

Netflix Says Use of Amazon AWS is a Competitive Risk - aasarava
http://paidcontent.org/article/419-what-worries-netflix-about-amazon-isnt-just-competition/

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fludlight
This article is an exaggeration. Due to various laws, regulations, and the
fear of being sued by their shareholders, publicly traded companies in the US
report every risk factor imaginable in their annual reports. The report in
question includes 13 full pages of these.

The relevant section of the 10K is:

 _We rely upon Amazon Web Services to operate certain aspects of our service
and any disruption of or interference with our use of the Amazon Web Services
operation would impact our operations and our business would be adversely
impacted.

Amazon Web Services, or AWS, provides a distributed computing infrastructure
platform for business operations, or what is commonly referred to as a cloud
computing service. We have architected our software and computer systems so as
to utilize data processing, storage capabilities and other services provided
by AWS. Currently, we run the majority of our computing at AWS. Given this,
along with the fact that we cannot easily switch our AWS operations to another
cloud provider, any disruption of or interference with our use of AWS would
impact our operations and our business would be adversely impacted. While the
retail side of Amazon may compete with us, we do not believe that Amazon will
use the AWS operation in such a manner as to gain competitive advantage
against our service._

Other risk factors in the report include everything from boilerplate:

 _We could be subject to economic, political, regulatory and other risks
arising from our international operations.

If we are unable to compete effectively, our business will be adversely
affected._

...to the real risks:

 _Changes in how network operators handle and charge for access to data that
travel across their networks could adversely impact our business._

 _If we are not able to manage our growth, our business could be adversely
affected._

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dreamux
I'm surprised that Netflix is still so tightly coupled to AWS, since companies
the size of Netflix can actually reap the economies of scale of running their
own infrastructure (AWS makes most sense for smaller operations). However, I
wouldn't be worried about AMZ sabotaging Netflix's service; it would do
massive and irreparable harm to AWS from a competitive and legal standpoint.

~~~
jwhitlark
You're right; Amazon wouldn't damage their rep as a cloud provider by playing
dirty tricks, even without the threat of legal action.

To your first point, Amazon knows as much about running massive scale systems
as anybody. I think Netflix would have a hard time capturing those economies
of scale.

The fact that Amazon's VOD works on Linux, is the most personally compelling
feature. I don't know how many other people are interested, but that's enough
for me to look closely at it.

