Netflix shows how to build a big business on the cloud

Most cloud projects are still limited to pilots or cloudbursting

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Most of the attention Blockbuster-slayer Netflix has gotten recently has been about its conflict with Comcast, which has become the poster child for Grinchlike bandwidth rationing and secretive throttling of all the good stuff customers wanted when Comcast reps gave them the hard sell on high-capacity connections.

At least as interesting is how Netflix, whose subscriber base has increased 270 percent between January 2007, when it introduced its media-streaming service and the end of September 2010.

That kind of growth would be hard on the logistics and IT operations of any company, especially with 17 million small customers rather than one big customer who pays a cost equivalent to 17 million monthly subscriptions. (In which case it wouldn't need a database with 17 million records, but would have to make each database field would be really, really big.)

How'd Netflix scale that quickly without breaking the bank? (Scale on the IT side, I mean. Logistics only involves the real world, not technology, so who cares.)

Same way everyone else does; hired help. Sorry -- Partnerships and outsourcing.

Its most important partnership for the streaming service, though also its newest one, is with Level 3, a content-distribution-network provider that shifts Netflix content onto its own servers in data centers around the world. Physical proximity and high-capacity backbone links allow Level3 to get content to customers a lot faster than Netflix could by itself, at least until the content hits the Last Mile Tollbooth and has to wake up the Comcast guy to let part of it through.

Much earlier, and to a much more significant degree, it started offloading a lot of its Web-site and search-engine traffic, streaming servers, data storage, caching, databases and applications not in its own data center, but onto Amazon's Web Services (AWS)

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