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DigitalOcean is laying off staff

816 points by progapandist 7y ago

wgerard 7y ago
This sucks. I really want DO to succeed because I love their offerings - whereas I occasionally feel like I really do need to RTFM in depth for many AWS offerings (even EC2), DO seemed to just work. That being said, and I can’t put my finger on why necessarily, it sometimes feels a bit like Heroku - the thing you use before you “graduate” to just using one of the major cloud providers.
- spectramax 7y ago
  They're not shutting down or winding down. I am guessing that they hired a lot of people to start building an AWS competitor which is a steep battle (even with funding) and goes against the grain of DO philosophy - keep things simple and target DO for small-medium businesses (sub-100 employees). Investors went into DO thinking of a AWS/GCP/Azure unicorn, but after 6 years it appears to be a small rainbow pony than an almighty unicorn. This restructuring appears to be a realization of what happened with that vision and how it panned out, I may be wrong though. I personally love DO, I don't want to deal with AWS complexity for basic needs. Minimalism and simplicity certainly has value.
- gist 7y ago
  > I really do need to RTFM in depth for many AWS offerings Agree. But I think part of the plan with Amazon et al is that those who RTFM are locked in to the platform and therefore will be less likely to switch.
- kbar13 7y ago
  past a certain point you want your provider to do more and more for you (more features). like you mentioned, AWS is complex but they do pretty much everything for you. I've built systems that are just glued together AWS services.
  - wgerard 7y ago
    totally, and people who know the ecosystem well are extremely productive at getting things up and running. Definitely a skill floor/ceiling thing going on.
  - toast0 7y ago
    My experience is the opposite, for less critical systems, it's fine for the provider to do everything; as things get more critical, I want more control. At that point, all I need from the hosting provider is a server that stays up with a network that stays up. And contacts to skip bullshit triage when the network is broken and their monitoring doesn't show it.
- gazelle21 7y ago
  Its funny you mention that, I had the same thought comparing it to Heroku, can't quite put my finger on it why that is.
- whitepoplar 7y ago
  Perhaps because they don't heavily advertise large anchor customers? Sure, there are a bunch of brands on the front page, but that doesn't tell you whether they run 100% on DO or if they maybe used DO once for a side project. Digital Ocean needs a "Netflix", or at least more publicity around how their existing whales use their offerings.
- deleted 7y ago
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- avree 7y ago
  It's funny—my experience is pretty much opposite. At a certain scale AWS will provide really world-class support beyond just troubleshooting. DO forwards you to (granted, fairly in-depth) documentation an expects you to read it and engineer your own solutions.
  - wgerard 7y ago
    totally. I mentioned this in another comment but it feels like a skill floor/ceiling thing to me. AWS/etc heavily reward you for investing time/money/etc but can be a bit more difficult to get started with without investing resources immediately, whereas DO is very easy to get up and running on but can be difficult when you encounter anything more complex.
  - bberenberg 7y ago
    Are you over $500/month spend with DO? They offer a different tier of support at that point which has been solid in my experience.
  - iudqnolq 7y ago
    As an on-and-off DO customer learning how to use Linux I find the documentation they've creates (payed ICs to create, I think) extremely useful and consistently of decent quality. When I see them in a Google search for an issue I'm always excited.
- djsumdog 7y ago
  Digital Ocean is pretty similar to Vultr: they offer a straight easy API for starting up VMs and managing DNS (I've written a tool that uses both of their API[1]; been meaning to do a post on the differences). It's kinda nice because you're just putting up VMs and there's not the type of vendor lockin you get with AWS/Azure/Google. That being said, DO is obviously trying to compete on that scale now. It has managed databases to compete with RDS, load balancers, and even managed k8s. They want to be a real AWS alternative, but when you start building around these components, you get locked in. If they're laying off people, it could adversely affect startups thinking of building around their services. And for people who think "Well I can just use another terraform provider" .. it really is not that simple at all. AWS/Azure/Google/DO are all very different. They have vastly different terraform providers/modules and you're pretty much writing an entirely new setup per each provider because of they way they handle firewalls, security, IPs, inbound-outbound, etc. The OpenStack API or any type of real standard has yet to emerge that branches all these offering. If you want "cloud" hosting (and most do because managing your own Postgres/MySQL clusters with backups and failover is a fucking bitch; especially if you're just starting out and want to get going fast), you need to realize you might need to be locked in very early in the game. [1]: https://github.com/sumdog/bee2/tree/master/lib https://github.com/sumdog/bee2/tree/master/lib
  - tanilama 7y ago
    > They want to be a real AWS alternative They can't. Too small to grow big.
  - timfrietas 7y ago
    You mean Vultr is pretty similar to DO :) When I worked at DigitalOcean all we could do was shake our head and laugh at how blatantly hard Vultr tried to copy what we did.
    - djsumdog 7y ago
      Yes, that's what I meant. :) DO did come first and Vultr pretty much copied everything with lower prices; but DO has matched a lot of those prices since then as well.
- chadlavi 7y ago
  I feel like that "this is not serious enough" feeling is an ironic result of the fact that they have such good UX.
  - closeparen 7y ago
    DigitalOcean has always been great place to host single-server Rails/Django/PHP app. But support for more complex backend infrastructures targeted by the cloud providers, with network segmentation and load balancers and autoscaling clusters, has only started to grow in recently. There is nothing approaching any cloud provider's IAM.
    - apple4ever 7y ago
      I’d love to get a network segmentation option in DO. IAM is a big no though.
  - davnicwil 7y ago
    Not sure if it's applicable in this case as I'm not a DO user, but this is definitely a thing. For instance, think about web forms for anything 'official' - it's almost as if the worse the UX is, the older the tech it seems to be built on even, the more legit it seems. It's a really counter intuitive effect.
    - ludamad 7y ago
      Then you find out about some guy in Japan accessing the web form via fax. What people don't often talk about old stuff is the long tail ecosystems compatible with it
      - davnicwil 7y ago
        Oh completely agree, not at all saying using old tech is bad in any way and it's completely clear why offical public service stuff prefers it. Just saying it's interesting how this then makes old-looking stuff seem more official, because you're used to everything official generally looking about 10 years old.
- robohoe 7y ago
  I really like DO's blogs/documentation. Fairly easy to get into versus AWS. On another hand, AWS has a very broad product offering with very broad documentation - some hit and miss though.
- amerine 7y ago
  Help me understand that “graduate” off sentiment towards Heroku? (Full disclosure: I work on Heroku for Salesforce).
  - cloverich 7y ago
    (similar boat, use Heroku and some GCP in production for work) -- Heroku is great. But it is a bit limited and very expensive. It feels w/ modern cloud platforms you get something comparable with a little more flexibility for only a little more technical burden, _iff_ you have the chops. GCP / AWS are starting to encroach a bit w/ offerings like Cloud Run, I feel like they are one quality PM away from making a Heroku for Google type product that is a bit more powerful and a bit cheaper than Heroku. Conversely, I also feel like Heroku could round out their offering just a bit more (ex: built in robust monitoring and alerting, better deploy notifications and healthchecks, a simple custom metrics system) and really lock in that "premium basic" tier that would be perfect for most small to medium businesses.
    - LifeIsBio 7y ago
      Yea, I would second this. I've always enjoyed Heroku, but feel like I'm paying a premium because I don't know enough to do "real" cloud work. "If I were a more experienced developer, I could run this on AWS for pennies on the dollar". Honestly, I don't know where that sentiment comes from exactly. It's at least partially coupled with the fact that all of add-ons you would need to pay for to run a small business site add up pretty quickly, from what I can tell.
  - wgerard 7y ago
    Hey! Totally. I meant that Heroku is incredible for bootstrapping projects, but as time moves forward I usually find myself migrating services from Heroku to just run on AWS directly. There's some friction with AWS (e.g. SSL termination) that Heroku makes incredibly easy, so I usually don't migrate until it's clear that a service is going to continue to exist in the medium term - otherwise the investment isn't worth it. Didn't mean to imply that was a widespread sentiment, of course! Just my personal one.
gist 7y ago
> DigitalOcean continues to be a high-growth business with $275M in [annual recurring revenues] and more than 500,000 customers globally. Under this new organizational structure, we are positioned to accelerate profitable growth by continuing to serve developers and entrepreneurs around the world.” If not obvious this can be translated as positioning the company so it can be acquired by a larger entity for it's customer base and remaining employees. > It says it works with more than 1 million developers across 195 countries. I always love marketing statements like this. For sure 1 million is a large number. But what makes someone a 'developer'? It's not something defined like 'Physician' or 'Pilot' or 'Attorney' which require some type of certification to use the title. To DO (in terms of the marketing) a 'developer' is almost certainly only someone who signed up for an account and perhaps (as with other web properties) multiple accounts. (I have used DO and was happy although I don't have a need for what they offer anymore).
