CIO Innovation with Mike D. Kail, CIO, Netflix

Michael:         

(00:05) Hello, welcome to CXOTalk. I’m Michael Krigsman and this is episode number 43. As always I am joined with my very friendly and if you notice I’m not saying anything sarcastic or snide today a very friendly and believe me it’s hard, Vala Afshar, how are you

Vala:   

I’m doing great.

Michael:         

(00:31) Good, and Vala, we have a very interesting guest today.

Vala:   

We have an amazing guest today please.

Michael:         

(00:37) Who is Mike Kail, who is the Chief Information Officer at Netflix. Hey Mike how are you?

Mike:              

(00:44) Hey great guys, happy to be part of this.

Michael:         

(00:47) Thank you so much Mike let’s jump in and tell us about Netflix. I think everybody knows who Netflix is, but tell us about Netflix and briefly about your background.

Mike:              

(01:52)Sure so hopefully everybody knows the brand by now and I believe we’ve had a good year and people are excited about House of Cards, Season two coming out next Friday, which is Valentine’s Day.

(02:05) My role here is I’m responsible for all internal IT, so that’s campus networking, cloud infrastructure, cloud applications and platforms, supporting our marketing team for Adtech and the real time bidding and the programmatic buying area. HRAIS, with Workday CM and expense and then financials ERP, we just recently moved from Oracle to Workday financials as well as Workday payroll.

(02:37)So a pretty broad range of technologies I’m responsible for and have a team of about 125 – 130 today and growing.

Michael:         

(02:46) And how many employees does Netflix have right now?

Mike:              

(02:51) I think we’re just under 1400 between small office in DC, here in Los Gatos and then Beverley Hills.

Vala:   

(03:00)As I was researching about the show, I mean amazing stacks about Netflix. You know one in four Americans subscribe to Netflix, you know and the diversity of how they watch Netflix is interesting. Half watch on computer screens, a quarter watch on smart phones and tablets. 33% of all home broadband and internet traffic in the US generated by Netflix video, just amazing company and amazing player in the cloud and you know you just mentioned a bunch of cloud – Sass solutions that you and your team manage internalized with Netflix. Can you talk to us a little bit about your approach and philosophy regarding cloud computing.

Mike:  

(03:47)Sure, so I think Nick Carr first wrote about in 2004 with The Big Switch and how it’s really becoming commoditization, and it’s much like electricity. So you want electricity, you don’t build your own power plant. So we want to have computing and storage resources, you shouldn’t build a bunch of data centers if that doesn’t make sense if that’s not your business, and ours is providing great entertainment.

(04:13)So fuelling the new family dinner of a family four at watching content on their iPads is what we need to focus on. So then how do I apply that to enterprise IT?

(04:25)So I don’t my teams focused on procuring hardware and network infrastructure and storage systems when it’s readily available in either Sass or public cloud. So then I can provide great service much more agilely instead of the long cycles of procurement, racking, stacking and configuring; I can just configure and move.

Michael:         

(04:50) So your philosophy really is very intensely focused on cloud wherever possible.

Mike:              

(04:57)Absolutely so it’s either used to breed Sass applications or where we want to do our own, do some custom application development and publish that on public cloud.

Vala:   

(05:10) Was that mindset already there, I mean you’ve been with Netflix for what, three plus years?

Mike:              

(05:15)Yeah, so I think the mindset had definitely been on the streaming side, but I don’t think it was really thought about for enterprise IT. So enterprise IT has always been about – obviously we have to have laptops and tablets ad physical devices on premises, but then how do I leverage other resources and look at things differently. I think that’s a perspective I brought here.

Vala:   

(05:41) Did that require re-tooling, retraining and not only changing the mindset, but the skillset of the internal IT organization. You mentioned 120 odd resources; can you talk to us a little about that transformation?

Mike:  

(05:57) Sure so  you know one great thing about Netflix is for those familiar with our 126 page culture deck, we hire really talented people and a lot of people say that and I really mean it. And there’s two really great traits that my employees have.        

