
DigitalOcean Receives $50M in Funding - denis1
http://www.businesswire.com/news/home/20141209006143/en/Fast-Growing-DigitalOcean-Receives-50-Million-Expand
======
gedrap
I really like the content marketing approach DO took.

If you google for some standard server maintenance problem (e.g. migrating
from Apache to nginx), it's usually DO which is ranked first. Their posts are
relatively high quality, and there are a lot of them, enough to cover many
common problems. For example:
[https://www.digitalocean.com/community/tutorials/how-to-
migr...](https://www.digitalocean.com/community/tutorials/how-to-migrate-from-
an-apache-web-server-to-nginx-on-an-ubuntu-vps)

It doesn't show annoying pop ups, anything like that, but after visiting those
pages many times you might decide to give DO a go. Well, that's what I did.

Also, some people say that similar cheap VPS providers exist for a long time
and what DO did was put a nice simple UI. That proves that to create a
successful product, you don't need some new complicated features that your
competitors do not offer. Making interactions with the system easier,
improving user onboarding process by reducing friction can go a long way.

~~~
jtolj
I think it was Slicehost that pioneered this approach for VPS hosting
companies quite a while ago, although it may also have been Linode as I really
didn't become aware of them until Rackspace bought Slicehost and I had to
migrate.

~~~
veeti
Slicehost had it first, then Linode followed.

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peterjancelis
Maybe the title can mention that this 50 million is a credit facility, not
equity funding.

~~~
INTPenis
So what is that to us who don't speak English natively, a loan?

~~~
InclinedPlane
Yes, it's money now in exchange for money in the future, vs money now in
exchange for ownership.

~~~
denis1
Wouldn't this be a better deal than money in exchange for ownership? I mean,
they get the money and still have control of the company.

~~~
lukasm
Companies take debt to optimise tax.

~~~
edwinyzh
Well, I need to ask what does this mean, I appreciate it if anybody can
explain in with an example :)

~~~
mynegation
The better wikipedia article would be
[http://en.wikipedia.org/wiki/Tax_shield](http://en.wikipedia.org/wiki/Tax_shield)

Debt itself (as a liability) is definitely not deducted from profit, but
repayment of debt is deducted from the profit, and - what is more important -
interest on debt is deducted from the tax base as a result. Which means that
if you can load up on debt to get higher return, than you would get investing
your own money.

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butwhy
It blows my mind that this is happening. Back in the day, there were a
thousand cheapo VPS providers out there with similar rates. But DO were the
ones to put up an extremely simplified interface to spinning up VMs and that
has seen them skyrocket (I'm not saying this is a bad thing).

At the end of the day, I feel sorry for linode. The guys who offer a much
better service (in almost every way) and are often overlooked by many
customers.

~~~
Igglyboo
Why is Linode so much better? I got a bunch of free credit for DO and I'm only
using it for small things so I went with them, thinking about spinning up
larger projects however and would like to look at my options.

~~~
adventured
The only thing I'm aware of that, supposedly, made Linode better, is they
guaranteed full compute power. If it said you got 1 CPU core, then that was
yours, period. From what I understood with DO, their approach was that they'd
make every effort to deliver the equivalent compute power of 1 CPU, but would
not peg it to you exclusively. I also think this may have changed for DO.

~~~
Donzo
I've been following my DO allocation using New Relic. When I first signed up,
I noticed the hypervisor stealing from my allocation. Not a lot, but some.
After a week or two, however, this ceased. I can now report that for almost a
year now I have been receiving my full allocation. I am very pleased with DO,
but based on the good things that I've read on here, I'll give Linode a shot
if DO ever drops the ball horrendously.

~~~
icelancer
What's the best way to check allocation theft using NR?

~~~
Donzo
I'm not sure of the best way, but I was able to tell by looking at the CPU
usage chart when you are analyzing your server. The brown line indicates
resources stolen by the hypervisor.

There's probably a better way to find out...

~~~
icelancer
Good enough, will test. Thanks!

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paukiatwee
Recently one of my production node landed on a bad physical host, DO reboot my
node twice within 24 hours, I tweeted about it and DO support open a ticket
for me.