- deleted 7y ago
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- fareesh 7y ago
  If they're counting accounts it's definitely much lower. Our firm manages web applications / web services / websites for multiple clients and they all have their own DO account and there isn't 1 developer per account. We were pretty excited to become part of their partner program but after signing up we realized that if we onboarded new clients we'd have to do it all under a single account, which sadly doesn't work for us because extremely delayed payments are very common, and we'd be fronting hosting costs for everyone.
dothrowaway 7y ago
(Throwaway, obviously) I'm a DO employee on the tech side of the house. According to the CTO, the primary reason for this was actually reorg, not financial though that obviously played a part. Mostly managers got cut, with the goal of flattening the org. I'm keeping my ear to the ground but it doesn't seem like there's going to be more cuts any time soon at least. Apparently we're still hiring a ton this year, so that jives.
- irjustin 7y ago
  Thanks for the info and best of luck. Re-orgs are hard as the company is trying to find its new identity in the new structure. I love DO and what it stands for. Sadly, I don't use it outside of personal pet projects.
- tempsy 7y ago
  no offense but I wouldn't take your CTO's word at face value. you need to watch out for your own interest, including looking at other opportunities, even if it's just to keep yourself top of mind to others if something happens
  - dothrowaway 7y ago
    Agreed fully. I always have an escape strategy in mind if things go south, but I'm pretty bullish on DO right now. That could always change, certainly.
    - deleted 7y ago
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    - tempsy 7y ago
      curious what makes you bullish? i'm a total outsider but it does feel like the walls are closing around smaller players as the big get bigger.
      - op00to 7y ago
        Digital Ocean gives me peace of mind. Unlike Amazon or Google, I am confident I'm not going to get a $300k bill from DO overnight.
rgbrenner 7y ago
Everyone is seeing this as negative and a warning sign for DO... but they're an 8 year old privately owned company that has raised over $300m. The last time they obtained funding was a 130m credit line in 2016. It's been 4 years since then... and if they're still losing money, they likely need to either make this profitable, or they're going to need to raise more money. If they're close to being profitable (likely given their past fund raising, and how long its been), why would they want to sell more of their business? They may also want to finally go public. 8 years is a long time to wait for a return. And it seems to me the stock market is tired of these unprofitable unicorns doing IPOs (at the moment anyway).
- ttul 7y ago
  You could also read this as: Digital Ocean raised a $130M credit line and their creditors have noticed that profits aren't what they will need to be in X years time, hence the hair cutting. Their headcount only increased by 4% in the past six months. AWS increased its 10,000+ headcount by 16% in the same time period. I mean, it's all sheer speculation, but I think it is equally likely that Digital Ocean is having a hard time vs. just restructuring to do some housekeeping... I don't know how any 600 person cloud company survives in the same world as AWS these days.
  - deleted 7y ago
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  - Matheus28 7y ago
    > I don't know how any 600 person cloud company survives in the same world as AWS these days. They aren’t competing in the same space
    - RussianCow 7y ago
      They most certainly are, especially given the managed products DO has introduced recently (object storage, DB, Kubernetes, and load balancer). They definitely want a slice of Amazon's pie.
treebornfrog 7y ago
Sucks. Hope it's not financial. I run a bunch of projects on DO, much prefer it over AWS. It's easier to use and straight to the point.
superbrane 7y ago
If this cutoffs are made for the sake of increasing profitability of an already profitable company, they are a bad sign in terms of management style and quality - it will affect morale, creativity and enthusiasm of remaining employees.
deleted 7y ago
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- deleted 7y ago
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ogre_codes 7y ago
I love DigitalOcean, my second favorite hosting company so this is concerning. As a recent Layoff survivor, this whole paragraph sets off alarm bells: > In that context, it’s notable that the company not only appointed a new CFO last summer, but also a CEO with prior CFO experience. It’s been a while since DigitalOcean has raised capital. According to PitchBook, DigitalOcean last raised money in 2017, an undisclosed amount from Mighty Capital, Glean Capital, Viaduct Ventures, Black River Ventures, Hanaco Venture Capital, Torch Capital and EG Capital Advisors. Nothing in particular, but finance guys and VCs tend to squeeze companies dry or push hard for acquisitions. Hopefully I'm wrong here.
- wastedhours 7y ago
  Might there be an opening bell in their future... almost entirely likely.
  - esdott 7y ago
    This exactly. I’m too tired to do some basic googling for citations but anecdotally speaking, I believe hiring financial oriented leadership like this and trimming the organization of “perceived” fat (management) is right out of the going public playbook.
  - gscott 7y ago
    More likely being sold to Cloudflare
- pc86 7y ago
  Acquisition wouldn't necessarily be terrible depending on who acquired them. Obviously if it's a direct competitor that's bad news, but there are some markets where adding a hosting provider could be a benefit.
- dghughes 7y ago
  I love DigitalOcean too they have great tutorials. It's one of the best sites around for clear, well-written tutorials.
grive 7y ago
The RGPD wall of Techcrunch is a real put-off (Choice partners that cannot be deactivated, IAB partners that must be unsubscribed from the third party website (which of course does not work), seriously?). No reason to accept this cancer, I will read about this subject elsewhere.
- csunbird 7y ago
  I stopped clicking on techcrunch links a long time ago for same reason. I am pretty sure that wall is not GDPR compliant, because the way to opt-out is not simple and straightforward.
  - PeterisP 7y ago
    And of course, GDPR is all about opt-in, not opt-out. The only statement that applies to opting out is 'withdrawing consent shall be as easy as granting it', which of course applies only after you've intentionally, explicitly granted opt-in consent.
- shmageggy 7y ago
  I didn't even make it that far. After about 3 or so screens deep with no actual options I noped out of there.
deleted 7y ago
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bhouston 7y ago
I think DO is wanting to go public at some point and needs to get their margins up.
mrtweetyhack 7y ago
Bet CEO is getting a raise
Meekro 7y ago
Digital Ocean is a great company in a brutal, low-margin industry. Based on having run a similar (now mostly defunct) company in the past, I would guess that 80% of their customers are on the $5/mo plan. That $5/mo has to cover the hardware costs: you're buying expensive physical servers to put the VPSes on, and lots of SSDs too. SSDs have a limited lifetime measured in writes, and some of your customers will leave broken programs running that chew through this precious resource for no reason. If you throttle them, they'll complain. Then there's the support. Handling a support ticket costs you at least $3 in salary and benefits (remember, your typical customer pays $5/mo), and people will demand that you help them fix their broken MySQL server or whatever. They'll yell and threaten when you tell them that this is outside the scope of what you can do. And don't forget security. Your customers will install broken-ass Wordpress sites and forget to upgrade them for 5 years. Then a worm sweeps through and now a whole bunch of them have been pwned and are mining cryptocurrency. Those pwned customers are complaining and demanding that you fix it, and the regular customers are also upset because of slowness due to the "noisy neighbor" problem inherent to all VPSes. Speaking of which, preventing one VPS from hogging all the CPU or disk bandwidth is harder than it looks. The two dominant software platforms are Xen and KVM, and neither gives you great tools for dealing with disk bandwidth. Limiting CPU is much easier, but there's still the problem that you're overselling. Which is fine until half the VPSes on your machine are trying to mine Ethereum. On the bright side: half your customers will buy the VPS, leave it running, and forget about it for years at a time. That's what makes the $5/mo business model work out. Anyway, I do hope they can become profitable! They run a much better operation than the incumbents they replaced (slicehost, etc).
- justicezyx 7y ago
  Cloud hosting is not low margin. But DO cannot have the monopoly margin enjoyed by AWS and alike. One example, the hardware cost for AWS probably will be significantly cheaper than DO. That alone can sentence Do to death. And frankly, DO is better at UX, its technology is not innovative in any measure. By definition, that's a death penalty to a firm of its size.
  - Twirrim 7y ago
Townley 7y ago
I'm rooting for them as one of the best potential guardians against the cloud provider market becoming even more of an oligopoly. Cloud resources should be a commodity. Providers should offer compute resources, persistent storage, load balancers, and MAYBE a small handful of other services. The way Digital Ocean succeeds against AWS is by aligning itself with this idea, and competing on specialization. Forget competing with lambda; let me run my own serverless application. Don't worry about IAM; let me configure LDAP. Don't waste developer hours on service-ifying the latest NoSQL storage trend; write high-quality tutorials explaining how users can do it themselves. And most importantly, continue to invest into open source and community resources. There are developers willing to fight the good fight against proprietary walled gardens like AWS/GCP/Azure, but it has to get easier. Configuring HA postgres is harder than paying for RDS. Paying for GKE is more feature complete than using rancher or kubeadm to make my own kubernetes cluster. This friction is an existential threat when Azure can make my problems go away for cash. I don't know if Digital Ocean can succeed against the big cloud providers, but if they do it won't be because they made a better platform; it'll be by playing a totally different game.