(06:15) Intellectual curiosity, so wanting to expand their horizons and then continuous evolvement. So if you think about – cloud computing’s not a huge shift in thinking, but you have to think about architectures differently. How do you secure something you don’t have physical control over, and when you deploy applications, how do you handle resiliency and latency, once again when you don’t have full control over them. So it’s letting go and having people that want to think differently about infrastructures and architectures.

Michael:         

(06:54) So you said intellectual curiosity and  continuous evolvement?

Mike:  

(07:01) Yeah, so I think you have to be able to – especially at Netflix, we’re a very dynamic organization. So it’s not like I have a bunch of people doing one thing all dy. So you don’t just update DMS for example. So how do you continually expand your skillset and look at different and new technologies and you know, we have a great advantage point here and autonomy to do and to live in the future to some degree or at lease drive the future.

Vala:   

(07:30) Can you talk a little about your hiring process? You have a great brand and great company growing. It’s an awesome company, but is there anything unique about how you recruit; how you interview and how do you make sure there’s a cultural fit with new candidates that you bring to your organization.

Mike:              

(07:49) Sure, so we have an internal talent team that helps us with sourcing candidates and with also setting context early about the culture and what it means to work here.

(08:01)So recruiting really heard. The the Valley’s hot, there’s a bunch of great companies to work for. I think this is the best one to be at, but people have different goals. So it’s having conversations and making connections, whether that’s social media, going to conferences. Yu know I use the Glen Gary, Glen Roth you know, always be recruiting mantra.

(08:24) So anytime you meet somebody, you don’t have to give them the hard sell, but you should talk about why the Netflix culture’s great, what is different about it and at least get them thinking about wanting to be here.

(08:35) And then once we find a candidate, we probably put equal if not greater value on the cultural fit versus technical. I go into the interview, assuming that somebody has been working to five to 15 plus yearsthat they have the technical jobs. But do they really understand what it means to operate as a fully formed adult and in that culture that doesn’t have micromanaging.

(08:58) So the one thing I say to every candidate is, if you need a lot of daily direction and really enjoy micromanagement, being micromanaged you won’t have fun here over time. You’ll start to flail, because we set context so that the tagline out of the deck is context, not control. So if you want to operate with full autonomy with great context, you will absolutely love it here.

Michael:         

(09:24) So it sounds like the culture code deck, really is a very living real document that is part of the daily activities, especially it relates to hiring and probably other people oriented intersections. It’s not just a thing on paper or a slide deck, but you live it every day.

Mike:  

(09:48) It’s really guiding the principles in how you should operate every day, whether it’s doing direct candid feedback in real time, which eliminates if not all of the politics that exist unfortunately in a lot of organizations. To how do you grow and how do you think about hiring, your own skillset, and what you need to get done.

Vala:   

(10:11) So you come in three plus years ago and you realized the team need to focus more towards multi-tenant cloud Sass solutions and you start I suspect over time, migrating on premise solution to the cloud, what advice do you have for CIO’s going through the same process at the beginning. What were some of the challenges and some of the obstacles you have to overcome?

Mike:  

(10:34) Once again, I think setting context for everybody about why we’re doing this is the key to success. So the goal without any reason to have that goal is fraught with failure.

(10:47) So doing that early and then having a good clear plan that is agile enough to handle the bumps in the road that you can’t say I’m going to – everybody wants to say that I’m moving to the cloud, but what does that mean? I don’t want to fork lift existing apps and put them in cloud just to do it. So it gives you a good chance to look at all of your processes. Is this the right application, is it the right technology? And take a fresh look at a bunch of different areas that people may not even think about, so which is your financial system.

(11:23) Just because you’ve used the same system for 15 to 20 years, you know things have changed and my not be as sufficient as it once was. So really looking at improving business efficiency is something that you can do in conjunction with moving to cloud.

