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by "McKinsey CEO Shortlist" <publishing@email.mckinsey.com> - 04:24 - 12 Jan 2024 -
Decarbonizing the built environment is a big undertaking. What actions could help?
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
•
Buildings, houses, and heat. Roughly a quarter of the world’s greenhouse gas emissions come from real estate and infrastructure. Decarbonizing the built environment is possible and has the potential to generate significant value, McKinsey partner Brodie Boland and coauthors explain. Space- and water-heating emissions, which are responsible for about three-quarters of operational emissions for residential buildings, are an excellent target for decarbonization. Read the full report, Building value by decarbonizing the built environment, to see 22 actions that could potentially reduce overall emissions from the built environment by up to 75%.
— Edited by Vanessa Burke, editor, Atlanta
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by "Only McKinsey" <publishing@email.mckinsey.com> - 01:24 - 12 Jan 2024 -
Netflix: What Happens When You Press Play - Part 2
Netflix: What Happens When You Press Play - Part 2
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Welcome back! This is Part 2 of "Netflix: What Happens When You Press Play?” by guest author, Todd Hoff.
For those interested in a deeper dive into other subjects of the book Explain the Cloud Like I’m 10, check it out here.
Remember how we said a CDN has computers distributed all over the world?
Netflix developed its own computer system for video storage. Netflix calls them Open Connect Appliances or OCAs.
Here’s what an early OCA installation in a site looked like:
OCA Site from Netflix There are many OCAs in the above picture. OCAs are grouped into clusters of multiple servers.
Each OCA is a fast server, highly optimized for delivering large files, with lots and lots of hard disks or flash drives for storing video.
Here’s what one of the OCA servers looks like:
Open Connect Appliance from Netflix There are several different kinds of OCAs for other purposes. There are large OCAs that can store Netflix’s entire video catalog. Some smaller OCAs can store only a portion of Netflix’s video catalog. Smaller OCAs are filled with video daily, during off-peak hours, using a process that Netflix calls proactive caching. We’ll talk more about how proactive caching works later.
From a hardware perspective, there’s nothing special about OCAs. They’re based on commodity PC components and assembled in custom cases by various suppliers. You could buy the same computers if you wanted to.
Notice how all of Netflix’s computers are red? Netflix had their computers specially made to match their logo color.
From a software perspective, OCAs use the FreeBSD operating system and NGINX for the web server. Yes, every OCA has a web server. Video streams using NGINX. If none of these names make sense, don’t worry, I just include them for completeness.
The number of OCAs on a site depends on how reliable Netflix wants the site to be, the amount of Netflix traffic (bandwidth) that is delivered from that site, and the percentage of traffic a site allows to be streamed.
When you press play, you’re watching video streaming from a specific OCA, like the one above, in a location near you.
For the best possible video viewing experience, what Netflix would like to do is cache video in your house. But that’s not practical yet. The next best thing is to put a mini-Netflix as close to your home as possible. How do they do that?
Where does Netflix put Open Connect Appliances (OCAs)?
Netflix delivers vast amounts of video traffic from thousands of servers in more than 1,000 locations worldwide. Take a look at this map of video serving locations:
CDN Locations from Netflix Other video services, like YouTube and Amazon, deliver video on their own backbone network. These companies built their own global network for delivering video to users. That’s very complicated and very expensive to do.
Netflix took a completely different approach to build its CDN.
Netflix doesn’t operate its network; it doesn’t operate its own data centers anymore. Instead, internet service providers (ISPs) agree to put OCAs in their data centers. OCAs are offered free to ISPs to embed in their networks. Netflix also puts OCAs in or close to internet exchange locations (IXPs).
Using this strategy, Netflix doesn’t need to operate its own data centers, yet it gets all the benefits of being in a regular datacenter. It’s just someone else’s datacenter. Genius!
Those last two paragraphs were dense, so let’s break it down.
Using ISPs to build a CDN.
An ISP is your internet provider. It’s where you get your internet service from. It might be Verizon, Comcast, or thousands of other services.
The main point here is that ISPs are located all around the world, and they’re close to customers. By placing OCAs in ISP data centers, Netflix is also worldwide and close to its customers.
Using IXPs to build a CDN.
An internet exchange location is a datacenter where ISPs and CDNs exchange internet traffic between their networks. It’s like going to a party to exchange Christmas presents with your friends. It’s easier to exchange gifts if everyone is in one place. It’s easier to exchange network traffic if everyone is in one place.
