As Netflix Streaming declines, Netflix will save money with less AWS instances, but who cares?

Netflix will announce its Q3 results on Oct 24, and it is hard to say the numbers will look pretty.  Let alone what Q4 will look like.

Netflix to Announce Third-Quarter 2011 Financial Results

 

LOS GATOS, Calif., Oct. 4, 2011 /PRNewswire via COMTEX/ -- Netflix, Inc. NFLX -0.45% today announced it will post its third-quarter 2011 financial results and business outlook on its investor relations website at http://ir.netflix.com on Monday, October 24, 2011, at approximately 1:05 p.m. Pacific Time. At that time the company will issue a brief advisory release via newswire containing a link to the third-quarter 2011 financial results and letter to shareholders on its website.

Here is the one year stock performance.

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One good thing about Netflix using AWS for its streaming instead of data centers is they can scale to demand which usually implies scaling up.  But with Amazon, Apple, and Google all focusing on video it is hard to imagine Netflix's growth will continue at its past pace, and they may decline.  Which means Netflix can just turn off AWS instances and save money.  But, who cares?  Can you image Netflix in a keynote presentation,  we have reduced our streaming content by 15% over the last year and we have saved 15% in our data center costs by turning off 15% of our AWS instances.

My kids use Netflix streaming constantly, but I also have Amazon Prime and have 2 Amazon Kindle Fires on order.  We'll see how the kids like streaming to their Kindle Fire and whether Netflix shows up on the Kindle Fire.  The Amazon Prime users are just about as loyal if not more than the Netflix user base was.

Smarter Cities build your own data center or be in the cloud

Smarter Cities is a hot topic with IBM, CIsco, Schneider Electric and many other data center vendors targeting the growth.

A common approach is to leverage the cloud as Barron's writes.

Dawn of the Smart City

By LESLIE P. NORTON | MORE ARTICLES BY AUTHOR

The next generation will see a historic migration to urban areas around the world. So who's going to benefit?

Cities are experiencing one of the biggest booms since the Industrial Revolution got under way.

In 2008, the number of urban dwellers for the first time in history eclipsed the number living far from the madding crowd. The United Nations projects that by mid-century, cities will be home to 70% of the world's 9.2 billion inhabitants, a figure that tops today's population by 30%.

 

 

 

 

 

 

 

 

 

The Cloud is mentioned.

Like Siemens and ABB, most of the beneficiaries of urbanization will be infrastructure and technology outfits that provide or utilize smartphones, sensors and software and services to track the use of a city's assets and commit resources when and where they're needed. Cloud technology, which can cut costs while boosting computing capacity, will play a big role. Even social media will participate, as cities multiply the ways a citizen can spot a problem–anything from a water-main break to a traffic snarl–and then alert others to avoid it or do something about it.

Technology researchers at IDC estimate the size of the smart-city information-technology market is now $34 billion annually and will gain 18%-plus a year to $57 billion by 2014. That's not a huge amount to global giants, but certainly enough to help drive growth. (The companies don't break out earnings related to these projects.) The market has broadened to include items like broadband connectivity, green belts, renewable energy, green buildings and other intelligent-city systems. "You are talking about smart water, smart transportation, better public safety," says Jennifer Bélissent, a consultant at Forrester.

And, more details including a Microsoft Windows Azure case study are referenced.

Says Bob Djurdjevic of Annex Research, who follows big-cap tech stocks: "The cloud and smarter cities work hand-in-glove. The 'what' is the idea of the smarter city. The 'how' is the cloud, which provides the means for bringing it about."

Typically, a city funds big capital investments by issuing 15-20-year bonds, which require voter approval. But for many of these improvements the city doesn't need a public referendum or a bond sale; it can pay subscription fees for computer usage to a cloud provider like IBM or Microsoft. That saves major capital expenses for physical infrastructure upgrades and repairs, and keeps the investment as an operational expense. Cities can start small and scale up as usage rises.

