I’m a fan of the Netflix show House of Cards but this isn’t about whether Kevin Spacey’s character Francis Underwood is like real politicians. “Slow” isn’t about the pace of the show which I think is fast based. It’s about why I see the “loading” sign on my TV screen while I’m streaming content from Netflix. I’m sure many of you have seen this a lot more lately.

Net neutrality had a recent setback in the courts but the FCC is going to try again with new regulations. Whether they are able to successfully win the battle to keep Internet access open and fair is unclear at this point.

The basic reason that Netflix performance is sometimes poor through my Internet provider, Verizon, was outlined in this recent article in the Wall Street Journal. Basically, the connection to Verizon is too small. There are differing views on why. Is Netflix unwilling to pay their fair share of network costs? Is this just a case of general increased Internet congestion? Or more ominously is Verizon purposely restricting Netflix traffic? Are they doing this because Netflix competes with their streaming business? If they are restricting Netflix traffic is this now a legal activity since net neutrality was struck down? No one really knows for sure.

Since the Verizon article, Netflix and Comcast have agreed on a new structure where Netflix has a different type of business arrangement with Comcast for their streaming traffic. Since there was also poor performance with Comcast connections for the same reason as Verizon, too small of a connection between their networks, the same questions apply. This Wall Street Journal outlines the Netflix Comcast deal. It’s likely there will be a similar deal with Verizon.

Clearly the large carriers used the pressure of poor performance for Netflix for their mutual customers to force Netflix to pay for connections. Do we want Comcast to become larger and more powerful by merging with Time Warner cable?

But what does this have to do with your SaaS or cloud business? Netflix is basically a large SaaS business with a portal, e-commerce, search and various other application functions. And of course a very large and sophisticated streaming application. It also runs almost exclusively in the public cloud on Amazon. Will Verizon restrict traffic to their retail and business customers from other cloud providers such as Azure and Amazon?

There are a lot of unanswered questions and all the facts aren’t visible but clearly there is the opportunity for large carriers to use their control of end-user Internet connections to compete in what can be viewed as unfair ways especially when the main part of net neutrality, open Internet access, is not a legal requirement.

Many SaaS and cloud businesses fit the Netflix model directly or indirectly with a variety of application functions plus a lot of content, most of it streaming content. What about websites that have a lot of content, online training courses, the Massively  Online Open Courses (MOOCS), and many other SaaS applications with substantial content especially video content. Will the carriers start to charge premiums to deliver this content? What would happen if Verizon has an application that competes with Salesforce? Will they restrict Salesforce traffic until Salesforce pays more money? Will they restrict traffic to their end consumer and business customers from cloud providers other than Verizon?

What can a SaaS provider do other than try to influence the political process for net neutrality?

• Since this is first and foremost a network performance issue, using a hosting or cloud provider who really understands networks is important. They also need to have robust network connections to a variety of carriers.
• Consider using a Content Delivery Network which can help improve performance.
• Use monitoring tools to really understand what kind of network performance your application gets over various carriers and take corrective actions. There are a variety of web application monitoring tools that are commercially available.

All of these require an investment but if performance is important to your application some investment in this area is justified, otherwise you are at the mercy of the carriers. And as you can see from the Netflix example even the best performing and sophisticated applications can get in trouble when dealing with the large Internet carriers.

–Paul–