21 ms·

DigitalOcean raises $3.2M Seed Round

208 points by beigeotter 13y ago

Einherji 13y ago
Been using their services for a while now. Highly recommended, great hardware for the money.
joeblau 13y ago
I'm thinking about using them for my next project. I'm glad to hear the news that they are getting funding. 3.2M is a pretty big seed round though right?
holdenc 13y ago
Pretty amazing that a company like DigitalOcean can shake-up the market for VP servers prior to even taking funding. Their $5 servers have changed the game for nearly every hosting company that offers virtual servers. And to think they've managed to offer this while bootstrapped, is incredible.
- deleted 13y ago
  [deleted]
- yapcguy 13y ago
  Not really. How did it change the game for service providers over at LowEndBox.com, who have been providing VPS servers for $5 or less, before DigitalOcean even existed?
  - rgbrgb 13y ago
    In my experience, a lot of the services on LowEndBox.com are pretty sketchy. I'd go to production on DA.
    - coolnow 13y ago
      Not really. Most offers on LEB and LET are from recognised and proven providers. There are some fly-by-night providers that pop up over summer and disappear, but actually reading the offers on LEB will tell you how long the company has been offering their services for and how often they post deals. I lurked for less than a day on Lowendtalk and got an idea of the most respected/high quality hosts such as: BuyVM ChicagoVPS Prometeus (and IperWeb) HTTPZoom Iniz Ramnode I've had a box with most of these (apart from Ramnode which is highly regarded) and i can say i've had an awesome experience.
      - nikcub 13y ago
        both ChicagoVPS (for the second time in a year) and Ramnode were hacked a little over a month ago - tons of servers deleted, customer db's dumped online. I think "sketchy" is a good characterization when a pick of the "best" hosts have severe problems.
        coolnow 13y ago
        So, a vulnerability in the control panel used in probably >90% of all lowendbox providers, combined with a specific person applying the exploit to Ramnode, makes them sketchy now? Man, Apple must be the sketchiest company out there now, you know, with the week long downtime for the Dev Center.
        nikcub 13y ago
        I've audited both WHMCS and Solus. I found a half-dozen bugs in minutes of looking at each codebase. I can't express how horrible this software is that 90% of these hosts are running on - they are both an absolute trainwreck. More hacks are only a matter of time, especially when neither company responds to emails or security incidents well.
        biot 13y ago
        How much real engineering are these providers doing? How well do they understand their stack? If they're all running the same underlying software, it suggests that setting up such an operation doesn't require much skill and it's heading to "script kiddy" territory. Sketchy? Certainly suspect and needing a lot of due diligence which my gut tells me that (a) they won't fare so well; and (b) they are so low-margin that they would be unwilling to participate. If Apple got hacked because their dev center was powered by a $10 control panel script then yeah... they'd be extremely sketchy too.
  - dscb 13y ago
    Hourly Billing Stored backups (for free) of servers that you can set up at a later date instantly via an api It's not about being a $5 vps for me, it's about being able to pay $0.014 when I need a small vps for 2 hours.
    - jeffasinger 13y ago
      Hourly billing is huge for us. Our service is mostly CPU bound, embarrassingly parallel, and so far, 90% of usage is centered on a time slot that's about 8 hours per week long. We will save a ton of money by scaling down during the off hours, which means only Amazon, Rackspace, and a few others make any sense at all.
      - nthnclrk 13y ago
        I agree. This was massive for me. Being able to create a Droplet (from an existing backup) within a minute, test out an installation for a day, and have it cost almost nothing is huge.
  - pbreit 13y ago
    Is LowEndBox and actual provider or just a listing service? The two don't even appear similar to me.
    - coolnow 13y ago
      It just lists offers from actual providers.
suhailpatel 13y ago
Congrats to the DigitalOcean team. I moved my personal server from Linode London to DigitalOcean Amsterdam-1 and haven't had any issues at all and latency is only 2-3ms more from London compared to my old Linode box which is completely acceptable for me. Support is also extremely responsive.
- taf2 13y ago