- sparkling 7y ago
  I think they would benefit a lot from adding a thin Heroku-like PaaS layer while keeping the option to "build from scratch".
  - christophilus 7y ago
    That’s why they acquired Nanobox, presumably.
    - sparkling 7y ago
      Never heard about Nanobox up until now. Interesting, let's see what comes out of that.
  - ydnaclementine 7y ago
    Dokku (and other things like flynn) get you that heroku experience, but you do a bit yourself. Following the same idea as what the parent said
PeterZaitsev 7y ago
Interesting story of Hyper-funded DigitalOcean vs Bootstrapped Linode
- gramakri 7y ago
  Wow, didn't realize linode is bootstrapped. How did they manage to build so many cloud centers with no investment? Do you know more of their story?
  - jgalentine007 7y ago
    Profit margins back in the day were a lot better than they are now. I started a web hosting company back in 99' as a high school senior with a couple hundred dollars, bootstrapped it to half a million in a couple years, and then over a million by year 10 (and sold it!) At that point margins had gotten skimpy and AWS with all their backing was eating up the market.
erikrothoff 7y ago
We just switched to DO thanks to their Hatch program. The support they have shown and the energy we’ve been getting from the people at DO has been next-to-none. Obviously it’s concerning to see people being laid off, and my thoughts and concerns go to those who are facing what is probably their worst days. Based on the stated reasoning from corporate I can’t say anything other than I believe them. They have been releasing so many great things recently, and looking at the number of open-source projects on Github it seems that the proof of a flat organisation is in the pudding. We’re spending +1.5k USD monthly and based on their product roadmap shared with us developers I have no reason to doubt that we’ll be moving more of our infrastructure to DO soon. We used to be on Linode and they were great too. The competition has really forced them to up their game and start innovating. The segment is vibrant and the cash is there. I’m not worried.
esaym 7y ago
Weird, when I go to the link, the page immediately redirects to https://guce.advertising.com/collectIdentifiers?sessionId=1..... https://guce.advertising.com/collectIdentifiers?sessionId=1..... Even if I try to just go to techcrunch.com/, same thing. I only notice this because *advertising.com is in my host file on my router so instead of redirecting, I just get a "server not found" error page in firefox. If I open a private tab, techcrunch.com loads fine. Looking at the network tab in the dev console when trying to load techcrunch.com seems to show that no redirect is made, just that techcrunch.com automatically becomes guce.advertising.com... Have I been pawnd?
- geocrasher 7y ago
  Sounds like adware. Check your browser extensions.
  - esaym 7y ago
    I don't see anything. I'm running on debian and never used any extensions.
- esaym 7y ago
  Ok, nm. It is techcrunch that is doing it. I had my network dev console filtered to only show ajax request. Showing all request shows techcrunch returning a 307 (redirect): https://i.imgur.com/sZM9btp.png https://i.imgur.com/sZM9btp.png
- jdormit 7y ago
  Yup, I can confirm. techcrunch.com redirects to guce.techcrunch.com, which redirects to guce.advertisting.com, which then redirects back to techcrunch.com. This only happens on the first page load (presumably due to cookies being set for the guce.techcrunch.com domain). The redirects are really fast, seems like the only reason @esaym noticed is that they are blocking advertising.com via their hosts file which prevents the final redirect back to techcrunch.com. Welcome to surveillance capitalism...
shakezula 7y ago
Is it just me or are we starting to see the first signs of mass lay-offs in tech? Mozilla, now DigitalOcean, I feel like we're starting to see the first bleeding cuts of the recession take hold. And I just got my life together, too.
- tjr225 7y ago
  Huh? There have been tons of layoffs in tech in the past year or two. If this were what you consider the start then I suspect you haven't been looking close enough. Spending your time trying to correlate every event to something larger is only going to make you crazy. We work in a volatile and rapidly changing sector of the economy.
- axaxs 7y ago
  I wouldn't worry about it. Last time there was a pullback that I can remember, every other day it was HUGE companies(think MS, IBM, HP, etc) laying off tens of thousands of people. These are two relatively small companies, in challenging sectors, laying off a relatively small amount of people. Don't worry yourself making more of it than it is right now.
- roguecoder 7y ago
  It is January: layoffs often cluster during January. I'm not yet seeing a flood of candidates for our open roles, so I'm not worried.
- xenihn 7y ago
  Uber layoffs last year were the first big tech ones I think.
gramakri 7y ago
I love DO, been a customer for over 10 years. Maybe just me, but apart from AWS, it's the only cloud provider that has competent support team. Azure, Google Cloud are mostly unreachable. But raise a DO support request and you get a response in 1 hour!
zacharybk 7y ago
Lots of <3 to the DO-crew...For anyone looking for work, I put together a post with resoures / thoughts on starting a job search. https://customerexperience.substack.com/p/find-your-dream-job https://customerexperience.substack.com/p/find-your-dream-jo... - Zach (Former DO employee)
durmonski 7y ago
That's really unfortunate for the people losing their jobs.
webscientist 7y ago
Omg! Yesterday I read a post where the author admitted that if people believe it's an advert then it is because they want great people to come and work in the company. https://blog.digitalocean.com/from-15-000-database-connections-to-under-100-digitaloceans-tale-of-tech-debt/ https://blog.digitalocean.com/from-15-000-database-connectio...
- sunny--tech 7y ago
  Author here. I think you might be referring to this: https://dev.to/digitalocean/from-15-000-database-connections-to-under-100-digitalocean-s-tale-of-tech-debt-43bj https://dev.to/digitalocean/from-15-000-database-connections... Same post, just on a different platform. For context, I was responding to someone who said the article read like an advertisement for DO. To clarify, this post has nothing to do with the layoffs and was not coordinated for it. I had no prior knowledge of the org restructuring. I’ve been working on that article on-and-off for over a year. The timing of its publishing and the layoffs are coincidental and unfortunate.
wnevets 7y ago
I wonder if its because I just destroyed that $5 droplet I had running
wakatime 7y ago
WakaTime switched to DigitalOcean and we're loving their performance to cost ratio. Their compute droplet machines are much better than AWS ec2[1], especially if you need low-latency SSD IOPs. The only AWS services we still use are S3 and Route53, because S3's performance is better than Spaces[2]. Really hope this doesn't spell bad weather ahead. [1] DigitalOcean Droplets > AWS Ec2 (based on our production metrics) [2] AWS S3 > DigitalOcean Spaces (based on our production metrics)
- bob1029 7y ago
  I tell you what... If it weren't for Route53 being as good as it is and getting all of our domains sucked into it's gaping maw, we would be much more likely to hop to different cloud vendors. It is very nice having the entire enterprise tech stack managed through a single vendor when you are a tiny company like we are. That said, I am losing patience with how slow the EC2 instances are considering what we pay. I've got management asking increasingly-probing questions about our monotonically-incrementing AWS bill. All of this would be fine if perceived/actual performance weren't also dropping for us over time (I.e. intel spectre mitigations). I can almost feel how the AMZN profit margins are squeezing us at this point... It's almost a weekly conversation now with Azure or even a return to on-prem being brought up. "Do we move now or later? Is the frying pan hot enough yet?" Our organization is small enough to comfortably fit onto a single 2S 128 core AMD Rome system. Why shouldn't we just lease out a half-rack somewhere local (I.e. near the developers who can care for it) and then stick a few of their systems, a switch, router and management hardware in there? This all began on-prem with us moving to AWS, and after 6 years in the cloud circus it's starting to feel like a safe place to return to. Perhaps we will just move our compute to on-prem and continue to use AWS for backups and DNS. All I know is my TR 2950X workstation can compile our solution ~10x faster than our Jenkins server which is running on a T2.Large. Imagine giving Jenkins 32 Rome cores. This is something we could actually afford if we owned the hardware. There are also some other compelling factors for us to consider moving back on-prem. Emerging technologies like Blazor create a strong argument for keeping your workers near the datacenter. Very few businesses truly require more than 1 physical datacenter. Yes, you might also have a DR site, but you can arguably run all of the functions for 95%+ of businesses out of a single physical location. Also, having a physical location where you can hook up any arbitrary hardware means we could also pull our iOS build machine in-house and use proper high-end Apple hardware on the same local network as the rest of our infrastructure.
vira28 7y ago
totally irrelevant, but wanted to throw here. Their documentation and simple blogs are very very useful.
marto1 7y ago
Sad to see. They've been nothing but great with me as a customer and should serve as an example of how to do good business(yes, I know, I know..scandal this, scandal that). Hope the laid off find something else and maybe better soon.
