Last week, Netflix announced plans to shut down the last of its data centers by the end of the summer and to move all of its information technology to the public cloud. The move makes Netflix one of the first big companies to do so.
“For our streaming business, we have been 100% cloud-based for customer facing systems for some time now, and are planning to completely retire our data centers later this summer,” the company said.
Large company challenges
According to a recent survey by BetterCloud, about 12% of companies run IT operations entirely in the public cloud. But nearly all of those companies are small or medium-sized. Few large corporations have migrated completely.
“A 100% cloud operation is going to be extremely rare for big established companies,” Glenn O’Donnell, vice president and research director at Forrester Research, told The Journal.
Instead, larger companies tend to utilize public clouds for some data, but retain sensitive software and data in private clouds within their own premises and contained within their own firewalls. A January 2015 State of the Cloud Survey by RightScale found that hybrid cloud arrangements remain the preferred strategy, with 82% of enterprises reporting they had a hybrid cloud strategy.
Public cloud gaining ground?
But Netflix’s move to the public cloud may signal a shift towards more companies making the same move. Experts say use of the public cloud is rising. By 2022, according to the BetterCloud survey, more than 20% of large enterprise companies are expected to operate entirely in the cloud.
There are several reasons for businesses to consider moving entirely to public clouds. For one thing, private clouds may actually be less secure and reliable than their public counterparts. Public cloud companies tend to attract the best IT and security people available, and they pay those experts top dollar. The average company can’t do that, and because data security likely isn’t the main focus of their business, why would they?
Private clouds also tend to rely on older technology. While public cloud companies can justify having the most up-to-date technology and security available, the average company simply can’t afford to keep up with the pace of change.
And while a private cloud requires the organization to build and maintain servers to meet spikes in demand, with public cloud, companies can simply pay as they go — and usually for a very good price given the greater economies of scale that cloud companies can offer.
Finally, it’s unlikely public clouds will ever run out of space, while the potential of that happening in a private cloud is much higher.
Where's my data?
Of course there are also potential downsides of moving entirely to the public cloud.
Some public cloud providers reserve the right to shift data around from one region to another without notifying customers, which could cause legal issues. For some organizations — such as banks — the regulations and legalities involved are just too strict to allow them to move entirely to the public cloud, at least for now.
Overall, the use of public cloud will likely continue to grow among businesses over the next several years, with some large companies even potentially following Netflix’s lead and making the switch.