  Interesting so I tried digital ocean and was at first pleased but with constant network outages and no private network support it was not ready for a production env as far as I could tell - for toy projects definitely nice and if they get the private network up and resolve their stability issues I'd definitely give it another go
  - raiyu 13y ago
    As we were scaling up our network we ran into a few issues and had to work with our vendors to resolve them. Quoted metrics for support for ARP and MAC addresses on devices didn't match what we were seeing in production but we were able to get that resolved, so you shouldn't see those issues recurring.
whitehat2k9 13y ago
I really don't get why DigitalOcean is so special. The $5/month VPS is nothing new, and in many, if not most cases you can do a lot better. I'm currently paying $2/month for a 512MB OpenVZ VPS and $6.50/month for a 1GB Xen VPS.
- bpicolo 13y ago
  1. SSDs 2. Exceptional user experience
- ddrager 13y ago
  - The SSDs are a main selling point - Their website is easy to use and clear - Access via a simple API I've used them for some side projects - although they aren't feature-full for bigger ones, they are great to use.
  - brandon272 13y ago
    RamNode has been offering less expensive SSD VPS hosting for longer than DigitalOcean has been around.
    - yapcguy 13y ago
      Exactly. There are lots of providers on LowEndBox.com and many have them have SSDs etc. DigitalOcean are only special because they "play" the start-up game - lots of hype, marketing, get journalists on their side to write nice things about them, etc. - and this gives investors something they can bite into. The difference between DigitalOcean and other low end providers is that DigitalOcean isn't interested in making money as a business, they're happy to lose money as long as they get more in the front door from investors. Meanwhile other low end providers look more like lifestyle businesses and thus growing slowly and organically.
      - yogo 13y ago
        No one knows what the future holds. With great value and service there could be a price change or they could be acquired (a la slicehost), but I think it's very hard to depend on some of providers in that price range with poor connectivity and support using that crappy whmcs.
Oculus 13y ago
Their support is absolutely amazing. I opened a ticket to ask a question, submitted it, and before I could navigate away from their website, the ticket had been answered (i.e. within 5 min).
- sjs382 13y ago
  Agreed. I had a question answered in less than a minute earlier today (and it was a dumb, non-critical question—I couldn't figure out where to enter a coupon code)
trekky1700 13y ago
I started with Digital Ocean after I saw them on here and have been nothing but impressed. Seems like really good value, and it's great to have such cheap dev environments to work/play with. Great for budding full stack devs. I'm glad it seems they're here to stay.
jbrooksuk 13y ago
Really well deserved! These guys are awesome, very helpful and friendly, their site is even fun to use.
badclient 13y ago
From DigitalOcean's cofounder on Quora: We applied to TechStars in NYC first because we were based in NYC and we got in right before the early app deadline. After meeting David Tisch at TechStars 4 A Day he flat out told us he doesn't understand our space so it would be hard for him to pick us, because part of his decision is to determine how he as the program director can help accelerate our growth. We did become a finalist but weren't selected and he recommended us to TechStars Boulder. So we flew out there for TechStars 4 A Day and went through the process again. Full post: http://www.quora.com/Startups/If-youre-rejected-from-an-incubator-is-it-okay-reapply-after-youve-made-more-progress-on-your-product http://www.quora.com/Startups/If-youre-rejected-from-an-incu...
mattmaroon 13y ago
I'm not sure seed round means what you think it means.
yapcguy 13y ago
What about their security? Seem to have been quite a few issues recently. From just two days ago, here on HN: "Digitalocean.com has misconfigured their network in a way that allows for anyone to monitor customer network traffic." https://news.ycombinator.com/item?id=6157747 https://news.ycombinator.com/item?id=6157747
- zimbatm 13y ago
  Oversight happens. They responded quickly and sent an email to all their customer explaining the problem and how to fix it.
  - btgeekboy 13y ago
    Hm? I was able to verify the submitter's claims (see thread for details), but have yet to receive any email regarding it. I did receive an email earlier about the duplicate Ubuntu host keys; perhaps that's what you're thinking of?
  - kawsper 13y ago
