Is Netflix depending too heavily on Amazon?
That’s one of the questions raised by a cover story about Netflix in the new issue of Bloomberg BusinessWeek magazine. The piece by Ashlee Vance focuses on Netflix’s recovery but also includes the back story on Netflix’s decision to go with Amazon Web Services for cloud computing rather than build its own data centers.
It has tuned out to be a thorny move given the competition between Amazon and Netflix in video streaming. From the story, here’s how Netflix CEO Reed Hastings made the decision.
Netflix began to experiment with cloud services from Amazon and Microsoft, where Hastings served as a board member. In 2009 he bet his company’s future on Amazon. Up to that point, nothing the size of Netflix had placed so much of its crucial technology on Amazon’s systems. Hastings sent an e-mail to Amazon CEO Jeff Bezos, announcing his plans. “I asked him if he was comfortable with that idea,” Hastings says. “If not, there was no point going forward.” Bezos gave the go-ahead.
Paul Maritz, the former VMware CEO and longtime senior Microsoft executive, tells the magazine: “The problem with Netflix is that they are inextricably bound into Amazon for all eternity … If they want to go somewhere else, it will be hard.”
Read the full piece here.