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4 principles that will shape the future of IT

Bernard Golden | March 7, 2016
It’s a software-driven, open source world, and we’re just living in it.

The open source trend means more than incumbent vendor financial pain. It means that the ongoing industrial restructuring I described in the previous section of this piece will be achieved via the use of open source, which brings us to my third tenet. 

3. No enterprise is Netflix … or ever will be 

Netflix is an awesome company. Given how early and effectively it dismantled the video rental company Blockbuster, we should perhaps speak of the “Netflixization of an industry” rather than give that epithet to Uber. And it hasn’t rested on its laurels, either. It no sooner became top dog in the rental industry than it shifted to video streaming, where it appears about ready to upend the existing studio/carrier ecosystem

At its heart, Netflix is a technology company. And it’s awesome there as well. Early in its streaming journey, Netflix concluded that operating data centers is not its forte; moreover, given its uncertain growth and erratic viewer patterns, trying to manage infrastructure would be an intractable headache. So it turned to Amazon Web Services, and used it as the basis for its widely-used streaming service (so widely used, in fact, that Netflix streaming accounts for 37 percent of all North American evening Internet traffic). 

Instead of managing infrastructure, Netflix focused on building out its streaming application capability. And it built far more than just application functionality. Netflix created supporting functionality appropriate to deploying and monitoring vast numbers of AWS resources in an environment that often experiences failure. It built orchestration tooling to allow application components to continuously join and leave the resource pool. It built complementary tools to perform destructive testing to better ensure resiliency. 

In other words, Netflix designed an incredibly sophisticated software environment tuned for its needs, and invested heavily to implement it. And it did all this with open source, much of which it created and then released to the larger world to allow others to use Netflix tools.

The company is often held up as an example to be emulated. One analyst firm told me they have an unending stream of enterprise IT clients querying it to find out how they can operate and execute like Netflix. 

Here’s the thing, though. Netflix is sui generis, and has capabilities far beyond the average or even top-notch enterprise IT organization. Netflix focuses on its IT capabilities as a core competence and invests as much as is needed, facilitated by its software-like margins. It also attracts some of the best talent in the industry, drawn by the challenge of working on the Netflix technology, and a set of HR principles unique unto Netflix. Oh, and it pays really well, and offers options in its high-flying stock

 

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