    They have ignored a security issue from January to July: https://news.ycombinator.com/item?id=6124306 https://news.ycombinator.com/item?id=6124306
nikcub 13y ago
One of my favorite startups. I signed up for a single server some time ago to try them out and was amazed when I saw the control panel, API and the ecosystem that has already built up around the service. To those of you asking what is so special about DO compared to ExyExtraVps.is running stock WHMCS[1] or whatever over at LEB it is that DO are providing the type of features, flexibility and support that Rackspace, AWS and Azure provide but at prices that are close to what the low-end VPS types offer. If you imagine a Gartner-style quadrant for hosting with price on one axis and then features/support/flexibility on another most providers today sit somewhere along a very straight line - you either have a bunch of features and flexibility and are expensive or you are very rigid and cheap. DO is right up in high features but low price, and it seems so obvious in hindsight (Linode were almost there). I now have Vagrant setup with Digital Ocean as a provider[2] so setting up a box is as easy as running 'vagrant up --provider=digital_ocean' and then waiting a minute. There are tons of other tools already built up around their API and the ecosystem is thriving. I have another script setup ready to fire up additional instances of web apps. I'm moving everything I can and that fits from AWS and recommending DO to clients also where it would fit (staging servers, dev servers, backup servers, etc.) There are still some features they need - like load balancing, multiple IP's etc. but this funding means all of that is going to be built sooner. There is a reason why they are one of the fastest growing hosts ever[3]. These guys are destined to get really really big. There is also a great effect wherever digital ocean is mentioned online you find a comment thread with dozens of users saying how awesome they are. You can't buy that type of love. [1] Not to mention that all of that off-the-shelf VPS software running these sites is an absolute security nightmare. The developers rely on hiding their poor code behind ioncube encoding and this has been exposed recently with some big name hacks. [2] https://github.com/smdahlen/vagrant-digitalocean https://github.com/smdahlen/vagrant-digitalocean [3] Netcraft: The meteoric rise of Digital Ocean: http://news.netcraft.com/archives/2013/06/13/the-meteoric-rise-of-digitalocean.html http://news.netcraft.com/archives/2013/06/13/the-meteoric-ri... edit: forgot to include this earlier, but by way of a disclaimer I introduced Digital Ocean to Crunchfund but don't have a financial stake.
- mikevm 13y ago
  I've been out of the webdev loop for years so I've never used Vagrant, but I've read a bit about it and I see it mentioned all the time. I understand that Vagrant is used to quickly set up virtual machines (and all the required software) to replicate a production environment so that you can test your web app on it without having to clutter your own machine with that software. I understand that you can have a Vagrant provider for VMWare and VirtualBox, but what does it mean for you to have a DigitalOcean provider for Vagrant? Also, maybe someone can drop a few words in on the typical usage scenario for Vagrant? Other than automation, how else does Vagrant help a developer, and how does it tie into the various VPS services (such as AWS, DO, etc...)?
ksec 13y ago
Great Now they can accelerate their long list of needed improvement. 1. Private Back End Network. 2. Auto Provision Droplet/Instance on different hardware by default 3. IPv6 4. DC in Asia 5. Something Similar to Amazon Elastic IP. Things i would like Node balancer More Powerful CPU Higher Quality Network ( Although it has gotten a lot better in recent months )
memset 13y ago
This is really neat. One question: How are these folks able to keep such low prices? For example, I run several servers on rackspace. Their least expensive option (512MB RAM, 1 core, 20GB disk) is $16.00 per month. DigitalOcean's is $5.00 per month. On the face of it, they are identical offerings but triple the price. Rackspace does offer other features (load balancing, cloudfiles, and other useful things which integrate nicely with their servers.) Is that the value proposition of AWS/Rackspace over these other companies, which only give you vanilla servers?
- nikcub 13y ago
  Rackspace's gross margin is 72.95%[0] and they are (or were) considered 'fat' (look at the margin trend in that chart to see how they have improved) Some estimate AWS's margins are up around 80% [1] Competition, low cost hardware, building their own stack, open source etc. mean better pricing for us users [0] http://ycharts.com/companies/RAX/gross_profit_margin http://ycharts.com/companies/RAX/gross_profit_margin [1] http://blog.profitbricks.com/the-fake-cloud-price-war/ http://blog.profitbricks.com/the-fake-cloud-price-war/
