Zynga moves from AWS to its own Data Centers

Zynga is one of AWS largest tenants, supporting Zynga's rapid growth.  I discovered most of this information a year ago interviewing some people, and now that there is a public document, I can blog the following information.

VentureBeat's Dean Takahashi reports on the disclosure in the SEC statement.

Zynga planning to diversify beyond Amazon, build its own data centers

One of the little-known facts about social game giant Zynga is that it’s one of the biggest operators of cloud computing infrastructure, built to support its current customer base of more than 281 million monthly active users.

For much of its four-year history, Zynga has relied on a third-party hosting company, Amazon Web Services, for the hardware infrastructure for its server-based games such as FarmVille on Facebook. But to cut costs and diversify its risks, Zynga is now investing more money in building its own data centers, according to the company’s initial public offering filing with the Securities and Exchange Commission.

Zynga considers the investment in its own infrastructure to be important enough to warrant an investment of $100 – $150 million in the second half of 2011, according to the filing.

Where is Zynga moving to?  DCK reports on some of the sites.

Zynga currently leases data center space from two wholesale data center providers, DuPont Fabros Technology (DFT) and Digital Realty Trust (DLR). In the wholesale data center model, a tenant leases dedicated, fully-built data center space. Thisapproach offers greater control and security than shared colocation space, and is quicker and cheaper than building an entire data center facility. The tenant pays a significant premium over typical leases for office space, but is spared the capital investment to construct the data center.


Several of Zynga’s leased data centers are adjacent to Facebook data center facilities.

How fast can Zynga react in its new infrastructure?  How about 1,000 servers in a day.

Using Amazon EC2 and Leased Data Centers
Zynga has a strong cloud-based infrastructure that balances Amazon cloud instances with its own internal cloud infrastructure.  With the ability to add as many as 1,000 new servers to accomodate a surge in users in a 24 hour period (according to the S-1) a heavy hosting cost is associated with increased user demand.  By building more of its own infrastructure in company-owned data centers, Zynga might be able to reduce that cost.

Zynga has architected its solution for AWS.

Cadir Lee (CTO Zynga) quoted in a VentureBeat post:

It’s not the amount of hardware that matters. It’s the architecture of the application. You have to work at making your app architecture so that it takes advantage of Amazon. You have to have complete fluidity with the storage tier, the web tier. We are running our own data centers. We are looking more at doing our own data centers with more of a private cloud.

Netflix is infamous for being 100% in AWS, and Zynga is going in the opposite direction.

Zynga is going the opposite direction than Netflix. While Netflix is focusing (by using Amazon for most of their infrastructure), Zynga is diversifying (building their own data centers) .

And, what has Zynga learned running in AWS.  Note the yellow below "We have experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints."

A significant majority of our game traffic is hosted by a single vendor and any failure or significant interruption in our network could impact our operations and harm our business. Our technology infrastructure is critical to the performance of our games and to player satisfaction. Our games run on a complex distributed system, or what is commonly known as cloud computing. We own, operate and maintain elements of this system, but significant elements of this system are operated by third parties that we do not control and which would require significant time to replace. We expect this dependence on third parties to continue. In particular, a significant majority of our game traffic is hosted by Amazon Web Services, or AWS, which service uses multiple locations. We have experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. For example, the operation of a few of our significant games, including FarmVille and CityVille, was interrupted for several hours in April 2011 due to a network outage. If a particular game is unavailable when players attempt to access it or navigation through a game is slower than they expect, players may stop playing the game and may be less likely to return to the game as often, if at all. A failure or significant interruption in our game service would harm our reputation and operations. We expect to continue to make significant investments to our technology infrastructure to maintain and improve all aspects of player experience and game performance. To the extent that our disaster recovery systems are not adequate, or we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate increasing traffic, our business and operating results may suffer. We do not maintain insurance policies covering losses relating to our systems and we do not have business interruption insurance.

Who are Netflix's proponents after throwing supporters of divide the business under the bus?

Netfilx upset lots of users when they announced the splitting into Netflix and Qwikster.  There were a handful of analyst type of people who were saying that it was a good business decision.  So there were a large group of frustrated users, a small band of business people who said Netflix is doing the right thing and they should hold course.

Now that Netflix has thrown Qwikster under the bus, it also threw the handful of supporters who said dividing the business is the right thing.  How bad do you look saying Qwikster was the right thing, and 3 weeks later Netflix cancels Qwikster.

So, who is left to say Netflix is great company?

This situation will be a big lesson for companies who don't treat customers as their #1 priority.  It is clear to Netflix users that they are 2nd class citizens in Netflix's grand plans.

