Netflix (NFLX) Stock Climbs on Cloud Migration

Netflix, Inc. (NASDAQ: NFLX)

Netflix is having an incredibly strong time in the market today, and for good reason. The company announced today that a migration process that has been in play since 2008 has finally met completion. Today, we’ll talk about the migration process that has been completed, how the market reacted to the news and what we can expect to see from NFLX moving forward. So, let’s get right to it…

NFLX Completes Cloud Migration

Netflix first started a big migration in August of 2008. In this month, the company experienced a major database corruption. As a result of this corruption, the company wasn’t able to ship DVDs to its members for 3 days. This hurt the company, making NFLX realize that it was a good idea to move away from virtually scaled single points of failure. In simple terms, the company needed to move away from the relational databases in their data centers and toward more reliable and scalable systems. At that point, the decision was made to move to the cloud.

Now, eight years later, the company has completed this migration. By 2015, the majority of infrastructure had been moved to the cloud, but there was still a bit more work to do. Now, the company has announced that after years of efforts, NFLX is now run entirely from the cloud and has shut down its data centers. On a blog post, NFLX had the following statement to offer…

Moving to the cloud has brought Netflix a number of benefits. We have eight times as many streaming members than we did in 2008, and they are much more engaged, with overall viewing growing by three orders of magnitude in eight years…”

How The Market Reacted To The News

As investors, we’ve learned that any time we see positive news with regard to a publicly traded company, we can expect to see gains in the value of the stock that represents the company. In the case of NFLX, the news reported today was overwhelmingly positive. Ultimately, moving to the cloud gives the service a higher level of security and reliability. As a result of the positive news, we’re seeing incredibly strong movement in the value of the stock today. Currently (12:40), NFLX is trading at $87.99 after gaining $1.64 per share or 1.90% so far today.

What We Can Expect To See From NFLX Moving Forward

Moving forward, I have an overwhelmingly positive opinion of what we can expect to see from Netflix. As of late, the stock has fallen on hard times as a result of slowing user growth in the United States. However, this is not a very concerning factor for me. The reality is that NFLX recently announced that it had expanded to become a worldwide company, after moving into more than 130 countries around the world. They also announced that they are working on moving their services to the world’s second largest economy, China. With this move, NFLX has really broadened its horizons with regard to user growth, and I believe that global user growth is going to be the driving force behind growth in the stock moving forward. Now that Netflix has completed the migration to the cloud, the service is now more secure and more reliable than ever before. Considering the current state of sentiment among consumers with regard to online security, this is also likely to help pick up user data. All in all, I’m incredibly impressed with NFLX and looking for gains!

What Do You Think?

Where do you think NFLX is headed moving forward? Let us know you think in the comments below!