  - mgaphysics 13y ago
    I tried to Love AWS, but right now I just like their effort. There is something organically that feels right about the way DO has positioned themselves, they can always scale pricing based on additional features added. Yes, there margin is thin, but the the fact that the service is easy to use means less user support issues when adding them at 500 per day.
- snewman 13y ago
  I keep hearing great things about DigitalOcean, but the critical price parameter for me is flash storage, and they don't seem to be beating AWS here. The larger DigitalOcean plans are $1 / GB / month for flash. An EC2 hi1.4xlarge instance has 2TB of flash. At on-demand pricing, $3.10/hr x 24 hours x 30 days == $2232/month, which is slightly more expensive. But reserved instances bring that down very quickly. A "Light Utilization" instance only costs $3884 upfront for a three-year term. Even if you amortize that over just 12 months, it works out to $1152/month, almost 2x as cost-effective as DigitalOcean. (Of course, with DigitalOcean you're getting a lot more CPU and RAM per GB of SSD, but only compared to the h1.4xlarge which is deliberately flash-heavy.) This is not to run down DigitalOcean, but if you take reserved instances into account then they don't necessarily beat EC2 pricing. Or am I missing something?
koa 13y ago
I have two rails SaaS apps that generate increasingly fulltime income on heroku. combined costs currently at $140/month each app has 1 free web dyno, 1 worker, starter postgres DB, ssl, plus a few extras Looking at the new offerings like digital ocean, i'm really tempted to switch over, but a voice in my head keeps telling me it makes no sense as I don't really have strong linux-sysadmin type skills. Even getting rails to work on new macs takes me 1-2 painful days. Anyone have an eta of what it might take someone with limited sysadmin skills to cut over to something like digital ocean from heroku?
- cpursley 13y ago
  http://progrium.com/blog/2013/06/19/dokku-the-smallest-paas-implementation-youve-ever-seen/ http://progrium.com/blog/2013/06/19/dokku-the-smallest-paas-... https://medium.com/code-adventures/438bce155dcb https://medium.com/code-adventures/438bce155dcb && https://flynn.io/ https://flynn.io/
- Afforess 13y ago
  Not long. I had zero sys-admin skills, but DO has a slew of community guides that step by step you through setting up pretty much every application you might need.
- SiliconAlley 13y ago
  My progression has been PaaS -> AWS -> Digital Ocean -> Dedicated and I strongly feel that if you're going to make the leap from PaaS to VPS, it's not a whole lot harder to go dedicated and there you'll find much sweeter value. I'm currently on an OVH SP2 (Xeon + SSD + 32GB ram in a data center in Quebec so not terrible latency to where I am in the northeast US) that I pay $90/mo for (http://www.ovh.com/us/dedicated-servers/sp2.xml http://www.ovh.com/us/dedicated-servers/sp2.xml) and it's just jaw-droppingly powerful. If you're going to go through the trouble of migrating your app anyway, it's worth taking a good look at dedicated offerings like that as well.
  - harshreality 13y ago
    OVH SP-series servers do not use ECC ram. This is unusual in the xeon server space. Even most VPS server providers use it.
jjoe 13y ago
Congratluations to DO! Sadly there's so much hard work involved in this space and so little money ($5/server/mo) to be made in "hosting" that founders always eye an early exit. Also a $5/server strategy is proof this isn't sustainable in the long run. Revenue isn't enough to cover capex. And this kind of growth almost always means founders are looking for an early exit. Yes it's all a happy ending for the founders but what will happen to the end users?
- pavs 13y ago
  I think you might be underestimating how cheap bandwidth and hardware has become at scale. If anything, because of the nature of how VPS work, you can make good money as server hardware gets faster and cheaper.
  - jjoe 13y ago
    There's the people aspect in all of this. What's reasonable pay for a good sysadmin/programmer hybrid? 70k - 100k/yr? How many do you need to keep things running smoothly and build new tools? How many do you need full time for remote hands and provisioning? Hardware prices don't drop so much at this scale unless you're buying in extremely large quantities. Even then and they don't drop as much as bandwidth (except for out of lease equipment and I doubt DO does this).