Michael:         

(11:39) So I’m really stuck on this idea of the culture code and the impact on IT. And the reason is that when I think of many of the IT folks that are no – not all of them, but many and I think of those CIOs and I think of how they’re trained and education and the career path it is not always lead to flexibility. But rather we towards control, rather than openness, and now you’re advocating really almost the opposite. Isn’t there a conflict there?          

Mike:  

(12:20) I don’t see the conflict, but then I have not followed H additional path in this role. So my background is a computer science degree from Iowa State a long time ago and then things like dev-ops, big data and cloud before they were buzzwords.

(12:37)So I was super early unfortunately for a lot of it and I wish I had coined a lot of the terms, but I think once again people need to take a fresh look at following what other people do doesn’t interest me.

(12:50)IT’s charter should be, and it is here to improve business efficiency and move the business forward, versus trying to co and protect your employees or prohibit them from doing X, and am not sure why that is ever a valid thought process.

Vala:   

(13:10) Can you talk to us a little bit about the growing demands of your stakeholders within Netflix. How has some consumer technology trends of mobile and social, cloud, apps change the demand on internal IT at Netflix.

Mike:              

(13:27)So if you start at the network layer, people expect the same experience whether they’re here at the office, whether at home, whether at a coffee shop or airport. So us moving towards what was called the zero trust network this year will be the start of that. And then supporting a different bunch of applications that allow people to get their job done and in conjunction with cloud they love to talk about mobile.

(13:56)Everything is mobile these days, you know personally I don’t have an office here. I have a tablet, a MacBook and chrome book and I carry that around and I can operate where ever. We also have a bunch of devices here, obviously since the Netflix app runs on them. So the acronym that I’ve blogged about while ago was instead of BYOD it really should be UAD, which is Use Any Device. Use the best device to get the job done and we should support it.

(14:28)So, in a secure manner and make sure that you have great access to applications and data.

Michael:         

(1434) So when you’re designing your systems, is that something that is foremost in your mind and do you try to explicitly set things up so that people can work off their devices as opposed to being in an office on a laptop?

Mike:  

(14:45) Yeah, so we try to remove a bunch of friction whenever possible. So with respect to Sass applications, we use one login to tie everything together via a single sign-on portal, especially for the applications that support the SAML 2.0 spec for security.

(15:03) So that way we have one place that people don’t have to have a different password for every application they use, and that helps with on boarding and off boarding employees, as well as the mobile experience. So you can access the application from your tablet, phone, laptop, and once again have the same secure login experience.

Vala:   

(15:25) Is this the greatest opportunity for IT to serve the business ensure optimal user experience you know where ever you are. I mean you said you UAD, Use Any Device, but any device, any location where ever you are all the mission-critical of this application with you everywhere. Is that the best way to serve the business?

Mike:  

(15:49) Yes and I think there has never been a better time for IT to fix its reputation in the industry. Pivot out of the blockers to being enablers, and sure that you can deploy this great technology that’s accessible where in a very agile manner.

(16:08) Leverage cloud computing, leverage Sass, leverage mobility and then the final tenant of that is providing analytics to the teams that need it so to understand those analytics before they asked for them, so being proactive instead of reactive is another good time.

Vala:   

(16:26) I totally get that and it’s so intuitive and I mean it’s common sense, although sometimes common sense is not so common, so why are CIOs under such scrutiny. I mean in Gartner News a press release the day before that 25% of large global organizations will have a CDO appointed by next year and a lot of that is promoting the CIO, or replacing the CIO or having somebody else to co-own the tech budget. And then the CMO’s have a a lot of future plans to expand. So this is the best time for IT to fix its reputation, why are we hearing so much about you know technology thought leadership shipping away from IT?

Note lost transmission.

Mike:  

(18:26) I think  I’m obviously not the best person to ask about this because I take a completely different view. I think it’s really driven by fear, so I think you have to be uncomfortable with being uncomfortable and taking a hard stance or what you believe is the correct stance and moving forward and partnering with the rest of the business versus being at odds with them. so figuring out how to partner with the CMO and figure out how to provide solutions to them.