hiphipjorge 7y ago
Slightly unrelated, but does anyone actually use DO in production? We're on GKE and with their new Kubernetes offering, I've considered switching but just haven't talked to a single person who uses it in production at work.
networkimprov 7y ago
DO will be just fine when GCP closes a few years hence, which Alphabet accidentally "announced". https://www.crn.com/news/cloud/google-reportedly-set-ambitious-goal-and-possible-deadline-for-gcp https://www.crn.com/news/cloud/google-reportedly-set-ambitio...
- zomglings 7y ago
  It seems insane for them to even be speaking about that internally given that: 1. It could scare away enterprise customers who look for reliability on a much longer timescale. 2. The extent of their investment into hiring for GCP. [1] More likely the author of that article is trying to manufacture news. [1] https://www.geekwire.com/2019/google-cloud-single-largest-driver-headcount-growth-google/ https://www.geekwire.com/2019/google-cloud-single-largest-dr...
jiofih 7y ago
While better pricing is always nice, I really wish they would refocus on the user experience in their platform. When adding up droplets + storage + LB + database, the price difference is there, but mostly you don’t feel it’s worth it - you still have to do configure everything yourself. If they offered something more akin to Heroku or Now I’d be jumping all over it.
- mmcwilliams 7y ago
  Based on user surveys I've completed for them, it seems they are at least exploring the idea of releasing a Heroku-like service.
LeonB 7y ago
If EIG buy them I’m out.
raiyu 7y ago
Hey folks, Cofounder of DigitalOcean here. Letting people go is always a complicated matter at any scale. Whether you are a ten person company and firing one employee or you are 500 people and firing a larger number. Wanted to address a few statements from the hackernews community here. We are not prepping the company for sale. As unfortunate as the layoffs are they were really due to two CEO changes in the past 18 months and leadership changes that created competing directions in the business, which Yancey our new CEO, is now addressing. We are not running out of money, nor do we have an immediate need to raise capital, and the lay-offs aren't related to any sort of "cost-cutting". We last raised an equity round in the summer of 2015 and haven't had a need to raise capital since. This is because we are very capital efficient and have been since our founding. There are no profitability issues with $5/mo customers as the unit economics are the same as larger accounts. As we have grown we have added more products and features so that scaling teams and companies can also be successful on DigitalOcean, but we are not changing our commitment to the individual developer and those who are just getting started. Lastly, it pains me to see people let go, having been on both sides of the table, it honestly just really sucks.
- yowlingcat 7y ago
  Appreciate the response! Are you at liberty to say a little more about the competing directions that, for lack of a better term, didn't win out? How will these changes impact customers, and could folks be left stranded in any way?
  - raiyu 7y ago
    There is no impact to customers now or future. The changes were mostly internal in how teams were structured and was the result of leadership changes that happened. From the customer perspective we have never launched a product and then killed it. Anytime you are dealing with infrastructure and building services that other companies rely on for their business you have to be very sure that whatever you launch you plan to support just about forever. A lot of the changes are actually about getting refocused on what made us successful, which is developers and the larger developer/open source community.
awinter-py 7y ago
IMO part of the value of DO is to have a cloud host that isn't running a competing business. netflix has done fine on AWS but that still feels iffy to me.
- zomglings 7y ago
  Anti-trust fear offers some protection to companies like Netflix. I wonder if health insurance companies have the same protection given Amazon's moves into the space. [0] [0] https://www.geekwire.com/2019/amazon-jpmorgan-roll-new-health-insurance-plans-part-haven-joint-venture/ https://www.geekwire.com/2019/amazon-jpmorgan-roll-new-healt...
greyhair 7y ago
From the tail end of the article: It’s been an active week for layoffs among tech startups. Mozilla laid off 70 employees this week; What is the cutoff age for an organization to be a "startup"?
- imsofuture 7y ago
  It just means tech company these days.
0xADADA 7y ago
All that ops automation they were working on finally comes to fruition. Automation creates surplus labor, and that surplus is realized with the elimination of humor labor, reaping profit in the form of lowering costs.
pier25 7y ago
Everyone knows DO for their VPS but their object storage prices are some of the lowest. $0.02 per GB stored $0.01 per GB transferred. That includes CDN too. I haven't found a better deal anywhere. Even Blackblaze doesn't offer CDN (AFAIK).
- techsin101 7y ago
  Could flare cdn vs digital ocean?
  - pier25 7y ago
    How much does Cloudflare CDN cost?
maxdo 7y ago
My personal opinion , DO is in a middle of nowhere. There are huge vendors like aws google Microsoft, and there are cheap vendors eg hetzner. DO is not as advanced as big guys , lagging behind a lot and still not as cheap as most of the cheap vendors , the only great things about them is their docs. They are great.
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kevindong 7y ago
For my hobby projects, I strongly prefer DigitalOcean's $5/month droplet to Amazon's EC2 t2.nano instance (their lowest-resourced offering; ~$4.18/month) purely because I know that I can't screw up the DigitalOcean configs badly enough to get an unexpectedly enormous bill. For simple stuff, the DigitalOcean UI is just so much easier to navigate than the enterprisy AWS console.
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ededdeddie38 7y ago
FULL DISCLOSURE - My name is Edward, I was one of the earliest team members at DigitalOcean and lead the customer success organization there in the early days. I have not been at the company for 3+ years so want to make crystal clear I don’t know “intimately” what’s going on at the organization. With that said, I still know enough about the business to say the following. Been reading about developers, business owners, etc worrying about your application stability or fearing the need to migrate to another infrastructure, all warrented feelings. I want to share some thoughts as an (old)insider. DIGITALOCEAN IS NOT GOING ANYWHERE. You don’t make $200M+ in ARR and all of a sudden shutdown. Especially as a company who has always prioritized the BEST product experience. Prioritized the BEST customer experience. If you’ve been a customer of DO, you know they go above and beyond you. DigitalOcean’s offering is still by far the most developer-friendly and delightful infrastructure experience on the market. One of my biggest frustrations when I worked there was the lack of advanced features offered for scaling applications, I'm shockingly surprised that in the past few years they quickly launched Kubernetes, Database as a service, and Object Storage, granted all table stake stuff that AWS already has, but nevertheless has made DigitalOcean a very mature product. I'm low-key annoyed they didn't launch this when customers were yelling at me as the customer success point person, begging for all these features...anyways good for those that are customers today :) As the co-founder mentioned above, the business has gone through several CEO changes with the purpose of preparing for an even grander expansion. So far hasn't worked as planned. When leadership changes, rockiness always occurs, and it’s up to the next CEO to steer the ship. I don't know the new CEO and have no clue if he's any good, but I wish him good luck. Layoffs happen when businesses are tanking, but they also happen when a business is preparing for another launch at greatness. I'm truly empathetic to those that were laid off today, as a fellow DO-Shark that can't feel good. Even though you are likely folks I've never met, my thought are with you. If you are a developer, DigitalOcean will always be a place for you to incubate, innovate, and grow your business. I'm confident of that.
zupreme 7y ago
I, spread across multiple ventures, spend a significant (to us) sum with DigitalOcean. I was a bit panicked by the story and, I imagine like many, Was already thinking up migration strategies to communicate to the team in the morning. The response given by the cofounder allows me to rest this weekend, and keeps me from harassing engineering staff while off. Thanks.
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nawaaz 7y ago
I am planning to apply for an open position at DO. Does anyone thinks it's the right time to switch there?
maxlecactus 7y ago
Why does DitialOcean not offer GPU instances? It would be a great addition!
WarOnPrivacy 7y ago
DigitalOcean hater here. I won't counter any of the praise I'm reading; if anything this will probably validate it. I'm on the other end of the DO equation. My small mail server is relentlessly targeted for spam from DigitalOcean IPs - and has been for years. In fact there are 4 networks I block (by ASN) - DO, OVH, AWS (new!) and Psychz Networks. (note: No mail from outside N.Am/EU allowed) Forget to stop my mail server when dropping the firewall for 20 seconds? Get a ½ dozen spams from DigitalOcean IPs. I actually like that there are hosts for dodgy services. I also get that conscientious hosts get bad customers and it takes time to overcome their bad behavior. However from the time I 1st heard of DO until now, it's an unbroken timeline of DO being a toxic source. (note: The difficulty of reporting spammy IPs in bulk - using firewall not mail server logs - is another post) So like a lot of orgs, DigitalOcean treats people on the inside really well. But for those of us on the receiving end of unwanted attention from DO networks, it's a rough ride.
rasengan0 7y ago
With all this praise, time for me to check out DO!
cloudc0de 7y ago
SpinUp also offers $5/mo VMs, mine have been extremely stable so far. They even have a $50 credit for new users https://spinup.com/pricing/ https://spinup.com/pricing/