IXPs are located all over the world:
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by "ByteByteGo" <bytebytego@substack.com> - 11:37 - 11 Jan 2024 -
[Online workshop] Maximising Observability with New Relic Logs
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by "New Relic" <emeamarketing@newrelic.com> - 06:10 - 11 Jan 2024 -
Banking is at an inflection point
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Bracing for change. The business climate for financial institutions is showing signs of improvement. Yet to sustain better times, the sector now has to manage a “great banking transition” that could transform the industry by reordering its approach to balance sheets, transactions, and distribution, explain McKinsey senior partner Asheet Mehta and colleagues. Explore our full report, Global Banking Annual Review 2023: The Great Banking Transition, to see five priorities for financial institutions to reinvent and future-proof themselves.
—Edited by Max Berley, senior editor, Washington, DC
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by "Only McKinsey" <publishing@email.mckinsey.com> - 01:25 - 11 Jan 2024 -
We speak with hundreds of CEOs each year. Here’s what they’re focusing on in 2024.
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
Happy New Year from Only McKinsey, the newsletter previously called On Point. We’re grateful to be back in your inbox kicking off 2024 with a renewed commitment to deliver prescient business insights on news of the day—as only McKinsey can.
•
Eight CEO priorities. Stubborn inflation and busted supply chains are just some of the challenges making the CEO job tougher, state Homayoun Hatami, McKinsey’s managing partner for global client capabilities, and Liz Hilton Segel, chief client officer and managing partner of global industry practices. Talks with hundreds of CEOs reveal the top issues leaders are grappling with, including gen AI. Explore eight CEO priorities for 2024, and read CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest to learn what makes a CEO great.
—Edited by Belinda Yu, editor, Atlanta
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by "Only McKinsey" <publishing@email.mckinsey.com> - 01:12 - 10 Jan 2024 -
How Discord Serves 15-Million Users on One Server
How Discord Serves 15-Million Users on One Server
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In early summer 2022, the Discord operations team noticed unusually high activity on their dashboards. They thought it was a bot attack, but it was legitimate traffic from MidJourney - a new, fast-growing community for generating AI images from text prompts.
To use MidJourney, you need a Discord account. Most MidJourney users join one main Discord server. This server grew so quickly that it soon hit Discord’s old limit of around 1 million users per server.
Discord risked losing this important new community if they didn’t act fast.
This is the story of how the Discord team creatively solved this challenge. They found ways to dramatically expand what their infrastructure could handle - keeping the thriving MidJourney community active on Discord.
What is Discord?
Discord is a popular chat app used by hundreds of millions to connect. Originally for gamers, now all types of communities use it - from hiking clubs to study groups to large gaming communities.
In Discord, a "server" hosts a community. It has chat channels to discuss topics chosen by the server owner.
Internally, Discord calls these servers "guilds" - so we'll use that term going forward.
Largest Discord Guilds (image source: Discord) Before MidJourney, the biggest guilds had around 1 million members - huge gaming communities like Roblox and Fortnite.
The Discord engineering team thought 1 million members was very close to the maximum a guild could handle. Let's explore why - but first, some quick background on the technologies powering Discord.
Introduction to BEAM and Elixir
Discord’s real-time messaging backend is built with Elixir. Elixir runs on the BEAM virtual machine. BEAM was created for Erlang - a language optimized for large real-time systems requiring rock-solid reliability and uptime.
A key capability BEAM provides is extremely lightweight parallel processes. This enables a single server to efficiently run tens or hundreds of thousands of processes concurrently.
Elixir brings friendlier, Ruby-inspired syntax to the battle-tested foundation of BEAM. Combined they make it much easier to program massively scalable, fault-tolerant systems.
Code snippets comparing Erlang and Elixir syntax (image source: elixirforum) So by leveraging BEAM's lightweight processes, the Elixir code powering Discord can "fan out" messages to hundreds of thousands of users around the world concurrently. However, limits emerge as communities grow larger.
Discord’s Real-time Infrastructure
As mentioned, Discord handles all real-time communication using Elixir processes on the highly concurrent BEAM virtual machine.
The path of a message through Discord’s real-time infra to other users and bots in a guild (Source: Discord eng blog) Internally, each Discord community is called a “guild”. A dedicated Elixir “guild process” handles coordination and routing for each guild. This tracks all connected users to the guild.
Every online user has a separate Elixir "session process”. When the guild process gets a new message, event, or update, it fans out this information to the relevant session processes. These session processes then push the update over WebSocket to the Discord clients.
