WHAT CAN WE LEARN FROM NETFLIX?

Netflix started as a DVD rental company in 1997. It used to rent DVDs and send them by courier to subscribers in the US. In 2007, Netflix started its online streaming service, which began picking up from 2010 onwards. Today Netflix has about 100 million customers around the world and fewer than 5 million DVD customers (mostly in the US). On financials it had a top line of about $9 billion in 2016, which grew about 30 percent year on year, and a gross profit margin of over 30 percent. Netflix has done quite well to scale the business so far. There were many DVD companies in the old brick-and-mortar era, and many of them disappeared without a trace. "What did Netflix do differently?"

Apart from the fact the company was ahead of the curve in the way it digitized its business from couriering DVD to digital distribution, it has done a few other things differently too. Netflix has a great business model, huge focus on content, unique digital culture and exceptional use of technology.

Technology at Netflix

Netflix uses about 10 percent of its top line, which amounts to around $900 million in research and development. And this number has been growing year on year as the top line has grown. Netflix uses open source extensively and has built a community around its open source products. In fact, the architecture of Netflix has been replicated by many companies and is referred to by some as Netflix Architecture.

Netflix as a disruptive Leader

For a company evolution is not enough, it is also important to respond digital disruption properly. The term digital disruption is mostly misused, it is used to define any digital technology, also often it is confused with disruptive technology. The latter is used for new technology that challenges old technology.

Rapidly changing digital technology breeds new business models and challenges the existing products and services. Thellos change is defined as digital disruption. For example, social media is a digital disruption for the media sector. Due to social media marketing campaigns, TV networks need to adjust its advertisement prices to compete with social media.

Wellhole digital disruption is a challenge for the related sector, it is often an opportunity for other sectors. If we look at the social media and media sector relation, social media gravely disrupted the media sector, but also social media provides a very important opportunity for small and medium businesses.

Widespread use of internet and WEB 2.0 drastically changed our habits, especially TV networks were affected by thellos change. Netflix gradually increased its online library to provide a better service for online subscribers, in 2008 Netflix reached an agreement with Starz Entertainment (Spartacus TVshow), then in 2010 Netflix reached a five year agreement with Paramount Pictures, Lions Gate Entertainment and MGM to stream movies worth of one billion dollars. The real game changer for Netflix came when they started to stream popular TV shows. For every company Netflix is the perfect example of how to evolve and adapt but also how to survive digital disruption. Netflix constructed very successful business model with its rental service but over the years they have foreseen the changes in the consumer behavior and changed their business model accordingly.

At the height of social media and content marketing Netflix, once again, evolved and started to produce its own movies and shows. Today, Netflix is the digital disruption and that is a level only a few companies managed to reach.

Netflix On AWS

Netflix uses AWS for nearly all its computing and storage needs, including databases, analytics,

recommendation engines, video transcoding, and morehundreds of functions that in total use more

than 100,000 server instances on AWS.

Netflix's infrastructure, built on AWS, makes it possible to be extremely resilient, even when the company is running services in many AWS Regions simultaneously. One of movie that produced by Netflix of This is My Architecture, Coburn Watson, director of performance and reliability engineering at Netflix, walks through the company's DNS architecturebuilt on Amazon Route 53 and augmented with Netflix's Zuulthat allows the team to evacuate an entire region in less than 40 minutes.

Please answer the questions below (give your argumentation using your own language and write the reference(s))!

1. From above case,draw as-isbusiness process andto-bebusiness process in Netflix before and aftertechnology disruption!
2. Propose your Give youridea for future Netflix enhancement related to integration among ERP, SCM, CRM in Netflix!