Vala:   

So that’s good advice, being uncomfortable with being uncomfortable, great advice.

Michael:         

(19:07) Well yeah, and I’m particularly interested and you talk about being driven by fear and that’s absolutely right, but I think that is rampant throughout business. But maybe talk a little more about the implications of what that means for IT in general and what you’re doing at Netflix to change that.

(19:27) You’ve spoken about high performance IT, transformational CIO’s, enterprise IT 3.0 and I’m assuming all of this is in a sense of the antidote or more creative way in relating to the departments rather than (trivia? 19:43)

Mike:  

(19:45)So to answer the first part, I think the fear factor is really driven by unfortunately some of the analysts, so everybody has been predicting the surmise of the CIO and IT for as long as I can remember. So I view that as a challenge and I just tend to ignore them and move forward with what I think is right.

(20:06)Then what I’ve written about in the transformation period, enterprise IT 3.0 is really trying to get people to think differently and provide a framework both internally and externally for people to do that.

(20:18) So layout of what I think is the right path, which may or may not be correct, which I hope it is, but at least I’m going to try and pioneer the way to get IT to a better reputation both internally and externally and along the way hopefully help some other CIO’s and IT leaders.

Vala:   

What are some of the challenges that you face when you’re trying to introduce new innovation and when other stakeholders view is traditional IT is just someone who’s the guardian of the infrastructure. You know, how do you go about introducing change and innovation within Netflix.

Mike:              

(21:00) I think you have to understand the switching costs and the variable switching costs of technology for your employee base. And then addressing that head-on, so we switched from exchange on premises to Google apps last year. And I wrote a long Google Doc memo top lining why I thought that was actually correct, how to think about the switch What applications to use as people people move out of outlook and not just into the chrome browser. So setting the context there and then providing great support, and working with different people and piloting it, and really explain why you are deploying the technology.

(21:45) I think a lot of times unfortunately IT departments tried to deploy new technology without a communicating to the end-user why what they’re doing. So then people get frustrated because they don’t understand it and they don’t understand why, and I think that was probably one of the root causes of shadow IT. Then employees decided so to go and find their own app that they understand, and that helps them do their job.

(22:11)So once again, is IT understanding the needs of the business both in year time and then trying to predict out like what the needs of the marketing team will be 6 to 12 months from now.

Michael:         

(22:23) So what’s your view on shadow IT, if people inside the company are selecting their own apps, do you care, do you mind, what do you think about that inside Netflix.

Mike:  

(22:35) I only care from the fact that I’m disappointed that we should be providing it instead of someone finding it. So people should use the app to get the job done, and if there’s a big need for it, IT should deploy it and provide it in our portal versus blocking it.

Michael:         

(22:56) That you must be tempted and sometimes that even the CIOs that you must be tempted sometimes to look at these departments and say, why the hell are they doing that, we supply this.

Mike:  

(23:09) Honestly, never because that would completely be the wrong philosophy. If you want to be at odds with that department and then have a coo, then that’s a great approach.

Michael:         

(20:22) So you don’t believe – this is interesting, so let me play devil’s advocate for a moment then. So, historically the CIO role has been about control. I’m the protector, I the CIO am the protector of corporate assets, and security and everything else, and efficiency, and saving money. And therefore, you guys are going to do what I tell you to do.

Mike:  

(23:51) Michael you’re fired!

Vala:   

(24:07) I just read a HR blog, control is for beginners and he is the common theme whether it was Kim Stevenson or Christen, Russell and other CIOs that have been on the show, they talk about that they want to learn from shadow IT, because again as Michael said, shadow IT is an opportunity for them to understand how they can improve the service.

