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Comment by wise0wl | Hacker News Reader

You really have to factor in the labor costs of infrastructure and operations into that as well. Running your own private "cloud" isn't cheap. And no matter what you do, you aren't going to get even close to feature parity with the public cloud offerings (or even speed, if you are using virtual-machines). There are a lot of trade offs that you have to weigh in that don't always come down to bare dollars and cents.

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Everything you'd have to pay for, Amazon or Google has to pay for for you... plus profit margin. At Netflix scale, it's almost impossible for someone else's cloud to be cheaper than running your own, and hiring the necessary staff and acquiring the necessary space and hardware to do so.

I honestly have to wonder if the level of Amazon's discount for Netflix is absurd to the tune of "we lose money doing this" just to retain them. AWS may need Netflix, to make serving it's smaller clients economically viable, more than Netflix needs AWS.

If you're a margin business then certainly. If you're not then there's a lot to be said for keeping your core competency lean and offloading the heavy lifting at a negotiated price.

This is assuming you can do everything at the same efficiency level as Amazon or Google. It's likely that you wouldn't be able to outperform on these metrics to a degree that it would make the profit margin difference a wash.

The exact point I am making is that at a certain point, you are able to do things as efficiently as they are. Netflix certainly qualifies at that scale.

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