    - pavs 13y ago
      With newer, more powerful servers they can cram more VPS in to single server. Usually users rarely have continuous CPU usage on small CPUs like that, so in theory you can cram more VPS in a server, without causing any performance issue to other VPS. VPS in general is insanely profitable, if you know what you are doing. The employee aspect will always be there, DO can still make money by not taking outrageous profit margin like AWS and Rackspace.
      - jjoe 13y ago
        I run a similar business (fully managed though). I know for certain that hardware and bandwidth costs are the tip of the proverbial iceberg. Remember there's also colocation, power, contracts, networking equipment (2x10G), and DDoS costs. You don't really charge a client for the bandwidth costs incurred during a DDoS if you choose to absorb the attack. You don't charge a client when a RAID controller fails and you need to restore xTBs of data (xx man hours). Oh and you need to purchase backup nodes, which you're not getting any immediate return on. You need an office. You need to factor in travel costs. Overtime pay. Health insurance, payroll costs, etc. Ads...
tszming 13y ago
I hope DO would consider have a special add-on like: $5 per month per node for priority support (< 1hr response time), then I think more people would consider moving more production systems to DO.
- andrewmunsell 13y ago
  I've actually never had another company respond to support requests faster than DO. Almost every ticket gets a human response in under a minute (often in what seems like seconds), and for the small things (billing related), the problem is usually solved in that minute.
- Thaxll 13y ago
  No serious business would move their production to DO, it's a start-up with cheap price.
arek2 13y ago
#1255 on my top list: http://5000best.com/tools/Cloud/ http://5000best.com/tools/Cloud/
aforty 13y ago
I know them, great group of guys. Congrats!
bluedino 13y ago
Are there features holding people back from going to DO from somewhere like Linode? Load balancing, private backend network, etc?
- sjs382 13y ago
  Lack of a private backend network is something that is keeping me using it, for one of my projects. For my smaller projects, they're great.
- kevin1024 13y ago
  ipv6 support is one of them.
negamax 13y ago
Very good. Just last weekend I migrated from AWS to DO. It is working perfectly for my usage at ~25% of the cost.
hcarvalhoalves 13y ago
I looked at Digital Ocean for an alternative and really liked the prices, but it seems to be missing some pieces to cover more elaborate use-cases. For instance, you can't scale just storage, and they don't provide a CDN. I hope they can add more features while staying price-competitive.
- Kudos 13y ago
  Why do you need the CDN to be provided by DO? For instance, I host at Linode and use Cloudfront for CDN.
ohashi 13y ago
A lot of people keep asking/questioning what makes Digital Ocean special. I can't speak for other people, but I do track what other people say. I've collected ~1,300 opinions on them and people like them more than any other major hosting provider I track (80% positive). Feel free to read the comments for yourselves: http://reviewsignal.com/webhosting/company/101/digitalocean http://reviewsignal.com/webhosting/company/101/digitalocean They are obviously doing something right and a huge congratulations for their fund raise.
jbarham 13y ago
Anecdotally, I recently moved the primary web server for my DNS hosting service (https://www.slickdns.com https://www.slickdns.com) from AWS to Digital Ocean and am getting much better performance at 1/3 of the cost.
bdz 13y ago
(Oh how much I hate their ad http://www.youtube.com/watch?v=vHZLCahai4Q http://www.youtube.com/watch?v=vHZLCahai4Q)
yaldasoft 13y ago
Ive only used DO for staging. Via Cloud66 deploying production to AWS and Staging to DO. Works really well.
dcc1 13y ago
No offence but why would I put my data on US hosted servers? Privacy violations would make liable under the local (a western european country) Data Protection act no thanks
- akx 13y ago
  Then use their Amsterdam data center..?
  - dcc1 13y ago
    Being a US company who is to say they havent been "leaned" on
  - mercer 13y ago
    Hmm, does that matter if the company itself is in the U.S?
dangerden 13y ago
We use DO in our projects as a primary infrastructure. Switched to them from Amazon. Very happy with their service. BTW, I'm shocked that this round was SEED. What happens when they get Series A. Will they continue to change game rules? I think yes.
HNLogInShit 13y ago
So? What are we supposed to do with this information?