Michael:         

(24:32) Yes, so Kim Stevenson is the CIO of Intel and Kristy Russell is the CIO for the state of Colorado, and interestingly enough their views and your is pretty exactly that shadow IT is an opportunity to understand what the user community actually needs. And then to figure out where IT can support them better, and that seems exactly what you’re saying

Mike:  

(24:53) Yes, precisely

Vala:   

(24:55) We have a question from Dunn in Bradstreet from Twitter for you and the question is, what role does IT play in empowering employees via social media?

Mike:  

(25:09) So we have a social team internally and one of the roles of the information security team is to make sure that we keep the social media account secure, as well as like our Facebook pages from being phished or being spammed. So I think providing some level of security and monitoring is a good approach.

Vala:   

(25:33) And of course you’re one of the most active most social CIOs on Twitter, have you set the tone for the rest of the IT organization, and do employees look at your activity on Twitter and they‘re inspired to participate in social media as well?

Mike:  

(25:50) Yeah, one of my directors said to me yesterday that her 2014 personal goal is to Tweet more. But I think Twitter is a good outlet. It’s both a good way to share and ingest information, as well as I use it for a recruiting tool.

Vala:   

(26:07) So you recruit through social media?

Mike:  

(26:10) Yeah I think if you know I publish our road map deck and get people excited about what we’re doing here, which then attracts people to have intellectual curiosity and it’s a virtual cycle.

Vala:   

(26:24) Are they internal enterprise social collaboration tools that you use within Netflix?

Mike:  

(26:30) There are not. So I have yet to understand the benefit of such a tool.

Michael:         

(26:38) That’s interesting…

Mike:              

(26:38) …It’s known as the lowest common denominator and everything reverts back in

Michael:         

(26:45) So no plans – you’re not seeing the value of these stand-alone collaboration tools.

Mike:  

(26:53) Yeah, we’re very much in person culture, so I think a lot of collaboration happens in person in real time.

Michael:         

(27:02) Going back to cloud for a moment, can you tell us a little bit more about your cloud apps that you’re using and what did you migrate from. There are so many companies who are taking on these migration and considering it, so it would be really interesting to hear more about your experience.

Mike:  

(27:18) Sure, so I think one I mentioned we moved from exchange to Google apps for both mail, and we use Google Docs pretty heavily as collaboration. So I can’t imagine going back to a world where we mail a word document around, much like the old token ring network, so you never know who actually has token or the mass to copy.

(27:40)So being able to work you know with 20 to 100 people on a dock is amazing. So that was a great move and it got us out of the running exchange on the premises and hardware there. We most recently like I said move from Oracle financials to workday financials, which freed up a bunch of hardware and now we can apply new techniques to accounting and make some efficiency gains there.

(28:06)The other ones we use, we use Boxx for some cloud storage and collaboration both internally and externally, so we exchange digital assets. And then there’s a few custom applications that we are doing. So legal contract management and revision control with full contextual search we are working on. A creative management asset to for our creative marketing team, so managing rights of assets and tracking that and knowing when like when music rights expire. That is a great tool that will help them – especially in the global scale will be much more efficient.

Vala:   

(28:51) Can you talk a little bit about how you support different lines of business and where there’s additional examples like you just mentioned for marketing or sales, or services or other functions.

Mike:  

(29:04) Sure, so a year ago I was asked to figure out this real-time bidding technology that’s been fairly up-and-coming and programmatic buying, online display ads.

(29: 17) So I’m I am running our ad tech platform, which helps all of our global marketing people with the programmatic buying in algorithms around buying display ads and presenting them in a much more formed manner. Then, how do we get insight back and work with our data science and algorithms team, on applying some of our algorithms.

(29:40) And if you are a member showing you a relevant ad about new content that we have coming, and if you’re not a subscriber it’ll tell you why you should be. And once again just providing great content to the external customer.So helping in the acquisition and retention departments.

Michael:         

(29:55) And we have a question from Twitter from Frank Scavo, who asked from Twitter the question that I was thinking about to ask next as well; so you are getting this one from two sides here. Does Netflix have any on premise systems left, and if so what are they and maybe you can explain why.