This architecture provides a cost-effective way to handle millions of active guilds across a large pool of Linux servers in Discord's cloud infrastructure.
However, scaling limits emerge as guilds grow larger. Distributing messages and events to more users creates exponentially more work. Larger guilds also have more activity to distribute.
So the guild process load grows much faster as its number of users increases. BEAM helps tremendously, but there's only so much one BEAM process can handle.
This is why Discord thought breaking 1 million concurrent users per guild would be very difficult.
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MaxJourney
With that background established, let’s return to the main story. Facing a scaling crisis from Midjourney's runaway growth, Discord formed a small team of senior engineers to dig into the problems. This team was called MaxJourney.
Here’s what they accomplished.
Detailed Performance Profiling
Understanding where systems spend time and memory is critical before improving them. The team used various profiling techniques to analyze guild process performance.
The simplest was sampling stack traces to reveal expensive operations. This quickly highlights issues without much effort. However, richer data was needed.
So they instrumented the event loop to record metrics on each message type. This included frequency, min/max/average processing times. This analysis revealed the costliest operations to optimize. Cheap ones could be ignored.
Memory usage was also examined, since it impacts hardware needs and garbage collection throughput.
To estimate sizes of large data structures reasonably quickly, a helper library was built to sample maps and lists. It avoids fully traversing all elements.
This sampling revealed memory-intensive fields to refactor.
Armed with visibility into these time and memory hotspots, the team could now systematically target optimizations to rewrite inefficient code.
Passive Sessions - Avoiding Unnecessary Work
The team's first optimization was reducing unnecessary work. They realized the client app did not always need every update for guilds that users were not actively viewing in the app's foreground.
So they implemented "passive" connections for those guilds. Passive connections skip processing and data transmission until the user opens the guild.
Over 90% of the user-guild connections became passive for large servers. This cut required work by 90%, greatly reducing load.
However, MidJourney kept growing. So this alone was not enough.
Optimizing Relays - Distributing Fanout Across Machines
Relays already existed to split fanout work across BEAM processes for scaling. Relays are only enabled for large guilds, where they maintain session connections on behalf of the guild.
Each relay handles fanout and permissions for up to 15,000 users. This allowed leverage more BEAM processes to serve large guilds.
Originally, relays duplicated full member lists. It was simple to implement, but for massive guilds with millions of members, dozens of copied lists wasted huge amount of RAM.
Also, creating relays stalled massive guilds for seconds while serializing and transmitting member data.
So the team optimized relays to track just the tiny subset of members needed per relay.
Keeping Servers Responsive
In addition to overall throughput, ensuring low latency was critical. So the team analyzed operations with high per-call duration, beyond just total time.
Worker Processes and ETS
Key culprits were member iterations taking seconds, blocking guilds. The solution was worker processes to offload these. Workers leverage ETS, an in-memory database for fast inter-BEAM-process data sharing.
Members were stored in ETS, with recent changes in the guild's heap. This hybrid model kept the guild's memory small.
For slow tasks, workers are spawned to run them asynchronously using the shared ETS data, freeing the guild to continue handling messages.
An example slow task is handling guild migration between machines. Copying state from the old guild process to the new process normally stalls the old one for minutes. But offloading this to a worker avoids blocking the old guild process from handling incoming messages.
Manifold Offload
Another idea was offloading fanout from guilds to separate "sender" processes, further reducing guild workload and insulating the guild processes from network backpressure.
However, this unexpectedly tanked performance due to pathological garbage collection. Analysis showed it was triggered by freeing small memory outside the heap.
Tuning the virtual binary heap size fixed this. Now offload could be enabled, significantly improving throughput.
Latest MidJourney Member Count - 18 Million! (Image source: Discord servers - home) Through systematic optimization, the MaxJourney team achieved the seemingly impossible - expanding guild capacity 15x to keep MidJourney thriving on Discord.
References
[1] Maxjourney: Pushing Discord’s Limits with a Million+ Online Users in a Single Server
Using Rust to Scale Elixir for 11 Million Concurrent Users
[2] How Discord Scaled Elixir to 5,000,000 Concurrent Users
[3] Discord Developer Portal — Documentation — Guild
[4] GitHub - discord/manifold: Fast batch message passing between nodes for Erlang/Elixir.
