Cloud Makes Netflix’s VP of IT Position Redundant

Show’s over for the vice president of IT operations title at Netflix Inc.NFLX +2.12%The streaming media company said it will not hire anyone to replace Mike Kail, who left the company to become the CIO of Yahoo Inc.YHOO +1.31% in August, according to a company spokesperson.

Many of Mr. Kail’s former responsibilities have been given to another employee, whom Netflix declined to name. The company does not have a chief information officer. It appears, though, that technology has become so integral to the way Netflix delivers its product, that it may not make sense to treat it as a separate entity internally. The decision reflects a wider trend as cloud services make it easier for businesses to manage technology without the aid of a separate IT infrastructure group. This shift, found in all industries, is helping to transform the CIO role.

Mr. Kail had set Netflix on a path to shift all of the company’s corporate IT to software-as-a-service and the public cloud this year, according to a 2014 presentation. The company increasingly is using services from Amazon Web Services, Google Inc.GOOGL +0.92%, Workday Inc.WDAY +2.07%, Box Inc. for various parts of its infrastructure. Some of those service providers such as Amazon Web Services are the same ones it uses to deliver its product to consumers. For example, everything customers see on the TV screen when they scroll through and select videos runs on Amazon Web Services.

Netflix said it regularly reviews and evolves the structure of its teams to ensure efficiency as it grows. “Mike’s departure allowed us to combine data center and streaming operations under one executive who serves in a very similar capacity,” said Anne Marie Squeo, a spokesperson at Netflix, in an email. The company still has a team of IT workers.

As businesses become increasingly digital, it may no longer make sense for them to have separate IT operations, said Eveline Oehrlich, vice president and research director of infrastructure and operations at Forrester Research Inc.FORR +1.34%Instead, there will likely be integrated product teams from various parts of the organization that work together to deliver services. Roles such as VP of operations or VP of infrastructure are no longer needed, she said. “The role of CIO becomes more of a brokering role and a consultant and advisor relative to the technology that’s available rather than building or delivering that infrastructure,” she added.

If any company could pull off this kind of shift in management structure, it would likely be Netflix, said Shawn Banerji, managing director of the information officers practice at Russell Reynolds Associates, an executive recruiting firm. Still, Mr. Banerji noted that it’s important to have someone in the organization who is responsible for taking ownership of information technology rather than handing it all over to a provider. Instead, an executive needs to take responsibility for the processes, the work flows and the intellectual property. “Only then can you hope to collaborate with the service provider who can do it for you,” he said.

http://blogs.wsj.com/cio/2014/10/03/cloud-makes-netflixs-vp-of-it-position-redundant/

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