A lot of folks talk about public clouds not being economically justifiable when volumes are high enough to support building your own infrastructure. This is due to the perception that consistent use can make public cloud use expensive.

Just as I was about to write a blog and predict that Netflix would move from Amazon to building their own data centers for cost optimization, I saw a presentation from Adrian Cockcroft, Cloud Architect at Netflix, on slideshare that threw me off. In summary, Adrian says that Netflix is moving from its own datacenter to Amazon and it is the most optimal solution for Netflix.

Randy Bias did an interview with Adrian that compared Netflix’s strategy to Google‘s philosophy. However, Google chooses to run its own datacenters while Netflix wants to be “a small-ish fish in a big AWS pond rather than building their own pond”, according to Adrian.

Netflix could grow so much that it may not be a small fish anymore., so this statement does not entirely throw cold water on the generally accepted view that building your own cloud is sometimes better based on size. Perhaps Netflix could become as large as Facebook – and that will prompt them to build their own infrastructure. On the other hand, Amazon may start an offering to build and support a cloud for their very largest customers. Given the run-up of Netflix stock prices recently, investors are betting that Netflix is on a steep growth curve.

The bigger story here is whether enterprises will leverage best practices from Netflix to use the public cloud for their solutions despite compliance, security and skill challenges. These challenges can be overcome if enterprises are able to change their thinking to build new cloud architectures rather than rely on traditional data center architectures.

The interesting aspect of Netflix was that the solution used Oracle running on IBM hardware. The challenge is for traditional enterprise IT players to provide a value proposition that will discourage defection from a datacenter powered by HP/IBM/Sun(Oracle) to Amazon. Even at a small scale, that will challenge the growth of traditional players looking to grow with cloud solutions. Without an outstanding value proposition from good references like Netflix, Amazon could indeed be building an insurmountable lead over these players.