As if Zynga didn’t have enough problems.
The once dominant game company has been in free fall for years, struggling to make the industry shift from desktop to mobile. One reason for that struggle, it turns out, is the company’s misguided attempts to scale out its own infrastructure, as Zynga CEO Mark Pincus admitted in the company’s latest earnings call.
Sure, some companies—like Etsy—find it advantageous to roll their own data centers. But for most companies struggling to embrace agile, scalable development, the public cloud is the way to go.
Zynga’s Core Issue
To be clear, Zynga’s problems are deeper than its infrastructure. While a company’s hardware and software matters, it’s secondary to actually having products that people want to buy.
Zynga made its mark with games designed to be played on desktop-powered Facebook. But even as Facebook shifted to mobile, Zynga kept spamming Facebook friends with Farmville requests on their desktops.
Zynga’s primary problem, then, was an inability to embrace mobile.
As the company tried to make the shift to mobile, however, its infrastructure did it no favors. As Amazon Web Services data science chief Matt Wood told me in an interview:
Those that go out and buy expensive infrastructure find that the problem scope and domain shift really quickly. By the time they get around to answering the original question, the business has moved on.
While Wood was speaking of solving tough data science problems, the same principles apply to IT infrastructure, generally. When you build out a data center to solve particular problems, you’re stuck with infrastructure that may not suit itself to new business challenges that arise.
Like, in Zynga’s case, mobile.
Paying Someone Else To Scale
Which is why it’s not surprising to see Zynga do an about-face on its decision to abandon AWS for its own data centers. As Pincus told investors:
When we think about scale, we[‘ve] got to think about where we want to get scale. And we want to get scale in places like data and analytics where we need to be world class in order to arm our game teams to deliver the most value for our players. There’s a lot of places that are not strategic for us to have scale and we think not appropriate like running our own data centers. We’re going to let Amazon do that. So what we’re really trying to do here is have scale where it can give us a real leverage across our product teams and not maintain scale that we really can’t justify.
Or, as the WSJ’s Robert McMillan writes:
When Zynga built the data centers, it bet that it could operate them more cheaply than paying Amazon. But squeezing better price performance out of a city block of servers turned out to be a tricky proposition.
As mentioned, Etsy and others have gone against the cloud tide and seem to be making it work. Etsy CTO Kellan Elliott-McCrea told me that the online marketplace has discovered “very real cost savings” and higher utilization by running in its own data centers.
But Etsy is the exception, not the rule.
The “rule” looks increasingly like AWS, wherein we pay public cloud providers to ensure elasticity and scale at a reasonable price. As mobile, Big Data, and other trends roil existing enterprises, savvy companies will build agility into their IT infrastructure, allowing them to easily experiment with new apps and new approaches.
Photo by Robert Scoble