Mike:  

(30:16) Sure sothe goal for this year who hasn’t seen the deck is move on, 100% of corporate IT to public cloud. So the main stuff we have to move is we want to move our (print queues? 30:30) to Google cloud and fully move away from active directory to one login as a IDP and then we’re freeing up some of our net compilers and moving those to either Google drive, Boxx or Maginetics and using Mag FS as a filer as a service in the cloud.

(30:54)So it’s really storage and a few other applications we have internally that we just need to migrate. So like our applicant tracking system that one of my teams wrote, will be moving to the cloud this quarter and we are architecting that as a result.

Vala:   

(31:11) You said one of the apps that my team wrote. Could you tell us the make-up of the 120 some folks that work for you and how that make up will change if at all once you move 100% of corporate IT to the cloud.

Mike:              

(31:28) Sure so the neck up, once again from what we call our client technology services, which is our helpdesk and front-line support. To enterprise technology and enterprise apps platforms, DBAs, cloud system infrastructure, and storage engineers, networking, and information security. Our HRAS team, which helps with our talent team on the applicant tracking system.Our financials ERP team and then the ad tech team.

(32:07)So I try to organize it that there aren’t silos, so people were really cross functionally and you can blend across. So information security networking is arguably tightly coupled. So how do they collaborate together and both have some expertise in the other area.

(32:25) So I don’t think of moving to cloud really changing any of that, it’s having people like I said that have the skills to continuously evolve to learn new technology and the excited about it.

Vala:

(32:39) Do you have deep data analysts all data scientists if you want to use the title in your organization or do they exist in other functions within Netflix?

Mike:  

(32:53) So there’s a whole data science team that is outside of IT and they apply some of their best practices internal it with my database engineering team at a smaller scale.

Vala:   

(33:08) Do they report to the CMO or is there a chief digital officer at Netflix?

Mike:  

(33:13) There’s not, the data science team reports to our BP of cloud infrastructure. We have a CMO but we don’t have a chief digital officer.

Vala:   

(33:31) Is he or she the person that you collaborate most with in terms of different lines of business? Is marketing again as we all read is a strong need for the CIO and CMO to collaborate to digitally transform the enterprise. Do you find yourself working closely with the CMO more so than any other executive at Netflix?

Mike:  

(33:55) I would say it definitely trends towards that and I think it probably will over time just as we have a completely new marketing team and a fairly new CMO since Kelly has been here, she’s been here a year plus.

(34:08) I think there’s a lot of opportunities for CIOs out there to really understand the vast marketing landscape. I know it’s pretty intimidating if you have ever seen the ad tech lunarscape graphic, outlining all the technologies. I’m not sure one person can fully understand that landscape, but I think the CIO should really try to and put themselves, once again out of their comfort zone and learn something new and see how they can help.

Michael:

(34:37) Mike you’re definitely very forward-thinking in terms of a lot of the things that you’re doing, but I’m wondering what kind of challenges do you have? What do you find as resistance points, obstacles, problems that keep you up at night in trying to implement the vision that you have been talking about.

Mike:  

(35:00) I think the big challenge is trying to move fast enough, you know here in the Valley it’s faster paced than in other areas, and also I’m a fairly impatient person. So once we make a decision I want to deploy quickly and move on. So I think trying to balance expectations with reality, and even in the era of cloud computing things still take time, and you need also a thoughtful approach to securing it.

(35:28) I think with the recent breaches which seen across various industries, you need to spend a lot on the time thinking about how you secure these assets.

Michael:         

(35:36) So security is kind of a retracting factor, slowing factor.

Mike:  

(35:42) It’s just another factor, I don’t think it’s a slowing factor. I think it’s just something you need to think about with respect to performance and and usage and analytics. So it’s a key tenant of it and it’s always changing.

Michael:         

(36:00) What are some of the other slowing factors that exist in your world?             

