Click here to close now.

Welcome!

@MicroservicesE Blog Authors: Lori MacVittie, Elizabeth White, Liz McMillan, Pat Romanski, Cloud Best Practices Network

Related Topics: @MicroservicesE Blog, Agile Computing

@MicroservicesE Blog: Article

Netflix Shocker: Confidence Crisis

Lack of confidence in leadership spurs sell-off despite sound strategy

Boomberg's Cliff Edwards reported the facts well:

Netflix Inc. (NFLX) dropped the most in seven years after the video-rental service said it lost 800,000 U.S. subscribers in the third quarter, more than expected, and predicted more cancellations over a price increase.

Netflix plunged 37 percent to $75.28 at 9:39 a.m. New York time, for the biggest intraday decline since October 2004. The stock closed at an all-time high of $298.73 on July 13, according to Bloomberg data.

The outlook suggests Netflix has been unable to contain a subscriber revolt over a price increase and aborted plan to force subscribers into separate streaming and DVD services. The company now forecasts losses in 2012 because of costs to offer content in the U.K. and Ireland, and will delay further expansion until profitability is restored.

Sound Strategy
It's clear that Netflix understands what's going on in the world of DVDs and digital content.  I daresay they understand it better than just about anyone else on the planet.  They have a sound strategy - it's all about streaming media.

But it takes more than knowledge and strategy to keep a great company going. And I do want to acknowledge that Netflix was a great company.

Scared Investors
Sound strategy is worth nothing unless someone can turn it into results - it must be backed up by solid plans which demonstrate insight and good judgment and are then executed flawlessly.

There's the disconnect.  At every major junction in past months, the Netflix leadership (i.e., Hastings) has acted as if good judgment and customer insight have suddenly disappeared.

Investors no longer believe that Hastings (or Netflix) really understand their own customers anymore.  When a company loses touch with its customer base, they lose the ability to lead.  And they lose the ability to predict.  Hastings has not only lost touch with the customer base, he's created an adversarial relationship.

You Can't Lead If...
If you're not in touch with your customers, if you don't "grok" their needs, concerns and issues, you can't be a leader.  You're bound to make decisions that raise the ire of the customer base.  Surprises happen.  Investors tend to intensely dislike surprises - it demonstrates that you're not in control of the ship.

When Your Credibility Is Gone
Clearly Hastings has lost the most important thing that a leader needs - credibility.  People no longer have faith in him to make good decisions.  Faith is so difficult to earn, so easy to destroy and almost impossible to earn back.

Why did the stock tank by 37% overnight?  Lack of confidence that Hastings is in control.  Lack of confidence in his ability to fix the situation.  Lack of confidence in his ability to successfully expand in Europe.

Netflix Loss of Market Capitalization

The Recovery?
Personally, I'd like to see Hastings accept real responsibility for all the disasters, and resign - be driven into the wilderness like some goat in ancient times with the sins of the company heaped upon it.  Then Netflix could find a clean leader (i.e., someone from outside Netflix) to restore credibility.

Past Is Prologue
But if past is prologue, it won't work that way.

Hastings will stay on for whatever reason, perhaps pride.  "Wall Street" will take forever to forgive him - if they ever do.  Every little error will turn into a big brouhaha and every victory will be ignored.  That's the way these things seem to work.  More often than not, the stock price languishes for (what seems like) an eternity in the toilet.  And then the CEO finally steps down - a year or two later (way too late).  Take a look at the list of CEOs who really messed up at the end -  Sculley, Capellas, Fiorina, Nardelli, Mozilo, Levin, Smith,  Akers, Lay....

More Stories By Hollis Tibbetts

Hollis Tibbetts, or @SoftwareHollis as his 50,000+ followers know him on Twitter, is listed on various “top 100 expert lists” for a variety of topics – ranging from Cloud to Technology Marketing, Hollis is by day Evangelist & Software Technology Director at Dell Software. By night and weekends he is a commentator, speaker and all-round communicator about Software, Data and Cloud in their myriad aspects. You can also reach Hollis on LinkedIn – linkedin.com/in/SoftwareHollis. His latest online venture is OnlineBackupNews - a free reference site to help organizations protect their data, applications and systems from threats. Every year IT Downtime Costs $26.5 Billion In Lost Revenue. Even with such high costs, 56% of enterprises in North America and 30% in Europe don’t have a good disaster recovery plan. Online Backup News aims to make sure you all have the news and tips needed to keep your IT Costs down and your information safe by providing best practices, technology insights, strategies, real-world examples and various tips and techniques from a variety of industry experts.

Hollis is a regularly featured blogger at ebizQ, a venue focused on enterprise technologies, with over 100,000 subscribers. He is also an author on Social Media Today "The World's Best Thinkers on Social Media", and maintains a blog focused on protecting data: Online Backup News.
He tweets actively as @SoftwareHollis

Additional information is available at HollisTibbetts.com

All opinions expressed in the author's articles are his own personal opinions vs. those of his employer.