[5] BEAM (Erlang virtual machine) - Wikipedia
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by "ByteByteGo" <bytebytego@substack.com> - 11:38 - 9 Jan 2024 -
Meet the partners attending Davos 2024
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
New from McKinsey & Company
The World Economic Forum’s Annual Meeting in Davos kicks off next week, and as a strategic partner to WEF, the 2024 McKinsey delegation will join other world leaders from government, business, and civil society to discuss global issues and set priorities for the year ahead. Meet some of the McKinsey leaders attending Davos and dive into their recent insights, which address topics such as digital and AI transformations, CEO priorities for 2024, the world economy, and more. And for more on Davos, don’t miss this video on what Andres Cadena, Acha Leke, Kate Smaje, and Sven Smit expect at this year’s meeting.
Kate Smaje
Kate Smaje is a senior partner in the London office. She works with clients to deploy the power of data, digital culture and capabilities, and modernized core technology. Kate has been a core leader of our consumer work for many years, helping leading retailers and consumer-facing companies capture opportunities afforded by new growth platforms, rethink consumer-engagement models, and improve organizational performance. She also has firsthand experience as a chief technology officer across core technology, digital product management and innovation, and cybersecurity work, and is a co-author of Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI.
Featured article: What really works when it comes to digital and AI transformations?
To see more essential reading on topics that matter, visit McKinsey Themes.
— Edited by Joyce Yoo, editor, New York
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by "McKinsey & Company" <publishing@email.mckinsey.com> - 10:23 - 9 Jan 2024 -
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by "Remote" <hello@remote-comms.com> - 08:32 - 9 Jan 2024 -
Planning your next trip could get much easier with generative AI
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
Happy New Year from Only McKinsey, the newsletter previously called On Point. We’re grateful to be back in your inbox kicking off 2024 with a renewed commitment to deliver prescient business insights on news of the day—as only McKinsey can.
•
More magic in travel. Gen AI could transform the customer journey in travel, McKinsey partners Alex Cosmas and Vik Krishnan share on an episode of The McKinsey Podcast. When planning trips, “gen AI significantly eases the process of travel discovery,” explains Krishnan. AI also promises to enhance personalization and empower frontline workers, making travel more magical, Cosmas suggests. Hotel agents who say “welcome back” and “happy birthday” can surprise and delight guests. Discover how AI is poised to disrupt the travel industry.
—Edited by Belinda Yu, editor, Atlanta
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by "Only McKinsey" <publishing@email.mckinsey.com> - 01:42 - 9 Jan 2024 -
Has your organization set priorities for this year? A leader’s guide
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Many of us make personal New Year’s resolutions that we may not always keep. Organizations, however, don’t have the luxury of letting their objectives slip. Despite the geopolitical upheavals of 2023—the top concern among respondents to our latest McKinsey Global Survey—and the continuing threat of instability this year, leaders still need to establish business priorities, performance milestones, and anticipated outcomes for the months ahead. While unexpected shocks can scuttle even the most airtight of plans, some trends and developments stand out as essential for organizations to consider in 2024.
CEOs already have a lot on their plate—and this year will likely deliver more than its share of challenges and disruptions. “It’s the most difficult operating environment we can remember,” observe McKinsey senior partners Homayoun Hatami and Liz Hilton Segel in an article on CEO priorities in 2024. Based on numerous conversations with heads of companies, Hatami and Segel discuss eight priorities that may top leaders’ agendas this year. Growth is always a priority, but there are many ways to get there: through increased market share, implementing advanced technologies, or bumping up sales productivity, to name just a few. Leaders may also want to consider programmatic M&A: our research shows that companies that regularly pursue small deals perform better than do their industry peers using other M&A strategies.
That’s the percentage increase in postings for generative AI jobs between 2021 and 2022—a striking contrast to the 13 percent decline in overall job postings during that time. Demand is also rising for talent in other high-tech fields, such as Web3 and next-generation software development, for which job postings surged 40 percent and 29 percent, respectively. For other big, surprising, or noteworthy numbers from last year, check out “2023: The year in charts,” a compilation of our favorites from our Chart of the Day series.
That’s one consumer’s response to our latest ConsumerWise survey of US shoppers. Consumer sentiment held relatively steady in 2023, but Americans are increasingly cautious about the economic outlook and are keeping an eye on their spending. Mixed feelings also prevail in the five European countries we surveyed, with optimism tempered by concerns about inflation, climate change, and geopolitical upheavals. In both the US and Europe, most shoppers expect to spend mainly on essentials and trade down to cheaper products where possible.
