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Comment by discodave | Hacker News Reader

I don't understand why people think that companies can get special pricing from AWS but not drive feature development. Large customers like Netflix, GE & friends get to drive feature development. Heck, if you're the CIA and give AWS $600 MM they will build a private region for you!

This post has two contradictory quotes in my opinion:

"It’s worth noting that this AWS price wouldn’t be what Facebook paid in this hypothetical situation. Much like Snapchat and Netflix, Facebook would be a heavy and influential user"

"Facebook’s years of specialization for running Facebook are in contrast to AWS, whose storage is designed for multi-purpose (albeit-heavy) use." - Amazon already has several tiers of storage (S3, S3 - Infrequent Access, Glacier, CloudFront)... who is to say that they wouldn't be motivated to introduce more classes by a large customer like FB.

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Sidenote: It's remarkable that Amazon happily provides server services to Netflix, who is a huge competitor!

It's not remarkable its Bezos' business strategy.

The way he thinks about things is it's not a threat to his business to have competitors in his space not just because he is prepared to undercut them on cost but because he knows that his true focus is on customer satisfaction. And competition, whether through providing customers with a choice or encouraging his own systems to provide better services is good for his business.

But in this case it's really just because Netflix is too insignificant to matter to Amazon overall. It's just a tiny fraction of their revenue and what they're trying to do.

And if you want to be Machiavellian of course it's good because then Amazon has leverage of Netflix.

Seriously how would it look if Amazon turned down a company because they were competing? It would be an admission of defeat and weakness for AZ. That's not how an "apex predator" thinks.

Keep your friends close, and your competitors....

Keep your friends close, and your competitors hosted

I love that, seriously. Machiavelli's Guide to PaaS.

> Seriously how would it look if Amazon turned down a company because they were competing? It would be an admission of defeat and weakness for AZ. That's not how an "apex predator" thinks.

It looked shitty when it happened with Amazon and Apple

Could you elaborate on what happened? I don't know about this.

I think it's referring to them removing the AppleTV from amazon.com as well as not supporting playback of Amazon Video on the AppleTV https://www.wired.com/2015/10/amazon-apple-tv-chromecast/

The latter decision has been reversed now though https://techcrunch.com/2017/06/05/amazons-prime-video-app-is...

Also, it isn't really Apple's fault for not building an Amazon video app, is it? I mean, it's not like they denied them access to the App Store.

I found this to be really stupid behavior of Amazon. Seemed like they only wanted to push their competing product (Fire TV).

It's good they figured things out, though. A Prime Video app was announced at WWDC.

> Seriously how would it look if Amazon turned down a company because they were competing?

It would look bad: https://www.wired.com/2015/10/amazon-apple-tv-chromecast/

Hmm, sounds like it's the new "embrace, extend, extinguish".

That's ascribing emotions to a situation where they don't really matter.

Amazon's selling. Netflix is buying. It'd be stupid to refuse the money. Netflix wouldn't lose much sleep over it–at their size, building their own infrastructure can't be much worse than renting.

Plus you'd get the idea out there that Amazon isn't the sort of reliable utility company their marketing suggests. They have their fingers in so many markets, a third of their customers would start to fear being cut off.

AWS is also a separate division within Amazon, and probably not lacking self-confidence. The people are judged by the numbers of AWS, and they'd probably resist attempts to get them to forgo revenue just for the sake of some other division's feeling.

I can see their thought process—

"Netflix will most likely exist even if we don't provide them server services as there exist other cloud providers and / or Netflix is big enough to roll their own, so we might as well have a piece of our competitor's success by having their infra spend come to us."

Netflix absolutely should roll their own system. At the very least as a meta layer on top of the major cloud providers.

We have, and we open sourced it :)

https://www.spinnaker.io/

Here is a blog post (2010) describing the decision to move out of our own data centers:

https://medium.com/netflix-techblog/four-reasons-we-choose-a...

To me, the most important part of Netflix isn't the encoding or compute parts, ( AWS ), but the delivery. And all of their delivery, networks are already done by themselves through Open Connect and OP Server.

So they already have their own system. As as some below have mentioned, they could simply move to Azure if they wanted without much trouble.

So Netflix now needs to hire and manage a huge infrastructure team that they don't have today. (Not to say they don't have ops folks but the incremental need would be enormous.)

That's not to say it might not be a worthwhile approach over the long run but it would be a huge strategic investment in something that has essentially nothing to do with what they view as their core differentiating service to customers.

Would Netflix have done things differently if they had known they'd reach this level of usage? Perhaps. But disentangling now would be very difficult and almost certainly disruptive--including a likely reduction in quality of service.

Their infrastructure team + infrastructure would be cheaper then their Amazon spend, guaranteed (based on known Amazon margins).

And disentangling be disruptive? Stand up your new datacenter and shift your apps over with DNS when they're ready to serve production traffic. If you can move traffic between regions, you can move it between on prem and cloud.

You assume that Netflix pays retail price.

I don't. I assume a deep discount because Amazon uses them as a shining case study, despite only their control plane/front end hosted with AWS.

I'm pretty sure they do a lot of their own stuff, AFAIK, they run their own CDN, and then use AWS for everything else.

Why do you think they don't?

Whats more remarkable is Netflix uses them! If I was Netflix I would not fund a competitor unless it was truly best most cost effective option by a significant margin. Amazon's margin isn't in retail, its in infrastructure.

A lot of big companies that compete with Amazon in some vertical have a no-Amazon policy for infrastructure. Some even require their business associates (vendors, etc) commit to contracts to do the same.

I work at a company that sells ebooks and directly competes with Amazon in that space. All of our infrastructure is on AWS. We could move elsewhere easily if we had to, but we probably won't. A good friend who works over at AWS said that they were "more than happy to have [our] business". In terms of net revenue it's probably way in their favor.

It's certainly good PR for Amazon to treat even serious competitors fair on AWS.

Amazon seems to want to be in every business sector there is, so almost any company could end up competing with them.

Making money from your competitors is a good thing. It also ensures their margin is worse than yours everything else equal.

If Amazon didn't host Netflix, Netflix would have been hosted on a competitor's platform. Nothing would have changed about Netflix and Amazon, plus many others, competing in the production and delivery of entertainment content.

Serious question: Would it be legal for them not to?

IANAL but I don't see a judge deciding that AWS doesn't have a million competitors in every dedicated server host or collocation datacenter, even when AWS was the only cloud infrastructure provider. As long as antitrust laws don't apply, freedom of association is pretty unassailable.

See the recent Walmart / Amazon kerfuffle it's like employee non-competes to me http://fortune.com/2017/06/21/walmart-amazon-whole-foods/?__...

Yes, they don't have a monopoly or even close to one in VMs.

Or video streaming.

ianal but I was under the impression that in the US you need to provide equal service to any customer, or else be ready to tread very carefully to avoid legal consequences. This doesn't mean you have to give a competitor special pricing, but I think it does mean you have to sell them your catalog listed products and services at list price, or else be prepared to head to court eventually.

Where did this impression come from? I thought basically the opposite was true: that you could do business with whomever you want, as long as you're not discriminating against a protected class of people.

Therese aren't so much contradictions as indicators the reasonable answer to the question posed is really a simple 'No'. The only sane way it becomes yes is 'Yes it's possible if Facebook rewrote a bunch of Facebook AND Amazon rewrote a bunch of AWS'. That kind of possible isn't very interesting, though. It's surely possible to host Facebook on AWS if Amazon built an exact replica of each FB data center, trucked FB's servers over and then called the result part of AWS.

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