in the cloud.

Moving entirely to the cloud is not something that most big companies can do easily. The reason for this is because of the sensitive business software that many larger companies run either in their own data centers or on dedicated cloud resources provided by another company. Any person in the CIO position knows that it’s the legacy applications that we all have that will always prove to be the hardest to migrate into the cloud.

If you want to move all of your IT operations into the cloud, you are going to have to pick the right cloud partner to team with. In the case of Netflix they have selected Amazon and their Amazon Web Services offering to host all of the Netflix applications. Netflix is willing to admit that they are now “… fully reliant on Amazon Web Services… ” The advantage of switching to this architecture is that Netflix no longer has to estimate months in advance how many servers they are going to need in order to serve their growing base of subscribers. When they need additional servers, they can just call Amazon and the servers will be turned up that same day.

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