Netflix, Opportunity & Cloud

By John "JD" DeMasi III

How much does a Netflix subscription cost?

Did you say $14? You’re not wrong. 

However, the complete truth is a little more complicated than that. 

Here is another question: when Netflix releases the new season of Stranger Things later this month, are you going to watch it all in one sitting? I admit that I am going to binge-watch it, and accordingly, will not accomplish another thing that weekend apart from meal preparation (takeout) and basic hygiene.

For me, the true cost of Netflix is closer to:

Cost(Netflix) = ($14/month) + (Wasted weekends) + (Procrastinated chores) + (Angry spouses)

I am illustrating an economic concept called opportunity cost: the idea that when you make a decision, you lose potential gains from the alternative you did not choose.

The opportunity cost of going to college is missing out on four years of income and work experience. The opportunity cost of ordering a pizza is that you miss out on a chance to get sushi. 

Every decision has an opportunity cost – these are often subjective, but always important.

So, how much does on-premises storage infrastructure actually cost? 

The calculation that most people would use is:

Cost(On-Prem Storage) = (Purchase price) + (Maintenance) + (Facilities)

This is commonly referred to as TCO, or Total Cost of Ownership. Again, this answer isn’t wrong, but it ignores the impact that managing on-premises infrastructure has on your team’s ability to execute other objectives.

The true cost is more like:

Cost(On-Prem-Storage) = (Purchase price) + (Maintenance) + (Facilities) + (Delayed Mobile App) + (Lost Revenue) + (Slower Time to Market)

Even when things are running as they should, on-premises infrastructure requires care; this keeps your people and your money from accomplishing other goals. For some organizations, it makes sense to dedicate IT human capital to infrastructure maintenance. For some, it is better to let AWS or Azure handle the details while letting their IT teams focus on business objectives. The decision ends up being about the purpose of your internal IT resources: are they operational in nature, or strategic? 

Most organizations will want to strike a balance between these two priorities, utilizing enough hardware resources to minimize their regular operating costs while keeping a foot in the cloud so they can adapt to the changing needs of the business they support.

The strategy you choose should consider the opportunity impact of the on-premises versus cloud decision and should support the vision you have for your limited human, financial and technical resources. The tradeoff between price and flexibility is critical, and must be carefully considered.

A great place to start this conversation is with your dedicated NetApp team and our partner network. We understand the equilibrium you want to achieve and have solutions to build a bridge from your on-premises infrastructure to the cloud – allowing you to consume both models in a way that matches your needs.

Please shoot me a message and let’s talk about the opportunities in your future!

Or, feel free to set up a meeting.

Thanks!