
Ask HN: Why Netflix still using AWS when Amazon is their biggest competitor? - horizontech-dev
I have been wondering about this question for some time. To give context, I get it, the engineers and management at Netflix continuously evaluating (and it&#x27;s not an easy task), but what&#x27;s something holding them moving off of AWS like Dropbox?<p>Aren&#x27;t they literally giving money to their competitor?
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0xy
A lot of Netflix's technical "secret sauce" is their own infrastructure via
the Open Connect initiative.

You cannot get a silky smooth experience across that many congested networks
with just bare AWS.

Why would Netflix want to take on the enormous risks of self-hosting? They
don't have the experience and they don't have the skills. They can hire the
appropriate people but it's extremely expensive. AWS provides a lot of very
valuable tooling and expertise baked into the service price.

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treyfitty
No one will know, and those that do will never reveal it. But I can surmise
that it's a mutually net beneficial arrangement in the short-run, with Netflix
expecting a better solution to present itself either internally or externally
at some point. Otherwise, you're right, Netflix wouldn't use AWS and AWS would
not supply to Netflix.

In a way, they're allocating money and resources to Amazon rather than
developing internally simply because the long-term ROI doesn't warrant it.

And let's not discount the most obvious reason why it's probably not even a
concern for Netflix: Amazon Prime Video sucks. Sure, Blockbuster probably said
the same thing about Netflix at one point, but it's hindsight. I think most
people, at the time, would have never guessed Netflix would be the one to
pivot to online streaming either.

It's a very though provoking question and there's no way to distill it into
one answer, so I'm just providing my POV.

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horizontech-dev
> rather than developing internally simply because the long-term ROI doesn't
> warrant it

To clarify, I am not expecting them to build their own cloud, but why they
using it when other providers have caught up pretty much.

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the_hoser
You're really looking at this from the wrong direction. Your competitor
doesn't need to fail in order for your own business to succeed. It isn't a
zero-sum game.

It wouldn't surprise me if Netflix had that meeting at some point. What would
it cost them to run their own infrastructure? Would that be less than the cost
of staying with AWS? Is Amazon exploiting their position as Netflix's hosting
provider to unfairly compete with them? Do they fear that they might in the
future?

At the end of the day, the answer was very likely a solid "no". Many
industries are full of examples of competitors working together to the benefit
of both companies. Just look at the aerospace industry.

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horizontech-dev
Thanks for the response. But totally disagree.

> Would that be less than the cost of staying with AWS? I think the answer is
> Yes. The main advantage of Cloud computing I think is the speed to market,
> not the cost. Excerpt from [https://techcrunch.com/2019/06/21/three-years-
> after-moving-o...](https://techcrunch.com/2019/06/21/three-years-after-
> moving-off-aws-dropbox-infrastructure-continues-to-evolve/) "Dropbox still
> believes it made the right decision and has found innovative ways to keep
> costs down"

> Is Amazon exploiting their position as Netflix's hosting provider to
> unfairly compete with them? I completely disagree. Here is one example
> (Certainly, a simple G search should give enough examples)
> [https://www.wsj.com/articles/amazon-scooped-up-data-from-
> its...](https://www.wsj.com/articles/amazon-scooped-up-data-from-its-own-
> sellers-to-launch-competing-products-11587650015)

~~~
bengunnink
The answer to your question is "Because it makes business sense to do so".
Whether you can understand their reasons or not, the best indicator that
Netflix has good reasons to use AWS is that it continues to do so. And that
will be true until the (possible) day that it doesn't anymore.

> I think the answer is Yes.

So what you're saying is that (1) Netflix is already secretly planning to move
away from AWS, in which case your question is moot, or (2) everyone involved
in platform decisions at Netflix is an idiot that can't do math.

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tobyhede
I would expect Netflix to have reasonably detailed strategic analysis and
projections of all of the available options - moving to Google, moving to
Azure, moving to Oracle, moving to multi-cloud, colocation, not to mention
things we can't even imagine because ... well, we have no real idea.

At different points any one of these may make strategic sense, but as others
have highlighted here such moves would consume resources that could be
allocated to other areas.

My take would be that increasingly the Netflix business model is really
content and production. Disney is the real competitor here. Technology is
necessary, but not sufficient.

~~~
horizontech-dev
> I would expect Netflix to have reasonably detailed strategic analysis and
> projections of all of the available options - moving to Google, moving to
> Azure, moving to Oracle, moving to multi-cloud, colocation, not to mention
> things we can't even imagine because ... well, we have no real idea.

I think the same too. Curious to confirm the thought process and curious to
hear if there any anecdotes

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tobyhede
Also ... Dropbox is a good example of a product that has lost it's way. It
went from a very simple and clear product with strong value to something we
all now work around. Its more reliable to email or slack files than deal with
whatever confusing thing Dropbox is doing.

~~~
horizontech-dev
And you think that's because they moved off of AWS?

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tobyhede
I am observing that there is no correlation between location of hosting and
quality or user experience. OP used DropBox as a reference for a company that
moved off AWS. My observation is that DropBox sucks.

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some_furry
Amazon Web Services (AWS) and Amazon Prime, while part of the same company,
are vastly different services.

While it's fair to call them competitors, it's not really an apples-to-apples
comparison.

~~~
surround
AWS and Amazon e-commerce are vastly different services, yet Walmart refuses
to use AWS because Amazon is also their largest competitor. In fact, Walmart
built themselves an entire private cloud to avoid using AWS.

So OP actually raises a very good question: why does Netflix use AWS when
Walmart does not?

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JMTQp8lwXL
The decision to build a private cloud sets back other priorities, like
competing with Amazon on Grocery. It may, or may not, pay off for Walmart. If
Walmart did store their data in Amazon's cloud, it is possible Amazon could
use that information (sales, prices, etc) to more efficiently compete.

Conversely, if Netflix built out their own cloud, it could have come at the
expense of delivering more content, which could risk unseat their position as
the leader of streaming space.

~~~
horizontech-dev
Great points. I understand that it comes with an expense, but "I think" in the
long run it would benefit them.

> Conversely, if Netflix built out their own cloud Well, they don't have to
> build their own cloud. They can use other cloud providers still.

