Amazon launches Prime Instant Video how does Netflix feel about Hosting on Amazon Web Services
I was recently at the Silicon Valley Cloud Computing meetup hosted by Facebook where Netflix was talking about their hosting nearly their entire cluster on Amazon Web Services. Specifically – SimpleDB.
Here’s what really would bother me if I was at Netflix… Amazon decides to compete with you heads on in my primary market.
Well that is what’s happening. Amazon is getting right into the video streaming space.
Why shouldn’t they? They want to do with DVDs what they did for books. Make them more accessible and easier to access. It’s their modus operandi.
So now your data provider is a direct competitor. Now what?
Should you just abandon your entire stack? Years of investment? Maybe. Probably. But now what? Where do you go?
Maybe they can go with Cassandra on RackSpace. It’s not going to be easy.
Many would say that this isn’t going to be a problem. They’re going to say that Amazon will be politically correct and not cut you off at the knees. After all, if they cut off one customer, Amazon is going to look bad and it’s going to hurt their hosting business (which is growing rather large).
But I’ll tell you what’s NOT going to happen.
Netflix won’t be able to collaborate with Amazon on large purchases regarding a launch. It will provide nice competitive intel to one of their main competitors.
Amazon now has tons of intel about their bandwidth, hardware stack, and database configuration. Amazon could in theory just flat out look at their entire database. I’m not saying that this would happen but it’s possible.
If Netflix were hosted at Rackspace it would put up a pretty significant wall that would prevent Amazon from spying.
Further, what happens if Netflix has a major outage and needs Amazon to step in and help. From time to time something major will happen and you need your hosting provider to step up and help.
We’ve done it with Softlayer and Serverbeach in the past at Spinn3r. We have some sort of very difficult problem and we work directly with our hosting provider to help us jump through hoops to fix it.
You think Amazon is going to be motivated to help one of their main competitors launch a new product? You think they’re going to push a SimpleDB fix to patch a production issue that Netflix sees? Maybe, but their interests aren’t 100% aligned and this is frightening.
Here’s more about Amazon launching Prime Instant Video:
We heard it was coming and now here it is. Amazon has flipped the switch on its “free” video streaming for Prime members, the service we’ve been hearing about for the past month or so. If you’ve already been taking advantage of subscription-based two-day shipping so that your impulse buys get to your door a little quicker you can now enjoy streaming of 5,000 pieces of “prime eligible” content, including some recent movies and a lot of TV shows, much of which will look awfully familiar if you’re also a Netflix subscriber.