Business leaders may mistakenly believe that “entrepreneurs are risk-takers or risk seekers,” says author and investor Ron Shaich in an interview with McKinsey. “We’re not. I’m not. I’m a risk-averse guy. What I do is I see opportunities.” As the founder and former chairman of Panera Bread and Au Bon Pain, Shaich seized every opportunity that came his way to innovate and transform the companies he led. His “contrarian” view of the world helped him differentiate his organizations from those of his competitors, he says. “If you do what everyone else is doing, you will get your market share, but you will not do anything better.” Transforming a business to achieve differentiation means figuring out what’s going to matter in the future—and then doing it. “The key to most everything is, first, tell yourself the truth, where you really stand, what the competitive marketplace is. Second, based on that, know what matters. Third, get done what matters.”
Paying attention to their own well-being may be a New Year’s resolution that leaders need to make—and keep. The pandemic brought home the heavy costs of worker burnout, and the stress on managers in particular continues to increase. While some high-achieving leaders may disparage self-care as frivolous, a healthy diet and fitness regimen, along with emotional self-regulation, can improve productivity, creativity, and the ability to make good decisions. Leaders may need to be cautious about discussing their own self-care routines with employees, however: alluding to your expensive workout equipment or flexible work schedule could alienate people who may not have access to those things. Instead, offering empathy, compassion, and practical assistance may be more effective.
Lead by prioritizing what matters most.
— Edited by Rama Ramaswami, senior editor, New York
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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:47 - 8 Jan 2024 -
Middle managers don’t always want to be promoted. How should leaders reward them?
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Happy New Year from Only McKinsey, the newsletter previously called On Point. We’re grateful to be back in your inbox kicking off 2024 with a renewed commitment to deliver prescient business insights on news of the day—as only McKinsey can.
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Battling bureaucracy. Squeezed between executives and frontline workers, middle managers are a critical yet often neglected group. “We’ve layered so many responsibilities onto them,” asserts McKinsey partner Emily Field, who along with partner Bryan Hancock and senior partner emeritus Bill Schaninger wrote Power to the Middle: Why Managers Hold the Keys to the Future of Work. As a result, managers have little time to develop talent. See the latest McKinsey Quarterly Five Fifty for what companies can do to help mend the middle-manager role.
—Edited by Belinda Yu, editor, Atlanta
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by "Only McKinsey" <publishing@email.mckinsey.com> - 11:07 - 7 Jan 2024 -
EP93: Is Passkey Shaping a Passwordless Future?
EP93: Is Passkey Shaping a Passwordless Future?
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Is Passkey Shaping a Passwordless Future?
Google announced PassKey support for both Android and Chrome recently.
Passkeys, also backed by Apple and Microsoft, is claimed to be a significantly safer replacement for passwords.
The diagram below shows how PassKeys work.
Step 1 - create PassKeys
The end-user needs to confirm the account information and present their credentials (face ID, touch ID, etc.).
A private key is generated based on the public key provided by the website. The private key is stored on the device.
Step 2 - sign in with PassKeys on devices
When the user tries to sign in to a website, they use the generated private key. Just select the account information and present the credentials to unlock the private key.
Consequently, there is no risk of password leakage since no passwords are stored in the websites' databases.
Passkeys are built on industry standards, and it works across different platforms and browsers - including Windows, macOS and iOS, and ChromeOS, with a uniform user experience.
How can Cache Systems go wrong?
The diagram below shows 4 typical cases where caches can go wrong and their solutions.
Thunder herd problem
This happens when a large number of keys in the cache expire at the same time. Then the query requests directly hit the database, which overloads the database.
There are two ways to mitigate this issue: one is to avoid setting the same expiry time for the keys, adding a random number in the configuration; the other is to allow only the core business data to hit the database and prevent non-core data to access the database until the cache is back up.Cache penetration
This happens when the key doesn’t exist in the cache or the database. The application cannot retrieve relevant data from the database to update the cache. This problem creates a lot of pressure on both the cache and the database.
To solve this, there are two suggestions. One is to cache a null value for non-existent keys, avoiding hitting the database. The other is to use a bloom filter to check the key existence first, and if the key doesn’t exist, we can avoid hitting the database.Cache breakdown
This is similar to the thunder herd problem. It happens when a hot key expires. A large number of requests hit the database.
Since the hot keys take up 80% of the queries, we do not set an expiration time for them.Cache crash
This happens when the cache is down and all the requests go to the database.
There are two ways to solve this problem. One is to set up a circuit breaker, and when the cache is down, the application services cannot visit the cache or the database. The other is to set up a cluster for the cache to improve cache availability.
