A Hidden Risk for Amazon's Cloud Business
Public cloud platforms like Amazon's (NASDAQ: AMZN) AWS have truly changed the game for start-ups. Instead of having little choice but to own and operate their own servers, the cloud makes it easy to spin up resources quickly and on demand. A sudden surge in usage can cripple a physical server, and scaling involves upgrading hardware or setting up additional servers. In the cloud, resources can be scaled up seamlessly to handle any amount of traffic.
This convenience and scalability come at a cost. Cloud computing is not cheap. The price is often worth paying for companies that are scaling rapidly or subject to extreme spikes in usage. It makes perfect sense for Netflix to run entirely on AWS, since usage can spike during peak viewing hours or when a new season of a hit show is released. Netflix wouldn't have been able to grow as quickly or invest as much in content if it was busy frantically scaling up its own infrastructure.
There are plenty of companies that never made the jump to the cloud, but there aren't too many that were born in the cloud and then made the jump to operating their own servers. Any kind of migration is an ordeal, and running your own hardware requires hiring people to manage that hardware.
Source Fool.com
