InformationWeek has a nice profile of Netflix's massive, global use of IaaS on Amazon Web Services, instead of building its own data centers.
It allows "Netflix to try using large data center resources, fail at it without paying a heavy penalty in unused gear because it was only rented by the hour, then try again. The ability to execute a rapid, iterative testing of ideas "[gives] us an ability to try things out, even more than our own data centers would,"
"Netflix found there was no performance advantage to using servers in Brazil, which were farther from Miami than AWS's East Coast servers. It reverted to serving South and Central American through its hundreds of servers in Northern Virginia because "it made sense to serve them out of U.S. East," said Cockcroft (ex Sun and eBay)
European customers, on the other hand, could be more efficiently served out of AWS's Dublin, Ireland, data center. AWS services in Dublin are slightly more expensive than those in U.S. East, but reducing latencies for customers was worth the increase, he said. Netflix launched a 1,000 virtual machine footprint in Dublin, using the same procedures and same APIs to which it was already accustomed. "Everything just worked," he said."
"And while it's commonly viewed that Netflix is dependent on AWS for vital services, Varia (of Amazon) said at the start that AWS relies on Netflix to educate it about meeting a large, demanding customer's needs. "Adrian and his team challenge Amazon Web Services in every way. They help us to make AWS better," he said.
More on Cockburn's own assessment of risk of dependence on AWS in this ZDNet post
Slide below from a Cockburn presentation at AWS Re:Invent November 2012 touches on one of the AWS outages