Over to you: Have you met any of these issues in production?
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Big Endian vs Little Endian
Microprocessor architectures commonly use two different methods to store the individual bytes in memory. This difference is referred to as “byte ordering” or “endian nature”.
Little Endian
Intel x86 processors store a two-byte integer with the least significant byte first, followed by the most significant byte. This is called little-endian byte ordering.Big Endian
In big endian byte order, the most significant byte is stored at the lowest memory address, and the least significant byte is stored at the highest memory address. Older PowerPC and Motorola 68k architectures, often use big endian. In network communications and file storage, we also use big endian.
The byte ordering becomes significant when data is transferred between systems or processed by systems with different endianness. It's important to handle byte order correctly to interpret data consistently across diverse systems.
How do we incorporate Event Sourcing into the systems?
Event sourcing changes the programming paradigm from persisting states to persisting events. The event store is the source of truth. Let's look at three examples.
New York Times
The newspaper website stores every article, image, and byline since 1851 in an event store. The raw data is then denormalized into different views and fed into different ElasticSearch nodes for website searches.CDC (Change Data Capture)
A CDC connector pulls data from the tables and transforms it into events. These events are pushed to Kafka and other sinks consume events from Kafka.Microservice Connector
We can also use event event-sourcing paradigm for transmitting events among microservices. For example, the shopping cart service generates various events for adding or removing items from the cart. Kafka broker acts as the event store, and other services including the fraud service, billing service, and email service consume events from the event store. Since events are the source of truth, each service can determine the domain model on its own.
Over to you: Have you used event sourcing in production?
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by "ByteByteGo" <bytebytego@substack.com> - 11:37 - 6 Jan 2024 -
Eight priorities for CEOs in 2024
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As leaders kick off the new year, which issues will top their agendas? In our featured story this month, Homayoun Hatami, managing partner, global client capabilities, and Liz Hilton Segel, chief client officer and managing partner, present eight priorities for CEOs in 2024, which include generative AI, outcompeting with technology, the energy transition, geopolitical resilience, and more. Dive into all eight to gain clarity on the big issues in the year ahead, and check out the other highlights in this month’s issue, which include the following topics:
Diversity matters even more: The case for holistic impact
Despite a rapidly changing business landscape, the business case for diversity, equity, and inclusion (DEI) not only holds, but grows even stronger. In our research, we continue to explore the link between diversity and holistic impact.
Download the full report
Carbon removals: How to scale a new gigaton industry
CO2 removal (CDR) capacity is far from the gigaton scale needed to round out businesses’ net-zero efforts by 2050. We explore a mature CDR market’s potential and possible first-mover advantages.
Understand the stakes
Human-centered AI: The power of putting people first
A people-focused approach to AI can transform jobs for the better—and improve performance, too.
Rethink roles
New-business building: A winning strategy in uncertain times
History has shown that building new businesses amid economic volatility is an offensive play that tends to reward companies with higher revenue growth and earnings compared with peers that retrench.
Jump in
Capturing the full value of generative AI in banking
Setting up generative AI pilots is easy; scaling them to capture material value is hard. A recipe for success is emerging.
Follow a plan
Impacts of climate change on Black populations in the United States
Explore how extreme weather can put the prospect of Black livelihood, well-being, and socioeconomic mobility at greater risk.
Adapt and build resilience
What is the C-suite?
Understand the most common leadership roles and how they work together in our McKinsey Explainers collection.
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McKinsey Themes
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by "McKinsey Highlights" <publishing@email.mckinsey.com> - 11:33 - 6 Jan 2024 -
Netflix: What Happens When You Press Play?
Netflix: What Happens When You Press Play?
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This week's newsletter features a chapter from one of my favorite books, Explain the Cloud Like I’m 10.
I am fascinated by our guest author, Todd Hoff’s ability to distill complex topics into simpler discussions. This is one of our inspirations for why we made the ByteByteGo newsletter in the first place.
He’s been a programmer for over 30 years, having worked in Silicon Valley his entire career. He worked with various companies, including NEC, System Industries, IBM, Sun Microsystems, and Yahoo, to name a few.
He also enjoyed teaching database courses and Perl programming during his tenure at UCSC. He ran a blog called HighScalability, covering cloud space in detail.
In this issue, we share background on the book and three full chapters out of the 33 in the book:
For those interested in a deeper dive into other subjects, the e-book is available here.