816 points by progapandist 7y ago

This sucks. I really want DO to succeed because I love their offerings - whereas I occasionally feel like I really do need to RTFM in depth for many AWS offerings (even EC2), DO seemed to just work. That being said, and I can’t put my finger on why necessarily, it sometimes feels a bit like Heroku - the thing you use before you “graduate” to just using one of the major cloud providers.

spectramax 7y ago
They're not shutting down or winding down. I am guessing that they hired a lot of people to start building an AWS competitor which is a steep battle (even with funding) and goes against the grain of DO philosophy - keep things simple and target DO for small-medium businesses (sub-100 employees). Investors went into DO thinking of a AWS/GCP/Azure unicorn, but after 6 years it appears to be a small rainbow pony than an almighty unicorn. This restructuring appears to be a realization of what happened with that vision and how it panned out, I may be wrong though. I personally love DO, I don't want to deal with AWS complexity for basic needs. Minimalism and simplicity certainly has value.
gist 7y ago
> I really do need to RTFM in depth for many AWS offerings Agree. But I think part of the plan with Amazon et al is that those who RTFM are locked in to the platform and therefore will be less likely to switch.
kbar13 7y ago
past a certain point you want your provider to do more and more for you (more features). like you mentioned, AWS is complex but they do pretty much everything for you. I've built systems that are just glued together AWS services.
- wgerard 7y ago
  totally, and people who know the ecosystem well are extremely productive at getting things up and running. Definitely a skill floor/ceiling thing going on.
- toast0 7y ago
  My experience is the opposite, for less critical systems, it's fine for the provider to do everything; as things get more critical, I want more control. At that point, all I need from the hosting provider is a server that stays up with a network that stays up. And contacts to skip bullshit triage when the network is broken and their monitoring doesn't show it.
gazelle21 7y ago
Its funny you mention that, I had the same thought comparing it to Heroku, can't quite put my finger on it why that is.
whitepoplar 7y ago
Perhaps because they don't heavily advertise large anchor customers? Sure, there are a bunch of brands on the front page, but that doesn't tell you whether they run 100% on DO or if they maybe used DO once for a side project. Digital Ocean needs a "Netflix", or at least more publicity around how their existing whales use their offerings.
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avree 7y ago
It's funny—my experience is pretty much opposite. At a certain scale AWS will provide really world-class support beyond just troubleshooting. DO forwards you to (granted, fairly in-depth) documentation an expects you to read it and engineer your own solutions.
- wgerard 7y ago
  totally. I mentioned this in another comment but it feels like a skill floor/ceiling thing to me. AWS/etc heavily reward you for investing time/money/etc but can be a bit more difficult to get started with without investing resources immediately, whereas DO is very easy to get up and running on but can be difficult when you encounter anything more complex.
- bberenberg 7y ago
  Are you over $500/month spend with DO? They offer a different tier of support at that point which has been solid in my experience.
- iudqnolq 7y ago
  As an on-and-off DO customer learning how to use Linux I find the documentation they've creates (payed ICs to create, I think) extremely useful and consistently of decent quality. When I see them in a Google search for an issue I'm always excited.
djsumdog 7y ago
Digital Ocean is pretty similar to Vultr: they offer a straight easy API for starting up VMs and managing DNS (I've written a tool that uses both of their API[1]; been meaning to do a post on the differences). It's kinda nice because you're just putting up VMs and there's not the type of vendor lockin you get with AWS/Azure/Google. That being said, DO is obviously trying to compete on that scale now. It has managed databases to compete with RDS, load balancers, and even managed k8s. They want to be a real AWS alternative, but when you start building around these components, you get locked in. If they're laying off people, it could adversely affect startups thinking of building around their services. And for people who think "Well I can just use another terraform provider" .. it really is not that simple at all. AWS/Azure/Google/DO are all very different. They have vastly different terraform providers/modules and you're pretty much writing an entirely new setup per each provider because of they way they handle firewalls, security, IPs, inbound-outbound, etc. The OpenStack API or any type of real standard has yet to emerge that branches all these offering. If you want "cloud" hosting (and most do because managing your own Postgres/MySQL clusters with backups and failover is a fucking bitch; especially if you're just starting out and want to get going fast), you need to realize you might need to be locked in very early in the game. [1]: https://github.com/sumdog/bee2/tree/master/lib https://github.com/sumdog/bee2/tree/master/lib
- tanilama 7y ago
  > They want to be a real AWS alternative They can't. Too small to grow big.
- timfrietas 7y ago
  You mean Vultr is pretty similar to DO :) When I worked at DigitalOcean all we could do was shake our head and laugh at how blatantly hard Vultr tried to copy what we did.
  - djsumdog 7y ago
    Yes, that's what I meant. :) DO did come first and Vultr pretty much copied everything with lower prices; but DO has matched a lot of those prices since then as well.
chadlavi 7y ago
I feel like that "this is not serious enough" feeling is an ironic result of the fact that they have such good UX.
- closeparen 7y ago
  DigitalOcean has always been great place to host single-server Rails/Django/PHP app. But support for more complex backend infrastructures targeted by the cloud providers, with network segmentation and load balancers and autoscaling clusters, has only started to grow in recently. There is nothing approaching any cloud provider's IAM.
  - apple4ever 7y ago
    I’d love to get a network segmentation option in DO. IAM is a big no though.
- davnicwil 7y ago
  Not sure if it's applicable in this case as I'm not a DO user, but this is definitely a thing. For instance, think about web forms for anything 'official' - it's almost as if the worse the UX is, the older the tech it seems to be built on even, the more legit it seems. It's a really counter intuitive effect.
  - ludamad 7y ago
    Then you find out about some guy in Japan accessing the web form via fax. What people don't often talk about old stuff is the long tail ecosystems compatible with it
    - davnicwil 7y ago
      Oh completely agree, not at all saying using old tech is bad in any way and it's completely clear why offical public service stuff prefers it. Just saying it's interesting how this then makes old-looking stuff seem more official, because you're used to everything official generally looking about 10 years old.
robohoe 7y ago
I really like DO's blogs/documentation. Fairly easy to get into versus AWS. On another hand, AWS has a very broad product offering with very broad documentation - some hit and miss though.
amerine 7y ago
Help me understand that “graduate” off sentiment towards Heroku? (Full disclosure: I work on Heroku for Salesforce).
- cloverich 7y ago
  (similar boat, use Heroku and some GCP in production for work) -- Heroku is great. But it is a bit limited and very expensive. It feels w/ modern cloud platforms you get something comparable with a little more flexibility for only a little more technical burden, _iff_ you have the chops. GCP / AWS are starting to encroach a bit w/ offerings like Cloud Run, I feel like they are one quality PM away from making a Heroku for Google type product that is a bit more powerful and a bit cheaper than Heroku. Conversely, I also feel like Heroku could round out their offering just a bit more (ex: built in robust monitoring and alerting, better deploy notifications and healthchecks, a simple custom metrics system) and really lock in that "premium basic" tier that would be perfect for most small to medium businesses.
  - LifeIsBio 7y ago
    Yea, I would second this. I've always enjoyed Heroku, but feel like I'm paying a premium because I don't know enough to do "real" cloud work. "If I were a more experienced developer, I could run this on AWS for pennies on the dollar". Honestly, I don't know where that sentiment comes from exactly. It's at least partially coupled with the fact that all of add-ons you would need to pay for to run a small business site add up pretty quickly, from what I can tell.
- wgerard 7y ago
  Hey! Totally. I meant that Heroku is incredible for bootstrapping projects, but as time moves forward I usually find myself migrating services from Heroku to just run on AWS directly. There's some friction with AWS (e.g. SSL termination) that Heroku makes incredibly easy, so I usually don't migrate until it's clear that a service is going to continue to exist in the medium term - otherwise the investment isn't worth it. Didn't mean to imply that was a widespread sentiment, of course! Just my personal one.

gist 7y ago

> DigitalOcean continues to be a high-growth business with $275M in [annual recurring revenues] and more than 500,000 customers globally. Under this new organizational structure, we are positioned to accelerate profitable growth by continuing to serve developers and entrepreneurs around the world.” If not obvious this can be translated as positioning the company so it can be acquired by a larger entity for it's customer base and remaining employees. > It says it works with more than 1 million developers across 195 countries. I always love marketing statements like this. For sure 1 million is a large number. But what makes someone a 'developer'? It's not something defined like 'Physician' or 'Pilot' or 'Attorney' which require some type of certification to use the title. To DO (in terms of the marketing) a 'developer' is almost certainly only someone who signed up for an account and perhaps (as with other web properties) multiple accounts. (I have used DO and was happy although I don't have a need for what they offer anymore).

