
DigitalOcean Raises $83M in Series B Funding - beigeotter
https://www.digitalocean.com/company/blog/series-b-funding-writing-a-new-chapter-in-the-digitalocean-story/
======
dotBen
DO has really benefitted from Linode stalling over the past few years. I
admire Linode for remaining a bootstrapped business but it feels as though the
owners lost their fighting spirit and energy... Perhaps because the small pool
of Linode owners felt they made enough money already.

DOs announment talks about a storage product, which is strategically important
and crucially something Linode has sorely needed for a long time. And yet the
biggest development in recent years at Linode has been a proprietary stats and
monitoring system built as an upsell, which doesn't really do anything
distinctive that Nagios or another package couldn't provide.

Instead Linode is now switching their entire platform from Xen to KVM, a
curious move which will create risk and cost velocity that could have been
spent on product development.

I have been a huge supporter of Linode over the years, and the startup I co-
founded is one of their biggest customers, but at this point DO seems like the
winning horse to back.

~~~
astrodust
For all the money Linode has on hand, and the size of their technical team,
it's absolutely insulting they haven't made any tangible improvement to their
management front-end in at least five years, if not more.

The way it's behaving it's as if it was acquired and kept on life-support.

~~~
Mahn
For what is worth, I've been a Linode customer for a few years and never
really felt their management front-end was in urgent need of an update. It's
solid and does the job for us. My only complains to be honest are 1) the lack
of storage dedicated nodes, as OP points out, and 2) the price, it gets very
expensive very fast as you scale and spin more nodes.

We are currently considering moving to dedicated machines but only because of
2), otherwise we would happily be their customer for life.

~~~
threeseed
> never really felt their management front-end was in urgent need of an update

Even when it was hacked multiple times and customer VPSs compromised e.g.

[http://arstechnica.com/business/2012/03/bitcoins-
worth-22800...](http://arstechnica.com/business/2012/03/bitcoins-
worth-228000-stolen-from-customers-of-hacked-webhost/)

Nothing is worse than spending weeks securing every aspect of your VPS only to
have incidents like this appear. And worst of all ? To this day Linode never
clearly said what happened or what they did to prevent it happening again.

~~~
mumphster
Not sure why this is being downvoted but the whole Linode hack incident was a
huge factor for me to switch all my VPS's over to digital ocean.

~~~
brobinson
I went to Vultr. DO's interface is just as bad if not worse than Linode's. :(

~~~
lugg
Its not that bad, it has been updated frequently though. Seems to be getting
better.

I do remember it being quite lacking back in the day.

~~~
brobinson
I haven't used DO since 2013 and I probably won't since I'm extremely happy
with Vultr, but it's good to know that it's been improved!

------
chrismarlow9
I used digital ocean for a while. My experience was bad reliability and random
technical issues. I had various very experience ops people verify with me that
it wasn't an issue I introduced into the systems running.

I went back to dedicated servers at a smallish provider and forgot how nice it
can be to not have all the cloud virtualization stuff get in the way. It's
just too fragmented among providers in the way they setup for me to use the
service and not have a fear of lockin. Does it take me 3 or 4 days to get new
boxes? Yes. Is it causing a massive headache for me? No, because I plan things
and order them ahead of time.

Just my 2 cents, I know others who use DO and love it.

~~~
wooyi
Same experience here. A few of my developers migrated our servers to DO 2
years ago to "save" a few hundred dollars. Turns out DO has planned downtime
every other month and its cost us 100x more in staff and headache dealing with
them. You can't run a SaaS or anything that requires uptime reliability (ie,
any sizable business) . I've transferred our main site back to AWS. Also AWS
dedicated pricing is now almost the same as DO, and much more reliable.

But congrats to the DO team. They will only get better.

~~~
joshburgess
So, Digital Ocean doesn't have great reliable up time then? I've been using
OpenShift's free hosting tier to host a Ghost blog, and it goes down
CONSTANTLY, making it unusable. I was about to start paying the $5 a month
plan with Digital Ocean, but I'm not going to if it also goes down frequently.

~~~
hrrsn
hrrsn@lillith:~$ uptime 15:13:16 up 233 days, 20:35, 1 user, load average:
0.00, 0.01, 0.05

YMMV, but I've had zero issues with DigitalOcean's reliability. This is a VM
that has been running since I spun it up.

~~~
pharaohgeek
I agree. Our site, [http://www.gurufoo.com](http://www.gurufoo.com), has had
ZERO issues with reliability. Continuous uptime, no outages. Very happy.

------
icpmacdo
I wonder if the this pushes there valuation over 1B, if so I think that means
that Techstars is the first accelerator outside of YC to produce a unicorn.

Personally I hope so, Digital Ocean is a great product and I think one of the
really smart things they did was be generous with there free credits as it was
at least a great way for me to get on there platform and later on drop a fair
amount into hosting with them.

~~~
seiji
Is _unicorn_ just a billion dollar non-public startup? Isn't there some other
magic sauce required like supernormal margins or superfew employees or
exploiting toothless regulations?

