Focusing on the distinctive ...

Links to a story in yesterday's NYT are popping up around the place. Called Companies Slowly Join Cloud-Computing, it looks at recent moves by companies to source computing capacity in the cloud. There is some emphasis on Amazon's services, but others are also discussed.

The thing which has jumped out at many people though is the note about Netflix, a major network based company:

This year, Netflix made what looked like a peculiar choice: the DVD-by-mail company decided that over the next two years, it would move most of its Web technology -- customer movie queues, search tools and the like -- over to the computer servers of one of its chief rivals, Amazon.com.

The rationale was interesting:

Kevin McEntee, Netflix's vice president of engineering, said Netflix switched in order to "focus our innovation around finding movies, rather than building larger and larger data centers."
As for tethering Netflix's future to a rival, Mr. McEntee said, "It's in their interest to make us successful in the cloud. That's why we felt comfortable."

So, while the general cloud technology aspect of this is interesting, it feels less interesting than the motivating business dynamic behind Netflix's decision. This is about focusing resources and attention on where it is going to make a distinctive impact, and not consume those resources and attention on doing something that can better be externalized to another provider.

Of course, it will be interesting to see how the arrangement progresses and if Netflix are happy with their decision.

This seems like a significant marker in the general trend towards network enabled externalization to specialist providers.

I post it here, as I have observed that 'sourcing and scaling' is one of the major questions facing libraries in coming years: what should be externalized and at what level should it be done.


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