Netflix Finally Transitioned to the Cloud: And That's Huge for Amazon

The more important question than who this helps is who this hurts. And the networks, the various other types of content providers and Google all come to mind. JL

Max Slater-Robins reports in Slate and Barb Darrow reports in Fortune:

Netflix no longer uses its own data centers to host its video service and will now use Amazon Web Services. Netflix accounts for about 40 percent of total Internet bandwidth at peak times, ahead of YouTube, which accounts for 15 percent, and Facebook, which accounts for 2.7 percent.

Slate: Netflix has completed its move to the cloud. The process, which started seven years ago, means Netflix no longer uses its own data centers to host its video service and will now use Amazon Web Services, which is run by Amazon. The company will also use some Google services for its archives.Netflix accounts for about 40 percent of total Internet bandwidth at peak times, ahead of YouTube, which accounts for 15 percent, and Facebook, which accounts for 2.7 percent. "We rely on the cloud for all of our scalable computing and storage needs—our business logic, distributed databases and big data processing/analytics, recommendations, transcoding, and hundreds of other functions that make up the Netflix application," a Netflix blog post reads.

The company's DVD business will still use Netflix's own data centers. The company has about 4.5 million subscribers to its DVD service, down from 13 million in 2011. Microsoft and Amazon are engaged in a "street battle" over the services market, which brought in about $6.3 billion for Microsoft last quarter and $2 billion for Amazon last year.

Fortune: Public cloud providers, like Amazon, amass a ton of computer servers, storage, and networking at data centers around the world, and sell or lease out those resources to customers on an as-needed basis. Many companies look to these providers to augment or even replace their own data centers. Netflix is in the latter camp.
The basic premise is that cloud providers can do a better job of running a huge number of servers and storage boxes efficiently at multiple data centers, than a media company—or almost any other kind company, actually.
By offloading basic computing and storage, Netflix has been able to better focus on its core business—delivering video fast and efficiently to customers around the world. As of January, it serves 130 countries.
Along the way, Netflix engineers also came up with innovative ways to augment AWS capabilities, which they then made available for anyone else to use.