208 points by beigeotter 13y ago

Been using their services for a while now. Highly recommended, great hardware for the money.

I'm thinking about using them for my next project. I'm glad to hear the news that they are getting funding. 3.2M is a pretty big seed round though right?

holdenc 13y ago

Pretty amazing that a company like DigitalOcean can shake-up the market for VP servers prior to even taking funding. Their $5 servers have changed the game for nearly every hosting company that offers virtual servers. And to think they've managed to offer this while bootstrapped, is incredible.

deleted 13y ago
[deleted]
yapcguy 13y ago
Not really. How did it change the game for service providers over at LowEndBox.com, who have been providing VPS servers for $5 or less, before DigitalOcean even existed?
- rgbrgb 13y ago
  In my experience, a lot of the services on LowEndBox.com are pretty sketchy. I'd go to production on DA.
  - coolnow 13y ago
    Not really. Most offers on LEB and LET are from recognised and proven providers. There are some fly-by-night providers that pop up over summer and disappear, but actually reading the offers on LEB will tell you how long the company has been offering their services for and how often they post deals. I lurked for less than a day on Lowendtalk and got an idea of the most respected/high quality hosts such as: BuyVM ChicagoVPS Prometeus (and IperWeb) HTTPZoom Iniz Ramnode I've had a box with most of these (apart from Ramnode which is highly regarded) and i can say i've had an awesome experience.
    - nikcub 13y ago
      both ChicagoVPS (for the second time in a year) and Ramnode were hacked a little over a month ago - tons of servers deleted, customer db's dumped online. I think "sketchy" is a good characterization when a pick of the "best" hosts have severe problems.
      - coolnow 13y ago
        So, a vulnerability in the control panel used in probably >90% of all lowendbox providers, combined with a specific person applying the exploit to Ramnode, makes them sketchy now? Man, Apple must be the sketchiest company out there now, you know, with the week long downtime for the Dev Center.
        nikcub 13y ago
        I've audited both WHMCS and Solus. I found a half-dozen bugs in minutes of looking at each codebase. I can't express how horrible this software is that 90% of these hosts are running on - they are both an absolute trainwreck. More hacks are only a matter of time, especially when neither company responds to emails or security incidents well.
        biot 13y ago
        How much real engineering are these providers doing? How well do they understand their stack? If they're all running the same underlying software, it suggests that setting up such an operation doesn't require much skill and it's heading to "script kiddy" territory. Sketchy? Certainly suspect and needing a lot of due diligence which my gut tells me that (a) they won't fare so well; and (b) they are so low-margin that they would be unwilling to participate. If Apple got hacked because their dev center was powered by a $10 control panel script then yeah... they'd be extremely sketchy too.
- dscb 13y ago
  Hourly Billing Stored backups (for free) of servers that you can set up at a later date instantly via an api It's not about being a $5 vps for me, it's about being able to pay $0.014 when I need a small vps for 2 hours.
  - jeffasinger 13y ago
    Hourly billing is huge for us. Our service is mostly CPU bound, embarrassingly parallel, and so far, 90% of usage is centered on a time slot that's about 8 hours per week long. We will save a ton of money by scaling down during the off hours, which means only Amazon, Rackspace, and a few others make any sense at all.
    - nthnclrk 13y ago
      I agree. This was massive for me. Being able to create a Droplet (from an existing backup) within a minute, test out an installation for a day, and have it cost almost nothing is huge.
- pbreit 13y ago
  Is LowEndBox and actual provider or just a listing service? The two don't even appear similar to me.
  - coolnow 13y ago
    It just lists offers from actual providers.

suhailpatel 13y ago

Congrats to the DigitalOcean team. I moved my personal server from Linode London to DigitalOcean Amsterdam-1 and haven't had any issues at all and latency is only 2-3ms more from London compared to my old Linode box which is completely acceptable for me. Support is also extremely responsive.

taf2 13y ago
Interesting so I tried digital ocean and was at first pleased but with constant network outages and no private network support it was not ready for a production env as far as I could tell - for toy projects definitely nice and if they get the private network up and resolve their stability issues I'd definitely give it another go
- raiyu 13y ago
  As we were scaling up our network we ran into a few issues and had to work with our vendors to resolve them. Quoted metrics for support for ARP and MAC addresses on devices didn't match what we were seeing in production but we were able to get that resolved, so you shouldn't see those issues recurring.

whitehat2k9 13y ago

I really don't get why DigitalOcean is so special. The $5/month VPS is nothing new, and in many, if not most cases you can do a lot better. I'm currently paying $2/month for a 512MB OpenVZ VPS and $6.50/month for a 1GB Xen VPS.

bpicolo 13y ago
1. SSDs 2. Exceptional user experience
ddrager 13y ago
- The SSDs are a main selling point - Their website is easy to use and clear - Access via a simple API I've used them for some side projects - although they aren't feature-full for bigger ones, they are great to use.
- brandon272 13y ago
  RamNode has been offering less expensive SSD VPS hosting for longer than DigitalOcean has been around.
  - yapcguy 13y ago
    Exactly. There are lots of providers on LowEndBox.com and many have them have SSDs etc. DigitalOcean are only special because they "play" the start-up game - lots of hype, marketing, get journalists on their side to write nice things about them, etc. - and this gives investors something they can bite into. The difference between DigitalOcean and other low end providers is that DigitalOcean isn't interested in making money as a business, they're happy to lose money as long as they get more in the front door from investors. Meanwhile other low end providers look more like lifestyle businesses and thus growing slowly and organically.
    - yogo 13y ago
      No one knows what the future holds. With great value and service there could be a price change or they could be acquired (a la slicehost), but I think it's very hard to depend on some of providers in that price range with poor connectivity and support using that crappy whmcs.