Miami built a 311 service, which lets city dwellers call in for information or report a problem, on Microsoft's Windows Azure cloud platform. The service, which tracks progress on the issue from the time it was reported until it's been solved, produced a 75% savings on projected first-year costs because Miami didn't need to buy, host and manage physical servers. When Hurricane Irene churned up the coast in August, the city was able to add a special site on its platform to handle reports about the deadly storm. Says Eric Basha of Microsoft: "The cloud is transforming how government delivers services, driving down costs and time to market." That also provides opportunities for any vendor with cloud-related products, including Accenture (ACN), Hewlett-Packard (HPQ) andOracle (ORCL).

But, another view that will not get as much press is building data centers in cities to support the new services and a low latency work environment is just as valuable as the cloud.  Look at the large US cities and their data centers - NYC, Atlanta, Chicago, Dallas, LA, SF/SJ, Seattle, Denver, and Phoenix.  They all have large data centers.  Cities not thinking about the data center infrastructure they need to build out are going to be sorry they put their solution in the cloud without a clear migration strategy into local data center assets.

 

Amazon Silk Browser, technical explanation and where the Amazon Silk name came from

Watch this video to get an explanation of how Amazon Silk has been designed to leverage Amazon's Cloud.

And, where does the Silk name come from?

A thread of silk is an invisible yet incredibly strong connection between two different things.  In our case it is the connection between your kindle fire and Amazon Compute Cloud.

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Here is the consumer explanation of Silk.

Amazon Silk

What is Amazon Silk?

Amazon Silk is a new kind of web browser, built from the ground up to leverage the power and capabilities of the Amazon Web Services (AWS) cloud to fundamentally rethink the level of performance and functionality that a browser can provide.

Do people really need another browser?

Browser development has really accelerated in recent years, with new entrants emerging and big upgrades from legacy browsers.  If we only thought we could deliver “another” browser, we wouldn’t have bothered.  In the case of Amazon Silk, however, we are very excited about the potential for this “cloud-powered” browser to truly delight our customers.

How does “the cloud” make this browser faster?

With Amazon Silk, most of the heavy-lifting is shifted from the processor on your device to our powerful AWS servers.  Access to such lightning fast CPUs, expansive memory, and huge network connections allows the performance of Amazon Silk to transcend the capabilities of your local device.  Amazon Silk isn’t just about massive computing power, however.  Because much of the intelligence of the browser is in the cloud, a number of performance enhancements become possible, including squeezing the utmost throughput out of your “last mile” connection, smart caching both on your device and on our servers, and on-the-fly content optimizations.  In addition, Amazon Silk has the ability to learn about traffic patterns on individual sites over time, allowing it to begin fetching the next page that users may wish to visit.

Software in Data Centers is Eating the World

Mark Andreesen of Netscape fame has an essay in the WSJ.

Why Software Is Eating The World

By MARC ANDREESSEN

This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I've observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.

In short, software is eating the world.

Mark argues that software is dominating industries

The best new movie production company in many decades, Pixar, was a software company. Disney—Disney!—had to buy Pixar, a software company, to remain relevant in animated movies.

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Photography, of course, was eaten by software long ago. It's virtually impossible to buy a mobile phone that doesn't include a software-powered camera, and photos are uploaded automatically to the Internet for permanent archiving and global sharing. Companies like Shutterfly, Snapfish and Flickr have stepped into Kodak's place.

Today's largest direct marketing platform is a software company—Google. Now it's been joined by Groupon, Living Social, Foursquare and others, which are using software to eat the retail marketing industry. Groupon generated over $700 million in revenue in 2010, after being in business for only two years.

Today's fastest growing telecom company is Skype, a software company that was just bought by Microsoft for $8.5 billion. CenturyLink, the third largest telecom company in the U.S., with a $20 billion market cap, had 15 million access lines at the end of June 30—declining at an annual rate of about 7%. Excluding the revenue from its Qwest acquisition, CenturyLink's revenue from these legacy services declined by more than 11%. Meanwhile, the two biggest telecom companies, AT&T and Verizon, have survived by transforming themselves into software companies, partnering with Apple and other smartphone makers.

All of this software goes into data centers, and to grow faster they need to be greener data centers using less energy and reducing the environmental impact.