@MicroservicesExpo Stories
The cloud has transformed how we think about software quality. Instead of preventing failures, we must focus on automatic recovery from failure. In other words, resilience trumps traditional quality measures. Continuous delivery models further squeeze traditional notions of quality. Remember the venerable project management Iron Triangle? Among time, scope, and cost, you can only fix two or quality will suffer. Only in today's DevOps world, continuous testing, integration, and deployment upend...
Conferences agendas. Event navigation. Specific tasks, like buying a house or getting a car loan. If you've installed an app for any of these things you've installed what's known as a "disposable mobile app" or DMA. Apps designed for a single use-case and with the expectation they'll be "thrown away" like brochures. Deleted until needed again. These apps are necessarily small, agile and highly volatile. Sometimes existing only for a short time - say to support an event like an election, the Wor...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Cloud Migration Management (CMM) refers to the best practices for planning and managing migration of IT systems from a legacy platform to a Cloud Provider through a combination professional services consulting and software tools. A Cloud migration project can be a relatively simple exercise, where applications are migrated ‘as is’, to gain benefits such as elastic capacity and utility pricing, but without making any changes to the application architecture, software development methods or busine...
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
Data center models are changing. A variety of technical trends and business demands are forcing that change, most of them centered on the explosive growth of applications. That means, in turn, that the requirements for application delivery are changing. Certainly application delivery needs to be agile, not waterfall. It needs to deliver services in hours, not weeks or months. It needs to be more cost efficient. And more than anything else, it needs to be really, dc infra axisreally, super focus...
Sharding has become a popular means of achieving scalability in application architectures in which read/write data separation is not only possible, but desirable to achieve new heights of concurrency. The premise is that by splitting up read and write duties, it is possible to get better overall performance at the cost of a slight delay in consistency. That is, it takes a bit of time to replicate changes initiated by a "write" to the read-only master database. It's eventually consistent, and it'...
Many people recognize DevOps as an enormous benefit – faster application deployment, automated toolchains, support of more granular updates, better cooperation across groups. However, less appreciated is the journey enterprise IT groups need to make to achieve this outcome. The plain fact is that established IT processes reflect a very different set of goals: stability, infrequent change, hands-on administration, and alignment with ITIL. So how does an enterprise IT organization implement change...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations migh...
At DevOps Summit NY there’s been a whole lot of talk about not just DevOps, but containers, IoT, and microservices. Sessions focused not just on the cultural shift needed to grow at scale with a DevOps approach, but also made sure to include the network ”plumbing” needed to ensure success as applications decompose into the microservice architectures enabling rapid growth and support for the Internet of (Every)Things.
Mashape is bringing real-time analytics to microservices with the release of Mashape Analytics. First built internally to analyze the performance of more than 13,000 APIs served by the mashape.com marketplace, this new tool provides developers with robust visibility into their APIs and how they function within microservices. A purpose-built, open analytics platform designed specifically for APIs and microservices architectures, Mashape Analytics also lets developers and DevOps teams understand w...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud envir...
Sumo Logic has announced comprehensive analytics capabilities for organizations embracing DevOps practices, microservices architectures and containers to build applications. As application architectures evolve toward microservices, containers continue to gain traction for providing the ideal environment to build, deploy and operate these applications across distributed systems. The volume and complexity of data generated by these environments make monitoring and troubleshooting an enormous chall...
Containers and Docker are all the rage these days. In fact, containers — with Docker as the leading container implementation — have changed how we deploy systems, especially those comprised of microservices. Despite all the buzz, however, Docker and other containers are still relatively new and not yet mainstream. That being said, even early Docker adopters need a good monitoring tool, so last month we added Docker monitoring to SPM. We built it on top of spm-agent – the extensible framework f...
There's a lot of things we do to improve the performance of web and mobile applications. We use caching. We use compression. We offload security (SSL and TLS) to a proxy with greater compute capacity. We apply image optimization and minification to content. We do all that because performance is king. Failure to perform can be, for many businesses, equivalent to an outage with increased abandonment rates and angry customers taking to the Internet to express their extreme displeasure.
There's a lot of things we do to improve the performance of web and mobile applications. We use caching. We use compression. We offload security (SSL and TLS) to a proxy with greater compute capacity. We apply image optimization and minification to content. We do all that because performance is king. Failure to perform can be, for many businesses, equivalent to an outage with increased abandonment rates and angry customers taking to the Internet to express their extreme displeasure.
SYS-CON Events announced today that the "Second Containers & Microservices Conference" will take place November 3-5, 2015, at the Santa Clara Convention Center, Santa Clara, CA, and the “Third Containers & Microservices Conference” will take place June 7-9, 2016, at Javits Center in New York City. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
The causality question behind Conway’s Law is less about how changing software organizations can lead to better software, but rather how companies can best leverage changing technology in order to transform their organizations. Hints at how to answer this question surprisingly come from the world of devops – surprising because the focus of devops is ostensibly on building and deploying better software more quickly. Be that as it may, there’s no question that technology change is a primary fac...