Mike:  

(36:07)Thankfully there aren’t a lot of slowing factors, I think we’ve moved as an org really quickly and you know try and stay ahead of the business growth and understanding what’s out in the future while also keeping things running            and operating now.

Vala:   

(36:25) So what’s next, I mean any device, anywhere, anytime, with the entire IT cloud to a cloud infrastructure by the end of the year. When you think of and you look forward to the 2015/16 goals, do you have a sense of what disruptive technology or mass adoption will shape Netflix a year or two from now?

Mike:              

(36:49) I think I really want to push secure authentication, so if I want to talk about security and removing friction and adding security, let’s get out the username and password world and move into – removing some of our work to certificate-based, which supports mobility even better.

(37:10)So you have a device certificate and a user certificate, because you have multiple devices. And then if you lose your device or change it we just remove that cert and we don’t have to touch your user certificate.

(37:23)And then we also can do some analytics around anomaly detection and correlation. So as people become more mobile, we expect them to login from different places but we also want to keep some tabs of that.

Michael:         

(37:37) How much of your time and resources are focused on security issues. I mean I’m thinking of the target rate again and the impact, and you’ve got so many millions of subscribers if security breaks down it’s obviously a nightmare. So how much of your company is focused on security?

Mike:

(37:58) I think it’s just always in the background of your thought process and I don’t think we are paranoid and luckily we don’t have point of sales systems like target or (Newman? 38:08) to worry about. But it’s about how do you provide a really flexible environment with also being secure in knowing what is going on without being draconian about it.

Michael:         

(38:23) So basically it’s part of the blood basically, it’s part of your thinking all the time as your planning.

Mike:  

(38:29) It’s not something I’m paranoid about, but it is also something I don’t ignore.

Vala:   

(30:36) So a constant balance of removing friction and the ease of doing business and user experience, but at the same time you know, at the back of your mind you’re always thinking about the integrity of the networking security and the robustness of it.

Mike:  

(38:50) Yeah, I think it’s also about for us brand reputation. So how do I take down phishing sites that hurt a brand, especially as we have become more and more of a global company.

Vala:   

(39:06) What is the distribution of Netflix in terms of employees; Geographic distributions.

Mike:  

(39:12)So the main campus here in Los Gatos in California, and then we have a Beverly Hills office which is a couple of hundred and growing. We have a small DC office, a small office in Lux and then some contracting offices in a couple of other locations, but we’re really central here to the Valley.

Vala:   

(39:34) And do a good percentage of them telecommute or are they physically in offices?

Mike:  

(39:30)We’re very much and in person culture, so it’s here in the office.

Michael:         

(39:44) So you work with a variety of Cloud vendors and you mentioned several, what about start-ups? You mentioned you work with Boxx and I guess you can consider them as a start-up, even though they are about to go public and God knows how many billions they are valued at, but what about smaller start-ups. Do you work with smaller start-ups?

Mike:  

(40:06) Absolutely, so we get to see a lot of early technology here, and I think a bunch of stuff that we’re working on really needs a new way of thinking, so that’s why it’s fun to talk to the start-ups instead of the incumbents, because they take a fresh approach to architecture.

(40:23)So if you talk about how do you secure a cloud environment, you can’t deploy a firewall of finance for example. There is no perimeter and there is no invest regress, so you have to take a completely new approach.

(40:35)We definitely have a fairly huge appetite for working start-ups. And much like interviewing and employees, I interview start-ups based on (a) technology and then (b) in a team that we can really partner with. So getting out of the vendor relationship and really moving into the partner world.

Vala:   

(40:54) What do you look for, I mean can you tell us what are the signs that you’re looking for that makes you validate that this could be a start-up that could have a long-term meaningful relationship with Netflix.

Mike:

(41:08)So I think a couple of key attributes are focus, so are they trying to solve a very key problem and they’re focused on it, or are they going to bring in 20 people and they just want to land that Netflix is a really great brand to land on and have your logo. So they need to understand the needs of the business and will they spend the time here really doing that.