Since the physical node have problem, I plan to take snapshot then spin up a
new node using the image. However, as the physical node have problem, the
snapshot take more than 7 hours and still failed to snapshot (No way to cancel
snapshot task).

DO support told me the snapshot is running, but I seriously think their
support not honest about it and I ask they provide proof to show the snapshot
is moving, they failed to do so. (From UI I can see JSON response show
progress stuck at 3%, they lied)

Yesterday, DO reboot again my node.

Just my two cent, never ever use DO for serious production usage.

~~~
ghshephard
Alternative perspective - Recognize any time you use a cloud provider, you
need to be aware that not only are the nodes ephemeral, but the zone/data
center you are deploying on may go down as well.

Plan for your server to go down at any time, and, if you have actual $$$ in
play, also plan for the zone to go down.

Amazon encourages this thinking by having very low-latency links between AZ
(Availability Zones) - and they also recommend deploying in two geographical
regions should a regional disaster occur.

~~~
paukiatwee
I know that all. The point is, DO support lied. After reboot, they still put
my node in bad physical host. Also, DO reboot without notice (AWS have EC2
events).

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wambotron
I use and enjoy DigitalOcean. Good community docs, good support all around.
I've referred a few people to it as well. I'm hoping they keep their
support/pricing even if they get big.

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jetskindo
Is digital ocean profitable ? Is the 5 dollars server killing them or putting
them on top of chart ?

~~~
blfr
OVH offers KVM virtual servers with SSD starting at $2.5/mo[1], and announced
they will have an even smaller $1.25/mo plan[2]. All that with more memory
than DO.

I'm guessing that VPS providers have a low support cost/customer compared to
shared hosting. No hairy compatibility issues, everything is neatly abstracted
away, everyone has their own, independent environment with most of the
administrative tasks offloaded onto the user.

After you toss in a few guides that double as marketing, and are usually
written by the users themselves, all that's left is to take care of the
hardware and bill.

[1]
[https://www.runabove.com/index.xml#compute](https://www.runabove.com/index.xml#compute)

[2]
[https://twitter.com/olesovhcom/status/524334437039747073](https://twitter.com/olesovhcom/status/524334437039747073)

~~~
fizzbatter
Is there anything inherently different (security, performance, or otherwise)
about these servers of Runabove's?

I run a fair amount of dev servers, and that price ($2.50) is mind blowing.
But i fear that it's far too cheap to be anything but a letdown.. Thoughts?

~~~
blfr
They're based on OpenStack where DO rolled out their own system, I believe. On
the upside, you can use all the CLI tools (nova, etc) that come with
OpenStack, existing software should be compatible, and you get some of the
additional cloud features (object storage, security groups). On the downside,
the panel isn't as nice. The "expert mode" is just OpenStack's Horizon.

But the servers, the instances themselves, are not really any different. I
benchmarked the cheapest one for ServerBear[1] a few days ago.

The one thing I miss is IPv6. DO is ahead here.

Would it be OK if I plugged my referral link[2]? With it, you get $10 to test
things out.

[1]
[http://serverbear.com/benchmark/2014/12/09/ZyiLDuXgJGD577Eo](http://serverbear.com/benchmark/2014/12/09/ZyiLDuXgJGD577Eo)

[2] [http://runabove.me/QEME](http://runabove.me/QEME)

~~~
GrinningFool
I was going to sign up, but halfway through realized I can't do it without
actually providing a payment method (in spite of the credit). I hope you got
the $10 credit for my initial sign-up though.

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tim333
It'll be interesting to see if the Mesosphere thing takes off. It seems to be
up and running with a 10 instance cluster for 30c/hr.

[https://news.ycombinator.com/item?id=8521311](https://news.ycombinator.com/item?id=8521311)

[http://thenewstack.io/mesosphere-now-supported-on-digital-
oc...](http://thenewstack.io/mesosphere-now-supported-on-digital-ocean-for-
scaling-and-managing-apps-without-devops-hell/)

------
jawngee
Awesome, maybe now they can afford to accept debit cards.

~~~
morganvachon
I never had a problem paying via debit card when I used them. I don't have any
active droplets with them right now, but I've always paid with my bank issued
debit card, and looking at it now it's still the active payment method on my
account.

