How the Amazon Grinch stole Netflix’s Christmas

grinchIn what has to be one of the better twists of this Holiday Season, Netflix went down on Christmas Eve, thanks to an outage on its chief competitor’s service, Amazon AWS. Amazon Prime Instant Video, the head-on competitor to Netflix runs on the very same AWS service  and was unaffected by the outage. Ironically, the service black eye Netflix gets is because of Amazon but most people won’t realize they were behind the outage.

This brings up an excellent problem that Netflix and anyone else competing with Amazon faces…there are very few services large enough to take the business of serving massive amounts of streaming content. Amazon isn’t the only choice. There are companies like HP and RackSpace but the list gets very thin after that.

And it doesn’t help that Netflix is managing about one third of all traffic in the US, making them Amazon’s single largest customer and competitor at the very same time. In a perverse way, Amazon needs Netflix and Netflix needs Amazon.

But we can’t beat Amazon up too much for having this power over the marketplace. They invented the marketplace for elastic, inexpensive cloud. Google and Microsoft play in a similar market but have chosen to take a higher road, offering Platform as a Service (PaaS) which offers much more than cloud management services. Amazon sits mostly alone in an enormous space.

On a side note, I watched the cartoon version of How the Grinch Stole Christmas for the first time this Christmas Morning. My impression? He was way too mean to Max. Whoville…they could take care of themselves…but that poor dog…

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