Oculus 13y ago

Their support is absolutely amazing. I opened a ticket to ask a question, submitted it, and before I could navigate away from their website, the ticket had been answered (i.e. within 5 min).

sjs382 13y ago
Agreed. I had a question answered in less than a minute earlier today (and it was a dumb, non-critical question—I couldn't figure out where to enter a coupon code)

trekky1700 13y ago

I started with Digital Ocean after I saw them on here and have been nothing but impressed. Seems like really good value, and it's great to have such cheap dev environments to work/play with. Great for budding full stack devs. I'm glad it seems they're here to stay.

jbrooksuk 13y ago

Really well deserved! These guys are awesome, very helpful and friendly, their site is even fun to use.

badclient 13y ago

From DigitalOcean's cofounder on Quora: We applied to TechStars in NYC first because we were based in NYC and we got in right before the early app deadline. After meeting David Tisch at TechStars 4 A Day he flat out told us he doesn't understand our space so it would be hard for him to pick us, because part of his decision is to determine how he as the program director can help accelerate our growth. We did become a finalist but weren't selected and he recommended us to TechStars Boulder. So we flew out there for TechStars 4 A Day and went through the process again. Full post: http://www.quora.com/Startups/If-youre-rejected-from-an-incubator-is-it-okay-reapply-after-youve-made-more-progress-on-your-product http://www.quora.com/Startups/If-youre-rejected-from-an-incu...

mattmaroon 13y ago

I'm not sure seed round means what you think it means.

yapcguy 13y ago

What about their security? Seem to have been quite a few issues recently. From just two days ago, here on HN: "Digitalocean.com has misconfigured their network in a way that allows for anyone to monitor customer network traffic." https://news.ycombinator.com/item?id=6157747 https://news.ycombinator.com/item?id=6157747

zimbatm 13y ago
Oversight happens. They responded quickly and sent an email to all their customer explaining the problem and how to fix it.
- btgeekboy 13y ago
  Hm? I was able to verify the submitter's claims (see thread for details), but have yet to receive any email regarding it. I did receive an email earlier about the duplicate Ubuntu host keys; perhaps that's what you're thinking of?
- kawsper 13y ago
  They have ignored a security issue from January to July: https://news.ycombinator.com/item?id=6124306 https://news.ycombinator.com/item?id=6124306

nikcub 13y ago

One of my favorite startups. I signed up for a single server some time ago to try them out and was amazed when I saw the control panel, API and the ecosystem that has already built up around the service. To those of you asking what is so special about DO compared to ExyExtraVps.is running stock WHMCS[1] or whatever over at LEB it is that DO are providing the type of features, flexibility and support that Rackspace, AWS and Azure provide but at prices that are close to what the low-end VPS types offer. If you imagine a Gartner-style quadrant for hosting with price on one axis and then features/support/flexibility on another most providers today sit somewhere along a very straight line - you either have a bunch of features and flexibility and are expensive or you are very rigid and cheap. DO is right up in high features but low price, and it seems so obvious in hindsight (Linode were almost there). I now have Vagrant setup with Digital Ocean as a provider[2] so setting up a box is as easy as running 'vagrant up --provider=digital_ocean' and then waiting a minute. There are tons of other tools already built up around their API and the ecosystem is thriving. I have another script setup ready to fire up additional instances of web apps. I'm moving everything I can and that fits from AWS and recommending DO to clients also where it would fit (staging servers, dev servers, backup servers, etc.) There are still some features they need - like load balancing, multiple IP's etc. but this funding means all of that is going to be built sooner. There is a reason why they are one of the fastest growing hosts ever[3]. These guys are destined to get really really big. There is also a great effect wherever digital ocean is mentioned online you find a comment thread with dozens of users saying how awesome they are. You can't buy that type of love. [1] Not to mention that all of that off-the-shelf VPS software running these sites is an absolute security nightmare. The developers rely on hiding their poor code behind ioncube encoding and this has been exposed recently with some big name hacks. [2] https://github.com/smdahlen/vagrant-digitalocean https://github.com/smdahlen/vagrant-digitalocean [3] Netcraft: The meteoric rise of Digital Ocean: http://news.netcraft.com/archives/2013/06/13/the-meteoric-rise-of-digitalocean.html http://news.netcraft.com/archives/2013/06/13/the-meteoric-ri... edit: forgot to include this earlier, but by way of a disclaimer I introduced Digital Ocean to Crunchfund but don't have a financial stake.

