This year, Netflix made what looked like a peculiar choice: the DVD-by-mail company decided that over the next two years, it would move most of its Web technology - customer movie queues, search tools and the like - over to the computer servers of one of its chief rivals, Amazon.com.
Amazon, like Netflix, wants to deliver movies to people’s homes over the Internet. But the online retailer has lately gained traction with a considerably more ambitious effort: the business of renting other companies the remote use of its technology infrastructure so they can run their computer operations.
In the parlance of technophiles, they would operate “in the cloud.”
Cloud providers, large ones like Amazon, Microsoft, Google and AT&T, and smaller ones like Rackspace and Terremark, aim to convince other companies to give up building and managing their own data centres and to use their computer capacity.
Most cloud services have largely been aimed at start-ups, like the legion of Facebook and iPhone applications developers who found they could rent a first-class computing infrastructure on the fly.
Now cloud providers are trying to bring these types of flexible services to the more conservative and lucrative world of large corporations. They are testing the waters, despite anxiety about data failures, slow delivery of data - and or course the vulnerability of confidential information, perched way out of their control on alien servers.
Kevin McEntee, Netflix’s vice president of engineering, said Netflix switched in order to “focus our innovation around finding movies, rather than building larger and larger data centres.”
As for tethering Netflix’s future to a rival, McEntee said, “It’s in their interest to make us successful in the cloud. That’s why we felt comfortable.”
Jeffrey P. Bezos, Amazon’s chief executive, has predicted that its cloud computing division will one day generate as much revenue as its retail business does now. For that to happen, Amazon and other cloud providers will have to convince big business.
But most big organisations say they are wary of placing more critical software and business operations on another company’s computers.
“We are no different than anybody else. We are concerned about privacy and security and compliance,” said Dave Powers, a senior systems engineer at Eli Lilly, the pharmaceutical giant, which uses Amazon’s cloud services for some research and development efforts. “We are very careful about what we are putting out there today.”