Netflix guts data center in shift to cloud

Company's cloud move creates opportunity for SaaS providers

The idea that public cloud-based services will radically transform in-house IT operations is ever more evident at Netflix.

Netflix no longer wants to run a data center in support of its in-house corporate IT services. It is shifting internal applications to Amazon's cloud, as well as using software-as-a-service (SaaS) providers for business services.

Mike Kail, vice president of IT operations at Netflix, said he wants to move as much as 95% of Netflix's corporate IT services, now run in an in-house data center, to the cloud, but the goal is 100%, he said.

These corporate IT operations are separate from the Netflix streaming service, which operates from Amazon's cloud.

The intent is to focus IT operations on providing services to the business, and not managing hardware, said Kail. "Part of my charter is to reduce my data center footprint as much as possible," he said.

If Kail doesn't eliminate the need for a data center all together, at worse he estimates that he may be left with two racks running about 50 virtual servers -- something small enough to fit in a closet, and not the corporate IT data center he now runs with about 2,500 virtual servers.

Kail, who has been with Netflix for a year-and-half, has been working for the last year to move to a cloud-based infrastructure, a project he hopes to complete in a year to 18 months. To accomplish that, Netflix has been turning to SaaS vendors such as Workday, storage provider Box and now Sumo Logic, as well as rolling out its own Amazon instances of its internal IT applications.

Netflix's IT direction is particularly good news for Sumo Logic, a log management and analytics start-up, which is using Amazon's cloud. This two year old company announced Tuesday that Netflix is a customer.

Kail says this decision to migrate services to the cloud is about concentrating on what's important to the business, and by using public cloud services and SaaS providers he will no longer have to worry about hardware refreshes, operating system patches and paying for power and space. "[These are] time consuming tasks that don't really add value," he said.

"I worry about processing and analyzing the data and providing great services versus all the other extra-curricular activities," said Kail, referring to hardware and data center maintenance matters.

Cloud-based infrastructure services such as Amazon's have given a lift to a variety of start-ups. Sumo Logic, which has 60 employees and is based in Mountain View, Calif., launched its services early this year, and says it benefits from Amazon's ability to rapidly scale up with demand.

Vance Loiselle, CEO of Sumo Logic, said his company gathers terabytes worth of data from collectors, or agents, that are either located in-house data centers or in virtual cloud environments. The log data is compressed and encrypted and then analyzed.

Amazon has a few partial outages over time, but Loiselle said they have avoided problems because their company runs in four Amazon availability zones and triple-replicates data.

Loiselle says his firm has developed technologies to help users understand better what the log data is actually saying, and includes something they call LogReduce that shifts through the "noise," looks for patterns and identifies trends and issues and creates logical groups to allow users "to very quickly get to the root cause on issues."

Kail said he had been using a variety of tools, including some open source, to evaluate logs, but he liked Sumo Logic's approach and its willingness to work as a "partner." Being cloud-based was critical as well, he said.

The move to cloud services and away from an in-house data center isn't changing the types of skills that Kail says he needs to run his data center.

"Unless you are a person that likes racking gear, you are still managing the same technology and services," said Kail. They also need to understand the TCP/IP stack and operating systems. "All the same skills still apply," he said.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is

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Copyright © 2012 IDG Communications, Inc.

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