Case in point: If you
are Netflix subscriber—and I am—chances are you may had problems streaming
movies via the Internet on Christmas.
Why? Because some I.T. executive decided
it was a good idea to have ~95% of their services delivered through the cloud
service, Amazon Web Services (AWS). TheWall St. Journal reports that this was because the cloud services for Netflix are out of a
single data center. Say what??? To be fair, Netflix was not the only AWS
client that was affected. Amazingly
though, Amazon’s competing web streaming service was not affected during the
same period. Coincidence? You be the judge.
Now far be it from me
to suggest that AWS would sabotage a competitor. That never happens in the cut-throat world of
I.T. with slim profit margins and where service snafus affect market share. And I
would never suggest that contracting delivery of an overwhelming percentage of your
services through a single vendor—never mind a direct competitor—would fall into
the “bonehead move” category. More
important folks have been fired for less.
But given the flak Netflix received
earlier in the year—recall: splitting the DVD mail service (Qwikster) from the
streaming service—one would think that this is not the
type of mismanagement publicity it would want.
Part of the balance of minimizing risk is diversifying your
portfolio—or in the case of I.T., planning for the inevitable and certainly not
having effectively all of your services delivered through a competitor. All that said, I like Netflix’ current delivery
model, but I’m bracing for what happens when competitors with deeper pockets
decide to step in. Say, Google (or some
other tech company sitting on a cash hoard) buying Blockbuster and begins
streaming in earnest at a more competitive price point. Apple already streams films via iTunes, but
it hasn’t quite penetrated the way Netflix has.
Netflix has an app on effectively every “Smart” TV on the market,
streaming device (e.g., Roku), and on Apple’s
own Apple TV product.
Rumors of Apple’s entry into the smart TV market continue to
swirl, so it’s just a matter of time before Netflix becomes the next Sony—a
technology giant that becomes an also-ran overnight. Anybody remember Betamax or the Walkman™? Both have gone the way of the do-do bird
thanks to DVD and the Apple iPod family, respectively. Sony has effectively fallen and can’t get up
as its proprietary technology was not supported by the music or movie
industries and it now innovates in nothing.
As long as Netflix depends substantially upon its competitor, it’s only
a matter of time before it becomes a dinosaur as well.
Enjoy Netflix while you can still get it, streaming
fans. Something better should be just
around the proverbial corner.
‘Nough said,
+THINKER