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fareesh 7y ago
If they're counting accounts it's definitely much lower. Our firm manages web applications / web services / websites for multiple clients and they all have their own DO account and there isn't 1 developer per account. We were pretty excited to become part of their partner program but after signing up we realized that if we onboarded new clients we'd have to do it all under a single account, which sadly doesn't work for us because extremely delayed payments are very common, and we'd be fronting hosting costs for everyone.

dothrowaway 7y ago

(Throwaway, obviously) I'm a DO employee on the tech side of the house. According to the CTO, the primary reason for this was actually reorg, not financial though that obviously played a part. Mostly managers got cut, with the goal of flattening the org. I'm keeping my ear to the ground but it doesn't seem like there's going to be more cuts any time soon at least. Apparently we're still hiring a ton this year, so that jives.

irjustin 7y ago
Thanks for the info and best of luck. Re-orgs are hard as the company is trying to find its new identity in the new structure. I love DO and what it stands for. Sadly, I don't use it outside of personal pet projects.
tempsy 7y ago
no offense but I wouldn't take your CTO's word at face value. you need to watch out for your own interest, including looking at other opportunities, even if it's just to keep yourself top of mind to others if something happens
- dothrowaway 7y ago
  Agreed fully. I always have an escape strategy in mind if things go south, but I'm pretty bullish on DO right now. That could always change, certainly.
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  - tempsy 7y ago
    curious what makes you bullish? i'm a total outsider but it does feel like the walls are closing around smaller players as the big get bigger.
    - op00to 7y ago
      Digital Ocean gives me peace of mind. Unlike Amazon or Google, I am confident I'm not going to get a $300k bill from DO overnight.

rgbrenner 7y ago

Everyone is seeing this as negative and a warning sign for DO... but they're an 8 year old privately owned company that has raised over $300m. The last time they obtained funding was a 130m credit line in 2016. It's been 4 years since then... and if they're still losing money, they likely need to either make this profitable, or they're going to need to raise more money. If they're close to being profitable (likely given their past fund raising, and how long its been), why would they want to sell more of their business? They may also want to finally go public. 8 years is a long time to wait for a return. And it seems to me the stock market is tired of these unprofitable unicorns doing IPOs (at the moment anyway).

ttul 7y ago
You could also read this as: Digital Ocean raised a $130M credit line and their creditors have noticed that profits aren't what they will need to be in X years time, hence the hair cutting. Their headcount only increased by 4% in the past six months. AWS increased its 10,000+ headcount by 16% in the same time period. I mean, it's all sheer speculation, but I think it is equally likely that Digital Ocean is having a hard time vs. just restructuring to do some housekeeping... I don't know how any 600 person cloud company survives in the same world as AWS these days.
- deleted 7y ago
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- Matheus28 7y ago
  > I don't know how any 600 person cloud company survives in the same world as AWS these days. They aren’t competing in the same space
  - RussianCow 7y ago
    They most certainly are, especially given the managed products DO has introduced recently (object storage, DB, Kubernetes, and load balancer). They definitely want a slice of Amazon's pie.

treebornfrog 7y ago

Sucks. Hope it's not financial. I run a bunch of projects on DO, much prefer it over AWS. It's easier to use and straight to the point.

superbrane 7y ago

If this cutoffs are made for the sake of increasing profitability of an already profitable company, they are a bad sign in terms of management style and quality - it will affect morale, creativity and enthusiasm of remaining employees.

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abinaya_rl 7y ago

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ogre_codes 7y ago

I love DigitalOcean, my second favorite hosting company so this is concerning. As a recent Layoff survivor, this whole paragraph sets off alarm bells: > In that context, it’s notable that the company not only appointed a new CFO last summer, but also a CEO with prior CFO experience. It’s been a while since DigitalOcean has raised capital. According to PitchBook, DigitalOcean last raised money in 2017, an undisclosed amount from Mighty Capital, Glean Capital, Viaduct Ventures, Black River Ventures, Hanaco Venture Capital, Torch Capital and EG Capital Advisors. Nothing in particular, but finance guys and VCs tend to squeeze companies dry or push hard for acquisitions. Hopefully I'm wrong here.

wastedhours 7y ago
Might there be an opening bell in their future... almost entirely likely.
- esdott 7y ago
  This exactly. I’m too tired to do some basic googling for citations but anecdotally speaking, I believe hiring financial oriented leadership like this and trimming the organization of “perceived” fat (management) is right out of the going public playbook.
- gscott 7y ago
  More likely being sold to Cloudflare
pc86 7y ago
Acquisition wouldn't necessarily be terrible depending on who acquired them. Obviously if it's a direct competitor that's bad news, but there are some markets where adding a hosting provider could be a benefit.
dghughes 7y ago
I love DigitalOcean too they have great tutorials. It's one of the best sites around for clear, well-written tutorials.

grive 7y ago

The RGPD wall of Techcrunch is a real put-off (Choice partners that cannot be deactivated, IAB partners that must be unsubscribed from the third party website (which of course does not work), seriously?). No reason to accept this cancer, I will read about this subject elsewhere.

csunbird 7y ago
I stopped clicking on techcrunch links a long time ago for same reason. I am pretty sure that wall is not GDPR compliant, because the way to opt-out is not simple and straightforward.
- PeterisP 7y ago
  And of course, GDPR is all about opt-in, not opt-out. The only statement that applies to opting out is 'withdrawing consent shall be as easy as granting it', which of course applies only after you've intentionally, explicitly granted opt-in consent.
shmageggy 7y ago
I didn't even make it that far. After about 3 or so screens deep with no actual options I noped out of there.

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bhouston 7y ago

I think DO is wanting to go public at some point and needs to get their margins up.

mrtweetyhack 7y ago

Bet CEO is getting a raise

Meekro 7y ago

Digital Ocean is a great company in a brutal, low-margin industry. Based on having run a similar (now mostly defunct) company in the past, I would guess that 80% of their customers are on the $5/mo plan. That $5/mo has to cover the hardware costs: you're buying expensive physical servers to put the VPSes on, and lots of SSDs too. SSDs have a limited lifetime measured in writes, and some of your customers will leave broken programs running that chew through this precious resource for no reason. If you throttle them, they'll complain. Then there's the support. Handling a support ticket costs you at least $3 in salary and benefits (remember, your typical customer pays $5/mo), and people will demand that you help them fix their broken MySQL server or whatever. They'll yell and threaten when you tell them that this is outside the scope of what you can do. And don't forget security. Your customers will install broken-ass Wordpress sites and forget to upgrade them for 5 years. Then a worm sweeps through and now a whole bunch of them have been pwned and are mining cryptocurrency. Those pwned customers are complaining and demanding that you fix it, and the regular customers are also upset because of slowness due to the "noisy neighbor" problem inherent to all VPSes. Speaking of which, preventing one VPS from hogging all the CPU or disk bandwidth is harder than it looks. The two dominant software platforms are Xen and KVM, and neither gives you great tools for dealing with disk bandwidth. Limiting CPU is much easier, but there's still the problem that you're overselling. Which is fine until half the VPSes on your machine are trying to mine Ethereum. On the bright side: half your customers will buy the VPS, leave it running, and forget about it for years at a time. That's what makes the $5/mo business model work out. Anyway, I do hope they can become profitable! They run a much better operation than the incumbents they replaced (slicehost, etc).

justicezyx 7y ago
Cloud hosting is not low margin. But DO cannot have the monopoly margin enjoyed by AWS and alike. One example, the hardware cost for AWS probably will be significantly cheaper than DO. That alone can sentence Do to death. And frankly, DO is better at UX, its technology is not innovative in any measure. By definition, that's a death penalty to a firm of its size.
- Twirrim 7y ago

Townley 7y ago

I'm rooting for them as one of the best potential guardians against the cloud provider market becoming even more of an oligopoly. Cloud resources should be a commodity. Providers should offer compute resources, persistent storage, load balancers, and MAYBE a small handful of other services. The way Digital Ocean succeeds against AWS is by aligning itself with this idea, and competing on specialization. Forget competing with lambda; let me run my own serverless application. Don't worry about IAM; let me configure LDAP. Don't waste developer hours on service-ifying the latest NoSQL storage trend; write high-quality tutorials explaining how users can do it themselves. And most importantly, continue to invest into open source and community resources. There are developers willing to fight the good fight against proprietary walled gardens like AWS/GCP/Azure, but it has to get easier. Configuring HA postgres is harder than paying for RDS. Paying for GKE is more feature complete than using rancher or kubeadm to make my own kubernetes cluster. This friction is an existential threat when Azure can make my problems go away for cash. I don't know if Digital Ocean can succeed against the big cloud providers, but if they do it won't be because they made a better platform; it'll be by playing a totally different game.

