How Netflix Decides on Building or Buying for Infrastructure

Netflix is building its own customized server boxes to deal with the massive volume of streaming content to millions of users. But the company is also considering new “off the shelf” technologies that could be less costly and more efficient. Netflix is working with hardware companies such as Western Digital to develop new technologies and design methods to improve performance and deal with the massive data traffic that Netflix experiences.

Netflix has been developing its own server boxes to handle streaming a petabyte of video content, describes David Fullagar, the director of content delivery architecture for Netflix. The company develops its own software to run on its own specialized hardware.

“Netflix started building its own custom content-delivery network or CDN because providers that run multi-tenant CDNs often have to make compromises when it comes to hardware or software,” explains GigaOM. “By building its own boxes, the video company can make sure that everything is optimized for video specifically.”

But there are costs to custom technologies.

“The vast amount of space inside the box and the cost of building the box is buying the storage itself. It’s about 75 to 80 percent of the cost,” says Fullagar. “And then the other expensive component of the box is the fast network interface card with lots of ports to enable us to have the good through-port now.”

“We would prefer not to build our own custom chassis, it’s just one of the things that we have to focus on, and we don’t get the economies of scale of other people using it as well,” continues Fullagar. “But the reality is in the future we’re hoping that we’ll be able to buy off the shelf, very compact high-storage units from one of the vendors, which hasn’t happened yet.”

Aside from supplying companies such as Netflix with hardware, Western Digital is researching new ways to help companies reduce their power and cooling costs, and create other cost efficiency designs and technology in large scale, football field size data centers, according to Brendan Collins, VP of product marketing for HGST, a Western Digital company.

Collins gives one example of the development of helium filled hard drives that would reduce vibration, and potentially deliver 40 to 50 percent more capacity while reducing power and cooling.

A video of the interview session featuring Fullagar and Collins at the Structure:Europe 2013 conference is available on the GigaOM post.