DO seems to be almost a _too_ straight forward business model (buy servers,
rent servers in sub-units) to be considered in the modern startup pool of
wishful thinking. I mean, it's not like they're an iPhone app for renting
other people's idle server space on demand. Now that would be a game changer.

~~~
proksoup
DO's UX is a game changer, I personally think is why they have been so
successful in what seemed like a crowded market with the "same" business model
as the others.

~~~
seiji
Yeah, the simplicity is great. AWS has 80 products and it takes months to
figure how how they all work together. DO's click-n-go for $5 month helps just
from a mental clarity point of view.

At this point AWS is so complicated they should be offering an official Cisco-
like series of certifications.

~~~
samhoggnz
I'm not sure they're at the level of Cisco, but they do have certifications.

[http://aws.amazon.com/certification/](http://aws.amazon.com/certification/)

~~~
seiji
Oh, great to know. They are really cheap too ($150, $300, $75 re-up).

Amusingly, that page demonstrates the need for an AWS certification in the
first place: the page has over 100 things trying to grab your attention with
no focus or clear direction at all. Amazon as a corporate entity seems to go
for "maximum information + maximum confusion" in their UX at every turn.

Always worth a re-read:
[https://gist.github.com/chitchcock/1281611](https://gist.github.com/chitchcock/1281611)

~~~
res0nat0r
AWS is an inherently complex product. It has far and away more features than
any other competitor, so there is obviously going to be more confusion. I
think the AWS dashboard is getting better and better and relatively easy to
use if you keep each product isolated. There being 40+ products to choose from
is overwhelming if you don't know what you are looking at, but that is the
nature of the beast.

------
buckbova
I've got two droplets now, one for email/owncloud and another for personal
projects with automated backups. It's pretty easy to use, but I worry I don't
have the sysadmin chops to keep it secure.

Edit: I followed tutorials on auto-updating packages through cron, securing
ssh, and setting up ufw for only services needed when I set it up. It's been
about 2 years now so maybe I shouldn't worry.

~~~
angersock
Would anybody be interested in esoteric hosting?

Think Linode, but specifically for
FreeBSD/OpenBSD/Plan9/TempleOS/MinuetOS/etc.?

~~~
talloaktrees
TempleOS has no networking :)

~~~
tantalic
Which makes it that much cheaper to operate ;)

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joeyspn
I've been with many VPS providers: KnownHost, RackSpace Cloud, OVH, Linode,
etccc and DO has been a pleasure to work with because of all the integrations
and tooling it has due to the increasing popularity/community.

I think this is a great step for a transition from a "developers cloud" to a
"production cloud". I hope they continue to go in the same direction and soon
offer multi-container blueprints as easy to deploy as their pre-built images.

0.02

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NiftyFifty
My only question, is the investment rounds the new form of private equity
bubble fixing? How diversified are these investments and how does the
interoperations of a company get changes to meet the revenue influx to ROI? I
never really got this jist and how culture DOES change by these rounds. The
pitches must damn near printing money kind of stuff made of magic Mike XXL and
pixie dust to stick.

------
vruiz
> The $83 million is going directly into growing our team and expanding our
> product offerings with networking and storage features.

Great to hear. Real private networking, object/shared storage and most
importantly HA (IP failover/load balancing) is all DO is missing to start
really competing with AWS for "big business".

~~~
brianwawok
I don't think HA is really on the needed list, seeing as you can roll your own
load balancer in 5 minutes using provided tutorials. I mean I guess they could
make an image for it to make it a little easier.. The AWS elastic load
balancer is really nothing fancy.

Real private networking and object shared storage are both huge for sure
though.

~~~
CoachRufus87
How is their current private networking offering not 'real'?

~~~
brianwawok
Any other digital ocean server in the same datacenter can hit your private IP.

~~~
CoachRufus87
Would you consider that to be a big enough risk to not deploy production apps
in their environment? I.e. having your app on 1 droplet and a dedicated db on
another. I'm new to ops and trying to learn all that I can :)

~~~
brianwawok
I do this in prod, you just need to take extra steps to protect. i.e. make a
firewall rule on the database to only allow access to the database port on
your private network card, from your specific web IPs (and make sure the
traffic is encrypted).

~~~
jlgaddis
I'd probably create static ARP entries as well.

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3pt14159
> expanding our product offerings with networking and storage features

I'm so excited for this. I'd previously commented about how the lack of non-
SSD storage meant I had to screw around with S3 when I really just wanted to
keep everything on DO.

Great company. Been with them for two years now, and couldn't be happier.
Combined with Cloud66 I worry less about deployments and servers and backups,
and more about just getting the code out.

------
alberth
Has anyone used Vultr.com?

I ask because they have all the same features as DO + way more (e.g. dedicated
hosting w/ same great panel, BYO ISO, etc).

~~~
username
I am also curious about this. The fact that Vultr accepts Bitcoin as payment
further piques my interest. Can anyone shed some light on their performance
and convenience vs. DigitalOcean?

Edit: Found this [http://blog.due.io/2014/linode-digitalocean-and-vultr-
compar...](http://blog.due.io/2014/linode-digitalocean-and-vultr-comparison),
which seems to portray it quite favorably.