Netflix seems so simple. Press play, and video magically appears. Easy, right? Not so much.
Netflix UI You might expect Netflix to serve video using AWS. Press play in a Netflix application and video stored in S3 would be streamed directly to your device from S3 over the internet.
An utterly sensible approach…for a much smaller service.
But that’s not how Netflix works at all. It’s far more complicated and exciting than you might imagine.
To see why let’s look at some impressive Netflix statistics for 2022.
Netflix has more than 221.64 million subscribers.
Netflix operates in more than 190 countries.
Netflix has nearly $7.87 billion in revenue per quarter.
Netflix.com generated over 765 million global visits.
Netflix is used by 62% of US households.
Netflix is used by 23% of US adults on a daily basis.
Netflix is responsible for 9.39% of global internet traffic.
Netflix plays more than 6 billion hours of video per month.
Stranger Things 4 crossed 1 billion hours viewed.
Netflix budgeted about $17 billion for creating new content from 2021 through 2023.
What have we learned?
Netflix is huge. They’re global, have a lot of members, play a lot of videos, and have a lot of money.
Another relevant factoid is that Netflix is subscription based. Members pay Netflix monthly and can cancel at any time. When you press play to chill on Netflix, it had better work. Unhappy members unsubscribe.
We’re Going Deep
Netflix is a terrific example of all the ideas we’ve talked about, which is why this chapter goes into a lot more detail than the other cloud services we’ve covered.
One big reason for diving deeper into Netflix is they make much more information available than other companies.
Netflix holds communication as a central cultural value. Netflix more than lives up to its standards.
I’d like to thank Netflix for being so open about its architecture. Over the years, Netflix has given hundreds of talks and written hundreds of articles on the inner workings of how they operate. The whole industry is better for it.
Another reason for going into so much detail on Netflix is that Netflix is just plain fascinating. Most of us have used Netflix at one time or another. Who wouldn’t love peeking behind the curtain to see what makes Netflix tick?
Netflix operates in two clouds: AWS and Open Connect
How does Netflix keep its members happy? With the cloud, of course. Actually, Netflix uses two different clouds: AWS and Open Connect.
Both clouds must work together seamlessly to deliver endless hours of customer-pleasing video.
The three parts of Netflix: client, backend, and content delivery network (CDN)
You can think of Netflix as being divided into three parts: the client, the backend, and the content delivery network (CDN).
The client is the user interface on any device used to browse and play Netflix videos. It could be an app on your iPhone, a website on your desktop computer, or even an app on your Smart TV. Netflix controls every client for each and every device.
Everything, before you hit play, happens in the backend, which runs in AWS. That includes things like preparing all new incoming videos and handling requests from all apps, websites, TVs, and other devices.
Open Connect handles everything that happens after you hit play. Open Connect is Netflix’s custom global content delivery network (CDN). Open Connect stores Netflix videos in different locations worldwide. When you press play, the video streams from Open Connect to your device and is displayed by the client. Don’t worry; we’ll talk more about what a CDN is a little later.
Interestingly, at Netflix, they don’t say hit play on a video; they say clicking start on a title. Every industry has its lingo.
By controlling all three areas—client, backend, and CDN— Netflix has achieved complete vertical integration.
Netflix controls your video viewing experience from beginning to end. That’s why it just works when you click play from anywhere in the world. You reliably get the content you want to watch when you want to watch it.
Let’s see how Netflix makes that happen.
In 2008 Netflix Started Moving to AWS
Netflix launched in 1998. At first, they rented DVDs through the US Postal Service.
Here’s what Netflix looked like in 1999 when they rented only DVDs. (Netflix) But Netflix saw the future as on-demand streaming video.
In 2007 Netflix introduced its streaming video-on-demand service that allowed subscribers to stream television series and films via the Netflix website on personal computers or the Netflix software on a variety of supported platforms, including smartphones and tablets, digital media players, video game consoles, and smart TVs.
Here’s what Netflix looked like in 2008 when they introduced streaming. (Netflix) On a personal note, that streaming video-on-demand was the future might seem obvious. And it was. I worked at a couple of startups that tried to make a video-on-demand product. They failed.
Netflix succeeded. Netflix executed well, but they were late to the game, which helped them. By 2007 the internet was fast and cheap enough to support streaming video services. That was never the case before. The addition of fast, low-cost mobile bandwidth and the introduction of powerful mobile devices like smartphones and tablets has made it easier and cheaper for anyone to stream video at any time from anywhere. Timing is everything.