sparkling 7y ago
I think they would benefit a lot from adding a thin Heroku-like PaaS layer while keeping the option to "build from scratch".
- christophilus 7y ago
  That’s why they acquired Nanobox, presumably.
  - sparkling 7y ago
    Never heard about Nanobox up until now. Interesting, let's see what comes out of that.
- ydnaclementine 7y ago
  Dokku (and other things like flynn) get you that heroku experience, but you do a bit yourself. Following the same idea as what the parent said

PeterZaitsev 7y ago

Interesting story of Hyper-funded DigitalOcean vs Bootstrapped Linode

gramakri 7y ago
Wow, didn't realize linode is bootstrapped. How did they manage to build so many cloud centers with no investment? Do you know more of their story?
- jgalentine007 7y ago
  Profit margins back in the day were a lot better than they are now. I started a web hosting company back in 99' as a high school senior with a couple hundred dollars, bootstrapped it to half a million in a couple years, and then over a million by year 10 (and sold it!) At that point margins had gotten skimpy and AWS with all their backing was eating up the market.

erikrothoff 7y ago

We just switched to DO thanks to their Hatch program. The support they have shown and the energy we’ve been getting from the people at DO has been next-to-none. Obviously it’s concerning to see people being laid off, and my thoughts and concerns go to those who are facing what is probably their worst days. Based on the stated reasoning from corporate I can’t say anything other than I believe them. They have been releasing so many great things recently, and looking at the number of open-source projects on Github it seems that the proof of a flat organisation is in the pudding. We’re spending +1.5k USD monthly and based on their product roadmap shared with us developers I have no reason to doubt that we’ll be moving more of our infrastructure to DO soon. We used to be on Linode and they were great too. The competition has really forced them to up their game and start innovating. The segment is vibrant and the cash is there. I’m not worried.

esaym 7y ago

Weird, when I go to the link, the page immediately redirects to https://guce.advertising.com/collectIdentifiers?sessionId=1..... https://guce.advertising.com/collectIdentifiers?sessionId=1..... Even if I try to just go to techcrunch.com/, same thing. I only notice this because *advertising.com is in my host file on my router so instead of redirecting, I just get a "server not found" error page in firefox. If I open a private tab, techcrunch.com loads fine. Looking at the network tab in the dev console when trying to load techcrunch.com seems to show that no redirect is made, just that techcrunch.com automatically becomes guce.advertising.com... Have I been pawnd?

geocrasher 7y ago
Sounds like adware. Check your browser extensions.
- esaym 7y ago
  I don't see anything. I'm running on debian and never used any extensions.
esaym 7y ago
Ok, nm. It is techcrunch that is doing it. I had my network dev console filtered to only show ajax request. Showing all request shows techcrunch returning a 307 (redirect): https://i.imgur.com/sZM9btp.png https://i.imgur.com/sZM9btp.png
jdormit 7y ago
Yup, I can confirm. techcrunch.com redirects to guce.techcrunch.com, which redirects to guce.advertisting.com, which then redirects back to techcrunch.com. This only happens on the first page load (presumably due to cookies being set for the guce.techcrunch.com domain). The redirects are really fast, seems like the only reason @esaym noticed is that they are blocking advertising.com via their hosts file which prevents the final redirect back to techcrunch.com. Welcome to surveillance capitalism...

shakezula 7y ago

Is it just me or are we starting to see the first signs of mass lay-offs in tech? Mozilla, now DigitalOcean, I feel like we're starting to see the first bleeding cuts of the recession take hold. And I just got my life together, too.

tjr225 7y ago
Huh? There have been tons of layoffs in tech in the past year or two. If this were what you consider the start then I suspect you haven't been looking close enough. Spending your time trying to correlate every event to something larger is only going to make you crazy. We work in a volatile and rapidly changing sector of the economy.
axaxs 7y ago
I wouldn't worry about it. Last time there was a pullback that I can remember, every other day it was HUGE companies(think MS, IBM, HP, etc) laying off tens of thousands of people. These are two relatively small companies, in challenging sectors, laying off a relatively small amount of people. Don't worry yourself making more of it than it is right now.
roguecoder 7y ago
It is January: layoffs often cluster during January. I'm not yet seeing a flood of candidates for our open roles, so I'm not worried.
xenihn 7y ago
Uber layoffs last year were the first big tech ones I think.

gramakri 7y ago

I love DO, been a customer for over 10 years. Maybe just me, but apart from AWS, it's the only cloud provider that has competent support team. Azure, Google Cloud are mostly unreachable. But raise a DO support request and you get a response in 1 hour!

zacharybk 7y ago

Lots of <3 to the DO-crew...For anyone looking for work, I put together a post with resoures / thoughts on starting a job search. https://customerexperience.substack.com/p/find-your-dream-job https://customerexperience.substack.com/p/find-your-dream-jo... - Zach (Former DO employee)

durmonski 7y ago

That's really unfortunate for the people losing their jobs.

webscientist 7y ago

Omg! Yesterday I read a post where the author admitted that if people believe it's an advert then it is because they want great people to come and work in the company. https://blog.digitalocean.com/from-15-000-database-connections-to-under-100-digitaloceans-tale-of-tech-debt/ https://blog.digitalocean.com/from-15-000-database-connectio...

sunny--tech 7y ago
Author here. I think you might be referring to this: https://dev.to/digitalocean/from-15-000-database-connections-to-under-100-digitalocean-s-tale-of-tech-debt-43bj https://dev.to/digitalocean/from-15-000-database-connections... Same post, just on a different platform. For context, I was responding to someone who said the article read like an advertisement for DO. To clarify, this post has nothing to do with the layoffs and was not coordinated for it. I had no prior knowledge of the org restructuring. I’ve been working on that article on-and-off for over a year. The timing of its publishing and the layoffs are coincidental and unfortunate.

wnevets 7y ago

I wonder if its because I just destroyed that $5 droplet I had running

wakatime 7y ago

WakaTime switched to DigitalOcean and we're loving their performance to cost ratio. Their compute droplet machines are much better than AWS ec2[1], especially if you need low-latency SSD IOPs. The only AWS services we still use are S3 and Route53, because S3's performance is better than Spaces[2]. Really hope this doesn't spell bad weather ahead. [1] DigitalOcean Droplets > AWS Ec2 (based on our production metrics) [2] AWS S3 > DigitalOcean Spaces (based on our production metrics)

bob1029 7y ago
I tell you what... If it weren't for Route53 being as good as it is and getting all of our domains sucked into it's gaping maw, we would be much more likely to hop to different cloud vendors. It is very nice having the entire enterprise tech stack managed through a single vendor when you are a tiny company like we are. That said, I am losing patience with how slow the EC2 instances are considering what we pay. I've got management asking increasingly-probing questions about our monotonically-incrementing AWS bill. All of this would be fine if perceived/actual performance weren't also dropping for us over time (I.e. intel spectre mitigations). I can almost feel how the AMZN profit margins are squeezing us at this point... It's almost a weekly conversation now with Azure or even a return to on-prem being brought up. "Do we move now or later? Is the frying pan hot enough yet?" Our organization is small enough to comfortably fit onto a single 2S 128 core AMD Rome system. Why shouldn't we just lease out a half-rack somewhere local (I.e. near the developers who can care for it) and then stick a few of their systems, a switch, router and management hardware in there? This all began on-prem with us moving to AWS, and after 6 years in the cloud circus it's starting to feel like a safe place to return to. Perhaps we will just move our compute to on-prem and continue to use AWS for backups and DNS. All I know is my TR 2950X workstation can compile our solution ~10x faster than our Jenkins server which is running on a T2.Large. Imagine giving Jenkins 32 Rome cores. This is something we could actually afford if we owned the hardware. There are also some other compelling factors for us to consider moving back on-prem. Emerging technologies like Blazor create a strong argument for keeping your workers near the datacenter. Very few businesses truly require more than 1 physical datacenter. Yes, you might also have a DR site, but you can arguably run all of the functions for 95%+ of businesses out of a single physical location. Also, having a physical location where you can hook up any arbitrary hardware means we could also pull our iOS build machine in-house and use proper high-end Apple hardware on the same local network as the rest of our infrastructure.

vira28 7y ago

totally irrelevant, but wanted to throw here. Their documentation and simple blogs are very very useful.

marto1 7y ago

Sad to see. They've been nothing but great with me as a customer and should serve as an example of how to do good business(yes, I know, I know..scandal this, scandal that). Hope the laid off find something else and maybe better soon.