Vala:   

(41:31) What advice to you have for established companies that are trying to pitch their solution to you. Is it any different from a start-up?

Mike:  

(41:41) I think for both its do your due diligence on both the company and then me. We’re fairly public about the fact that we don’t have data centers, so trying to come in and sell me a data center for technology is not a good approach. Understand your customer and don’t take the shotgun approach to try and get in here.

Vala:   

(42:03) So if the vendor comes to you and opens up the interview or pitch, Mike tell us about your pain points. When you have written all these blogs and they are out there, that’s probably not a good thing to do.

Mike:  

(42:16)It’s not a good strategy in general.

Vala:   

(42:18) That’s another common thing that we’ve heard from CIOs that don’t walk in there and asking questions when – especially from a social CIO and blogs and do your homework. So hopefully vendor’s and start-ups that are watching the show, this is definitely a reoccurring theme, do your homework. And it may be goes back to your context statement, you know have an understanding of what your customers’ needs and not before that first meeting.

Mike:

(42:44)And don’t try to trick us into meeting you because that’s not a good approach. I could go into all the sales techniques.

Vala:   

(42:54) Tell us the worst one, the total obvious awful one to try and get a meeting.

Mike:  

(43:00) Calling my admin and saying that you were just talking to me and got disconnected, that’s an interesting one. The replying to an email like I was actually involved in a thread earlier, and forging the subject line is another fun approach, and then just sending me an invite and hoping I will just accepted

Vala:   

(43:24) Those are incredibly common and I have experienced all three and a couple fairly regularly, so.

Mike:  

(43:32)They must work – I don’t know.

Michael:         

(43:36) It’s like all these emails, you wonder who responds to these things and I guess some people do.. Will we’re just about out of time unfortunately, and it’s been a really interesting hearing about your approach to IT, which I guess because you didn’t come out of IT, you kind of figured it out in a sense that you went – in a commonsense way based on the guiding principles in the culture co-jocular. That’s what it sounds like to me.

Mike:  

(44:06)Whatever you think is right take ownership for it, execute, and if you then do feel like it’s failing or not the right approach, change course fairly rapidly; don’t try to force it. So really self-aware and business aware.

Michael:         

(44:26) So that’s the summary of everything I suppose.

Mike:  

(44:29) Yeah, I think that’s a very good summary. It’s a good guiding principle to operate by.

Michael:         

(43:35) Fantastic, well obviously it’s working really well for you at Netflix which is growing incredibly rapidly and obviously puts tremendous strain on IT just like every other part of the company.

Mike:  

(44: 50)I don’t view it as strained I view it as opportunity.

Vala:   

(44:53) Okay well I like that, a pragmatic optimism and a can-do attitude.

Michael:         

(44:59) A pragmatic optimism and can-do attitude. Well on that note it is time to take the show to a close and it has been great Vala seeing you, and we’ve been talking with Mike Kail, who is the CIO of Netflix. Mike, thank you very much for joining us today.

Mike:  

(45:26) Thank you guys, it’s been a pleasure.

Vala:   

(45:29) Thanks Mike and thanks for your active Twitter stream and all of your words of wisdom. Really appreciate it.

Michael:         

(45:39) on April 22, Vala and I are going to be doing a CXOTalk life event with CIO magazine in New York City, and we are looking for a really interesting CMO and/or CTO Chief digital officer, to join us on stage. So if you want to nominate somebody who is really good, please that us know. And with that, we will say goodbye and thank everybody for watching and we’ll see you next week. Bye bye.

 

Companies mentioned in today’s show:

Netflix                           www.netflix.com

Boxx                              www.boxx.tv

Intel                               www.intel.com

Facebook                      www.Facebook.com

Oracle                           www.oracle.com

Workday                       www.workday.com

Google                          www.google.com

Maginetics                    www.maginetics.com