Netflix Began by Running their Own Data Centers
EC2 was just starting in 2007, about the same time Netflix's streaming service started. There was no way Netflix could have launched using EC2.
Netflix built two data centers located right next to each other. They experienced all the problems we talked about in earlier chapters.
Building out a datacenter is a lot of work. Ordering equipment takes a long time. Installing and getting all the equipment working takes a long time. And as soon they got everything working, they would run out of capacity, and the whole process had to start over again.
The long lead times for equipment forced Netflix to adopt what is known as a vertical scaling strategy. Netflix made extensive programs that ran on big computers. This approach is called building a monolith. One program did everything.
The problem is that it’s tough to make a reliable monolith when you’re growing fast, like Netflix. And it wasn’t.
A Service Outage Caused Netflix to Move to AWS
For three days in August 2008, Netflix could not ship DVDs because of corruption in their database. This was unacceptable. Netflix had to do something.
The experience of building data centers had taught Netflix an important lesson—they weren’t good at building data centers.
What Netflix was good at was delivering videos to its members. Netflix would rather concentrate on getting better at delivering video rather than getting better at building data centers. Building data centers was not a competitive advantage for Netflix; delivering video is.
At that time, Netflix decided to move to AWS. AWS was just getting established, so selecting AWS was a bold move.
Netflix moved to AWS because it wanted a more reliable infrastructure. Netflix wanted to remove any single point of failure from its system. AWS offered highly reliable databases, storage, and redundant data centers. Netflix wanted cloud computing, so it wouldn’t have to build big unreliable monoliths. Netflix wanted to become a global service without building its own data centers. None of these capabilities were available in its old datacenters and never would be.
A reason Netflix gave for choosing AWS was it didn’t want to do any undifferentiated heavy lifting. Undifferentiated heavy lifting is those things that have to be done but don’t provide any advantage to the core business of providing a quality video-watching experience. AWS does all the undifferentiated heavy lifting for Netflix. This lets Netflixians focus on delivering business value.
It took over eight years for Netflix to complete moving from its data centers to AWS. During that period, Netflix grew its number of streaming customers eightfold. Netflix now runs on several hundred thousand EC2 instances.
Netflix is More Reliable in AWS
It’s not like Netflix never experiences downtime on AWS, but on the whole, its service is much more reliable than it was before.
You don’t see complaints like this very often anymore:
Or this:
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by "ByteByteGo" <bytebytego@substack.com> - 11:38 - 4 Jan 2024 -
SmartWaste - Collector Application which is designed for Waste Collector to track and monitor the Waste Collecting Vehicles and Waste Container Location.
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Crafted exclusive applications to address the unique needs and concerns of - Citizens, Managers, and Waste Collector, ensuring seamless management of vehicle logistics, citizen complaints and waste collection processes.
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Webinar: Prompt-Driven Efficiencies in LLMs
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Unlock the Potential of Prompt-driven Efficiencies in LLMs
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We will explore creative strategies for optimizing the quality and compute efficiency of LLM applications. These strategies not only make LLM applications more cost-effective, but they also lead to improved accuracy and user experiences. We will discuss the following techniques:
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Best of ByteByteGo's Newsletter 2023
Best of ByteByteGo's Newsletter 2023
Forwarded this email? Subscribe here for moreIn 2023, we sent out 104 newsletters, featuring a deep dive newsletter on Thursdays and system design fundamentals on Saturdays.
Here is The Best of ByteByteGo's System Design Newsletter 2023. I hope you find something interesting to read.
Password, Session, Cookie, Token, JWT, SSO, OAuth - Authentication Explained - Part 2
Password, Session, Cookie, Token, JWT, SSO, OAuth - Authentication Explained - Part 1
The Tech Promotion Algorithm: A Structured Guide to Moving Up
The 6 Most Impactful Ways Redis is Used in Production Systems
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by "ByteByteGo" <bytebytego@substack.com> - 11:36 - 2 Jan 2024 -
SmartWaste - Citizen Application which is designed for Citizens to track and monitor the Waste Collecting Vehicles operating in their Area.
SmartWaste - Citizen Application which is designed for Citizens to track and monitor the Waste Collecting Vehicles operating in their Area.
Waste collection software offers exceptional transparency, real-time data, and accurate analytics, empowering to take operations to the next level.
Grow sustainable waste collection businesses with SmartWaste Software.
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by "Sunny Thakur" <sunny.thakur@uffizio.com> - 07:00 - 1 Jan 2024