~~~
alberth
This doesn't compare against DO but it does compare performance against
Rackspace and AWS.

[https://www.vultr.com/benchmarks/](https://www.vultr.com/benchmarks/)

~~~
grigev07
Slightly objective performance comparison if you ask me. Obviously Vultr is
going to say they're better than the competition.

------
usaphp
I've been using RackSpace for couple years before moving to DigitalOcean, I've
had a good experience with Rackspace when I started but my bills kept growing
and server started to have constant issues every now and then, so I've decided
to move to DigitalOcean couple years ago. My traffic since then grew quite a
lot from 100K/month to around 1 million visitors/month and my bills from
DigitalOcean are still not much higher than they used to be at the later
stages on RackSpace, and performance is much better for me with DigitalOcean.

The only thing I dont like about DigitalOcean droplets is the requirement to
shut off the server before resizing, Rackspace allowed me to do it without a
need to shut it off.

------
arca_vorago
Slightly offtopic, but I am curious if anyone has any insights into the legal
side of hosting profit seeking services on top of VPS's in general. Is the
boilerplate contract(s)/eula/tos good enough generally or do you seek to
actually make changes to a custom one?

What about hosting websites vs reselling access for some other purpose (eg.
similar to game hosting services that allow full customer control of the
instance?)

It seems to me like there is a lot of room for a tool that can spin up an
instance over multiple VPS providers, because sometimes one will have a colo
close to where you want and sometimes another will.

Anyone aware of comprehensive location based benchmarking of all the VPS's?

~~~
muraiki
There are some libraries you can use to abstract away differences between VPS
providers:

[https://jclouds.apache.org/](https://jclouds.apache.org/)

[https://libcloud.apache.org/](https://libcloud.apache.org/)

[https://developer.rackspace.com/blog/gophercloud/](https://developer.rackspace.com/blog/gophercloud/)

[http://www.openstack4j.com/](http://www.openstack4j.com/)

For playing with JVM stuff I found openstack4j easier to use from Scala and
Clojure than jclouds.

I didn't downvote you, but I figure someone thought you were too off topic.

------
rayalez
I love DO.

I'm a novice/intermediate programmer, and when I knew nothing about what VPS
even was I started using Linode(due to many great recommendations).

Linode is a great service, but recently I've switched to DO and I like it so
much more. As a person who just needs a simple and straightforward way to put
several django projects online - DO offers me a simple and beautiful
interface, cheaper prices, and a lot of great and extremely useful tutorials.

It is much nicer to use and a droplet price starts from $5/mo, which is
freakin' awesome, and all I need from VPS service at this point.

Thank you guys, you are great, keep it up!

------
Killswitch
Great work Ben and team! I've been a customer for 2 years now, absolutely love
the service and see no reason to leave it.

------
ape4
I'd like a harddrive option. To get a large amount of storage is way too
expensive.

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lsc
hm. Interesting. From what I know of the industry, their size and pricing, I
would have thought they would be profitable enough that raising this sort of
money wouldn't be particularly interesting.

Does this mean that they are operating at a loss?

~~~
carbocation
There are many reasons to raise money. They may be operating at a loss but
with growth in recurring revenue such that they expect to become profitable in
a few years. But I wouldn't be surprised if they are raising this money to
fuel an already growing fire, either by enhanced sales teams or even building
out new capital projects that will open new revenue channels or create
barriers to future competition.

------
r0naa
I love DO, they are doing great work. The only thing I regret is the
relatively poor choice of platforms they support.

For example, there have been a really big demand for NixOS for two years now
but still no announcement whatsoever.

~~~
nailer
Really? Do you have some stats on NixOS growth to support that?

~~~
r0naa
[https://digitalocean.uservoice.com/forums/136585-digitalocea...](https://digitalocean.uservoice.com/forums/136585-digitalocean/suggestions/4349028-support-
nixos-image)

One of the highest voted customer feedback on their official forum.

------
bpg_92
Well to be sincere, DO is implementing features most people actually care
about. Working charms, it still has a long way to go :)

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ablation
I'm pleased for DO. Seems like a decent company doing things well. I've never
had a complaint with their services.

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curiousjorge
it's pretty amazin what they've managed to do, what was essentially an over
saturated market, they've managed to pull ahead of incumbents like linode.

~~~
pki
how much do you think giving away huge amounts of free credits helped?

------
gshakir
If all goes well, looks like they might be competing directly with AWS soon.

~~~
nosequel
They aren't even in the same ballpark. Hell, Google isn't even in the same
ballpark as AWS and Google made $83million in the time it took me to read the
article. DO is great, but doesn't belong in the same sentence as AWS.

~~~
brianwawok
Azure is closest I think. Enterprisey cloud hosting.

~~~
Beached
my goodness, I was reading through this entire thread and all I was thinking
about is "How come no one is mentioning Azure".

I have tried Azure, AWS, and DO, and by far the most stable and usable one is
Azure. I thought I was the only one who thought Azure was good...

~~~
brianwawok
Most people here (including me) are not windows people, so Azure is obviously
not going to be the first place we look to.

They have linux VMs which is cool, but still not sure I would pick them.