Also, an unintended consequence is the value of ex-Netflix employees on the job market has decreased.  This situation sure hasn't increased their value, even though there is an increase in quantity of Netflix employees thinking of exiting now that they have seen the stock drop from $300 to $110.  Morale at Netflix cannot be good.  I wonder if Amazon, Google, and a bunch of others have fired up the recruiters to hang around Netflix HQ.

The #1 resource of Netflix is great people.  The #1 proponents is loyal fans.  How many #1 things surround the Netflix brand?

The one thing that could change perception is throwing the CEO under the bus and take the blame.  How much do you think the Netflix stock would go up if the CEO quit?

Think about some of these things when running your data center.  Who is your #1 customer and how do they feel about their service?  Are they a proponent of your operations?  If not, if may explain why the business units are running to the cloud.

Navy's Green Data Center opens

The Navy had a ribbon cutting ceremony for its latest data center to support consolidation of 100 data centers.

The Department of the Navy's Chief Information Officer Terry Halvorsen and Dave Weddel, assistant deputy Chief of Naval Operations for Information Dominance, were keynote speakers at the ribbon-cutting event.

"This data center will be part of the Navy's data center consolidation effort. Not only is this data center efficient, it's green. That is another big piece of what we want to do. We need to protect the environment and the resources that we have. This data center will help us do that," said Halvorsen, who is the Navy's senior official on matters related to information management, information technology/cyberspace and information resources management. He is also the Department of the Navy's lead for IT/cyberspace efficiency.

Green data center is mentioned as part of the speech by Navy Officers.  Who would have thought that a Navy CIO would make points on how green his data center is?

Even thought LEED is mentioned most likely the largest green contribution is shutting down the 100 other data centers.

Construction began on the 20,220-square-foot facility on Joint Base Charleston-Weapons Station Oct. 15, 2010 and was recently completed. The $9.498 million data center was designed to the United States Green Building Council's Leadership in Environmental and Energy Design silver rating standard.

The Navy's data center consolidation initiative will provide cost-savings due to reductions in physical locations, power and data center management contracts.

...

06:30 GMT, October 10, 2011 CHARLESTON, S.C. | SPAWAR Systems Center Atlantic unveiled a new data center that will play a key role in consolidating more than 100 Navy data centers to increase effectiveness and efficiency and to reduce costs while still meeting the Navy's security and operational requirements, Oct. 7.

Netflix, Cancels Qwikster, let's see what else they change like the price

I just got this e-mail announcing NO QWIKSTER.

Let's see if Netflix takes the next step and changes their pricing.  They say they won't.  I have my Amazon Prime account and Amazon Kindle Fire on order.

Do people trust the Netflix team?

They say they are committed to making Netflix the best.

Netflix

Dear David,

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password…in other words, no Qwikster.

While the July price change was necessary, we are now done with price changes.

We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.

We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.

Respectfully,

The Netflix Team



The opposite of the Amazon Kindle Fire, your Cable HD Set Top box

The Amazon Kindle Fire is getting lots of news, and part of the excitement is storing your content in the cloud, and not on the device.  But, let's be clear, much of the content that will be stored will simply be a small unique identifier that says  you have rights to a book, music, or movie.  Storing, thousands of copies of the same MP3 music file in individual could accounts is wasteful and costly.  Store one copy and point to the copy in individual accounts is a greener way.

Look at a device that is in millions of homes consuming as much power as a refrigerator, your cable STB.

The Natural Resources Defense Council has conducted a study that places the spotlight on how inefficient cable boxes and DVR's are in American homes.

These boxes, which guide cable signals and digital recording capacity into televisions, run at a constant rate and can utilize more power than a new refrigerator or air conditioning unit.

There are millions of these STBs.

According to the study, there are 160 million set-top boxes in the U.S., and this number is increasing. These boxes run 24 hours per day, even when they're not being used. The study found that add-on DVR's use an additional 40 percent more power than the set-top box.

The Natural Resources Defense Council found that these boxes consume $3 billion in electricity per year in the U.S., and 66 percent of this power is drained when no one is even using it. Also, one high definition cable box and one high definition DVR use about 446 kilowatt-hours per year, which is 10 percent more than a 21-cubic-foot refrigerator that is energy efficient.

Maybe the Amazon Kindle Fire will gradually replace the cable STB.  It is a much more energy efficient and storage efficient device.

The cable industry has pushed the STB a high energy cost to the consumer.  Turning off the power to STB is a pain as turning it on means the device needs to reload the channel content which can take an hour.  Doesn't this sound like an Enterprise IT solution?  a monopoly?

An energy efficient green data center changes your strategy.  Think of what the cable providers have vs. what Amazon has.