Posts Tagged ‘Public Cloud’

Public Cloud is Better than On-Premise and Netflix vs Zynga proves it

November 30, 2014

There is a common myth that for super large scale companies it makes sense to build their own data center instead of using a public cloud.

In many cases I believe this is exactly the opposite. For many companies, time to market, focus and top line are more critical than a theoretical saving 20% on the cost.

The Killing , Wikipedia

Consider Netflix and Zynga. Both companies are large and smart enough to build their own private clouds.

Zynga chose to leave AWS and build their own cloud infrastructure. Netflix chose to stay on AWS, probably with a huge discount.

Their stock price might hint on which company made the right choice.

Netflix Vs Zynga

Netflix Vs Zynga

Netflix focused the company’s energy on moving from a tech company into  a movie production studio with shows like “House of Cards” , “Arrested Development”,”The Killing” and “Orange is the new Black”. Zynga was busy in becoming a data center company. Instead of focusing on social games and preparing for the next big change into Mobile.

The more generic point is that the bottleneck in most companies is a person.  More specifically, it is management attention. If everyone is busy in building a private cloud and purchasing 1000’s of servers, no one has time to create a new business line.

The thought is that a private cloud becomes attractive with huge scale because the number of devops people to write software  has an upper bound.

This might be true, but there are very few people in the world who have already done it, and hiring takes a lot of time.

The other option is to hire inexperienced people, at least on this scale, and they would make mistakes.

Companies like Netflix and Zynga are supposed to have 70-90% gross margin. Reducing cost of hardware from 20% to 15% is nice, but even that is not straight forward. And in any case, it is much less important than losing or creating a new $1B on the revenue side.

 

 

 

 

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An American-Israeli Sushi-Humus Grill-Bar

September 25, 2009

In my May post A Mexican, a Sicilian and a Greek Walk Into a Restaurant I discussed  how three different restaurants,in the same location, next to our start-up office, went out of business one after the other. Just after I posted it, a fourth restaurant opened in the same location with the brilliant name “Grey, an Israeli-American Bar- Diner”.

Guess what happened last week to the American-Israeli diner that served  sushi, Asian noodles, middle-eastern grilled meats, American burgers and breakfasts.

Restaurants,like start-ups, should  be very focused in their messaging and efforts. It is very hard to market excellence in five different areas.We had to decide whether  to deliver our cloud solution as a service (“Public Cloud”) or an on premise product (“Private Cloud”) . Both options were viable, and there were good arguments for each road. Despite the similarities and temptation it would have been a mistake to aim at both markets at very beginning.

Even “The Cheesecake factory” focuses on a single  item (with 40 variations 🙂 ) from its huge menu – when it comes to branding. Personally, this is also the only item I Like to eat there. And yes, I know the picture is from another Deli …

New York style Cheesecake with strawberries

New York style Cheesecake with strawberries