hiphipjorge 7y ago

Slightly unrelated, but does anyone actually use DO in production? We're on GKE and with their new Kubernetes offering, I've considered switching but just haven't talked to a single person who uses it in production at work.

networkimprov 7y ago

DO will be just fine when GCP closes a few years hence, which Alphabet accidentally "announced". https://www.crn.com/news/cloud/google-reportedly-set-ambitious-goal-and-possible-deadline-for-gcp https://www.crn.com/news/cloud/google-reportedly-set-ambitio...

zomglings 7y ago
It seems insane for them to even be speaking about that internally given that: 1. It could scare away enterprise customers who look for reliability on a much longer timescale. 2. The extent of their investment into hiring for GCP. [1] More likely the author of that article is trying to manufacture news. [1] https://www.geekwire.com/2019/google-cloud-single-largest-driver-headcount-growth-google/ https://www.geekwire.com/2019/google-cloud-single-largest-dr...

jiofih 7y ago

While better pricing is always nice, I really wish they would refocus on the user experience in their platform. When adding up droplets + storage + LB + database, the price difference is there, but mostly you don’t feel it’s worth it - you still have to do configure everything yourself. If they offered something more akin to Heroku or Now I’d be jumping all over it.

mmcwilliams 7y ago
Based on user surveys I've completed for them, it seems they are at least exploring the idea of releasing a Heroku-like service.

LeonB 7y ago

If EIG buy them I’m out.

raiyu 7y ago

Hey folks, Cofounder of DigitalOcean here. Letting people go is always a complicated matter at any scale. Whether you are a ten person company and firing one employee or you are 500 people and firing a larger number. Wanted to address a few statements from the hackernews community here. We are not prepping the company for sale. As unfortunate as the layoffs are they were really due to two CEO changes in the past 18 months and leadership changes that created competing directions in the business, which Yancey our new CEO, is now addressing. We are not running out of money, nor do we have an immediate need to raise capital, and the lay-offs aren't related to any sort of "cost-cutting". We last raised an equity round in the summer of 2015 and haven't had a need to raise capital since. This is because we are very capital efficient and have been since our founding. There are no profitability issues with $5/mo customers as the unit economics are the same as larger accounts. As we have grown we have added more products and features so that scaling teams and companies can also be successful on DigitalOcean, but we are not changing our commitment to the individual developer and those who are just getting started. Lastly, it pains me to see people let go, having been on both sides of the table, it honestly just really sucks.

yowlingcat 7y ago
Appreciate the response! Are you at liberty to say a little more about the competing directions that, for lack of a better term, didn't win out? How will these changes impact customers, and could folks be left stranded in any way?
- raiyu 7y ago
  There is no impact to customers now or future. The changes were mostly internal in how teams were structured and was the result of leadership changes that happened. From the customer perspective we have never launched a product and then killed it. Anytime you are dealing with infrastructure and building services that other companies rely on for their business you have to be very sure that whatever you launch you plan to support just about forever. A lot of the changes are actually about getting refocused on what made us successful, which is developers and the larger developer/open source community.

awinter-py 7y ago

IMO part of the value of DO is to have a cloud host that isn't running a competing business. netflix has done fine on AWS but that still feels iffy to me.

zomglings 7y ago
Anti-trust fear offers some protection to companies like Netflix. I wonder if health insurance companies have the same protection given Amazon's moves into the space. [0] [0] https://www.geekwire.com/2019/amazon-jpmorgan-roll-new-health-insurance-plans-part-haven-joint-venture/ https://www.geekwire.com/2019/amazon-jpmorgan-roll-new-healt...

greyhair 7y ago

From the tail end of the article: It’s been an active week for layoffs among tech startups. Mozilla laid off 70 employees this week; What is the cutoff age for an organization to be a "startup"?

imsofuture 7y ago
It just means tech company these days.

0xADADA 7y ago

All that ops automation they were working on finally comes to fruition. Automation creates surplus labor, and that surplus is realized with the elimination of humor labor, reaping profit in the form of lowering costs.

pier25 7y ago

Everyone knows DO for their VPS but their object storage prices are some of the lowest. $0.02 per GB stored $0.01 per GB transferred. That includes CDN too. I haven't found a better deal anywhere. Even Blackblaze doesn't offer CDN (AFAIK).

techsin101 7y ago
Could flare cdn vs digital ocean?
- pier25 7y ago
  How much does Cloudflare CDN cost?

maxdo 7y ago

My personal opinion , DO is in a middle of nowhere. There are huge vendors like aws google Microsoft, and there are cheap vendors eg hetzner. DO is not as advanced as big guys , lagging behind a lot and still not as cheap as most of the cheap vendors , the only great things about them is their docs. They are great.

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kevindong 7y ago

For my hobby projects, I strongly prefer DigitalOcean's $5/month droplet to Amazon's EC2 t2.nano instance (their lowest-resourced offering; ~$4.18/month) purely because I know that I can't screw up the DigitalOcean configs badly enough to get an unexpectedly enormous bill. For simple stuff, the DigitalOcean UI is just so much easier to navigate than the enterprisy AWS console.

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ededdeddie38 7y ago

FULL DISCLOSURE - My name is Edward, I was one of the earliest team members at DigitalOcean and lead the customer success organization there in the early days. I have not been at the company for 3+ years so want to make crystal clear I don’t know “intimately” what’s going on at the organization. With that said, I still know enough about the business to say the following. Been reading about developers, business owners, etc worrying about your application stability or fearing the need to migrate to another infrastructure, all warrented feelings. I want to share some thoughts as an (old)insider. DIGITALOCEAN IS NOT GOING ANYWHERE. You don’t make $200M+ in ARR and all of a sudden shutdown. Especially as a company who has always prioritized the BEST product experience. Prioritized the BEST customer experience. If you’ve been a customer of DO, you know they go above and beyond you. DigitalOcean’s offering is still by far the most developer-friendly and delightful infrastructure experience on the market. One of my biggest frustrations when I worked there was the lack of advanced features offered for scaling applications, I'm shockingly surprised that in the past few years they quickly launched Kubernetes, Database as a service, and Object Storage, granted all table stake stuff that AWS already has, but nevertheless has made DigitalOcean a very mature product. I'm low-key annoyed they didn't launch this when customers were yelling at me as the customer success point person, begging for all these features...anyways good for those that are customers today :) As the co-founder mentioned above, the business has gone through several CEO changes with the purpose of preparing for an even grander expansion. So far hasn't worked as planned. When leadership changes, rockiness always occurs, and it’s up to the next CEO to steer the ship. I don't know the new CEO and have no clue if he's any good, but I wish him good luck. Layoffs happen when businesses are tanking, but they also happen when a business is preparing for another launch at greatness. I'm truly empathetic to those that were laid off today, as a fellow DO-Shark that can't feel good. Even though you are likely folks I've never met, my thought are with you. If you are a developer, DigitalOcean will always be a place for you to incubate, innovate, and grow your business. I'm confident of that.

zupreme 7y ago

I, spread across multiple ventures, spend a significant (to us) sum with DigitalOcean. I was a bit panicked by the story and, I imagine like many, Was already thinking up migration strategies to communicate to the team in the morning. The response given by the cofounder allows me to rest this weekend, and keeps me from harassing engineering staff while off. Thanks.

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nawaaz 7y ago

I am planning to apply for an open position at DO. Does anyone thinks it's the right time to switch there?

maxlecactus 7y ago

Why does DitialOcean not offer GPU instances? It would be a great addition!

WarOnPrivacy 7y ago

DigitalOcean hater here. I won't counter any of the praise I'm reading; if anything this will probably validate it. I'm on the other end of the DO equation. My small mail server is relentlessly targeted for spam from DigitalOcean IPs - and has been for years. In fact there are 4 networks I block (by ASN) - DO, OVH, AWS (new!) and Psychz Networks. (note: No mail from outside N.Am/EU allowed) Forget to stop my mail server when dropping the firewall for 20 seconds? Get a ½ dozen spams from DigitalOcean IPs. I actually like that there are hosts for dodgy services. I also get that conscientious hosts get bad customers and it takes time to overcome their bad behavior. However from the time I 1st heard of DO until now, it's an unbroken timeline of DO being a toxic source. (note: The difficulty of reporting spammy IPs in bulk - using firewall not mail server logs - is another post) So like a lot of orgs, DigitalOcean treats people on the inside really well. But for those of us on the receiving end of unwanted attention from DO networks, it's a rough ride.

rasengan0 7y ago

With all this praise, time for me to check out DO!

cloudc0de 7y ago

SpinUp also offers $5/mo VMs, mine have been extremely stable so far. They even have a $50 credit for new users https://spinup.com/pricing/ https://spinup.com/pricing/