For many individuals, Christmas is a time for family. For
some, it is an excuse to gather around the TV and watch movies.
took down Netflix (NASDAQ:
) for an undetermined number of users on Christmas Eve, Netflix
subscribers were left without a streaming video option. Some
likely wondered if they were smart to cut the cord.
"I came home to relax and watch movies; I tried several times,
but I gave up," one subscriber told
The Wall Street Journal
. In the absence of Netflix, he was forced to watch Christmas
specials airing on TV.
At the same time, millions of Amazon Prime (NASDAQ:
) subscribers were free to watch
Thor, Deep Impact, Everything is Illuminated
and a hodgepodge of other films and TV shows. They did not
encounter any technical problems on Christmas Eve or Christmas
This is significant because of the source of Netflix's
problem. According to
, Netflix is blaming Amazon for the outage.
While this might sound like an interesting case of corporate
sabotage, Netflix is actually a customer of Amazon. The video
rental giant uses Amazon's cloud services to deliver online
Amazon is unlikely to risk damaging its reputation by
purposely ousting Netflix on Christmas. However, the outage does
beg one question: will the cloud ever live up to its
Tech companies want investors to believe that cloud-based
computing is the future. They insist that
will be done through the cloud. For that to occur, however, they
must first show that it is a stable and reliable platform.
Thus far, the cloud has been nothing more than a
cost-effective disappointment. It has saved companies millions
while providing billions in additional revenue to a few key
players. At the same time, cloud users have endured
that have raised questions about its usefulness. Is it safe for a
company to put all of its eggs into one basket -- or one cloud,
if you will?
Amazon has had number of outages this year, which could
inspire a transition for the industry. Smaller firms may attempt
to offer a backup service to supplement the cloud options
provided by Amazon and other large corporations. It may not work;
users may resist the urge to use multiple cloud services. Even if
they don't, there may still be problems.
Looking ahead to 2013, Netflix might want to reconsider its
unusual partnership with Amazon. Right now, Barnes & Noble
) does not use Amazon's marketplace to sell books. Best Buy
) does not use Amazon to sell electronics. Why should Netflix be
any different? Why should the company pay a competitor to deliver
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.