mikevm 13y ago
I've been out of the webdev loop for years so I've never used Vagrant, but I've read a bit about it and I see it mentioned all the time. I understand that Vagrant is used to quickly set up virtual machines (and all the required software) to replicate a production environment so that you can test your web app on it without having to clutter your own machine with that software. I understand that you can have a Vagrant provider for VMWare and VirtualBox, but what does it mean for you to have a DigitalOcean provider for Vagrant? Also, maybe someone can drop a few words in on the typical usage scenario for Vagrant? Other than automation, how else does Vagrant help a developer, and how does it tie into the various VPS services (such as AWS, DO, etc...)?

ksec 13y ago

Great Now they can accelerate their long list of needed improvement. 1. Private Back End Network. 2. Auto Provision Droplet/Instance on different hardware by default 3. IPv6 4. DC in Asia 5. Something Similar to Amazon Elastic IP. Things i would like Node balancer More Powerful CPU Higher Quality Network ( Although it has gotten a lot better in recent months )

memset 13y ago

This is really neat. One question: How are these folks able to keep such low prices? For example, I run several servers on rackspace. Their least expensive option (512MB RAM, 1 core, 20GB disk) is $16.00 per month. DigitalOcean's is $5.00 per month. On the face of it, they are identical offerings but triple the price. Rackspace does offer other features (load balancing, cloudfiles, and other useful things which integrate nicely with their servers.) Is that the value proposition of AWS/Rackspace over these other companies, which only give you vanilla servers?

nikcub 13y ago
Rackspace's gross margin is 72.95%[0] and they are (or were) considered 'fat' (look at the margin trend in that chart to see how they have improved) Some estimate AWS's margins are up around 80% [1] Competition, low cost hardware, building their own stack, open source etc. mean better pricing for us users [0] http://ycharts.com/companies/RAX/gross_profit_margin http://ycharts.com/companies/RAX/gross_profit_margin [1] http://blog.profitbricks.com/the-fake-cloud-price-war/ http://blog.profitbricks.com/the-fake-cloud-price-war/
- mgaphysics 13y ago
  I tried to Love AWS, but right now I just like their effort. There is something organically that feels right about the way DO has positioned themselves, they can always scale pricing based on additional features added. Yes, there margin is thin, but the the fact that the service is easy to use means less user support issues when adding them at 500 per day.
snewman 13y ago
I keep hearing great things about DigitalOcean, but the critical price parameter for me is flash storage, and they don't seem to be beating AWS here. The larger DigitalOcean plans are $1 / GB / month for flash. An EC2 hi1.4xlarge instance has 2TB of flash. At on-demand pricing, $3.10/hr x 24 hours x 30 days == $2232/month, which is slightly more expensive. But reserved instances bring that down very quickly. A "Light Utilization" instance only costs $3884 upfront for a three-year term. Even if you amortize that over just 12 months, it works out to $1152/month, almost 2x as cost-effective as DigitalOcean. (Of course, with DigitalOcean you're getting a lot more CPU and RAM per GB of SSD, but only compared to the h1.4xlarge which is deliberately flash-heavy.) This is not to run down DigitalOcean, but if you take reserved instances into account then they don't necessarily beat EC2 pricing. Or am I missing something?

koa 13y ago

I have two rails SaaS apps that generate increasingly fulltime income on heroku. combined costs currently at $140/month each app has 1 free web dyno, 1 worker, starter postgres DB, ssl, plus a few extras Looking at the new offerings like digital ocean, i'm really tempted to switch over, but a voice in my head keeps telling me it makes no sense as I don't really have strong linux-sysadmin type skills. Even getting rails to work on new macs takes me 1-2 painful days. Anyone have an eta of what it might take someone with limited sysadmin skills to cut over to something like digital ocean from heroku?

cpursley 13y ago
http://progrium.com/blog/2013/06/19/dokku-the-smallest-paas-implementation-youve-ever-seen/ http://progrium.com/blog/2013/06/19/dokku-the-smallest-paas-... https://medium.com/code-adventures/438bce155dcb https://medium.com/code-adventures/438bce155dcb && https://flynn.io/ https://flynn.io/
Afforess 13y ago
Not long. I had zero sys-admin skills, but DO has a slew of community guides that step by step you through setting up pretty much every application you might need.
SiliconAlley 13y ago
My progression has been PaaS -> AWS -> Digital Ocean -> Dedicated and I strongly feel that if you're going to make the leap from PaaS to VPS, it's not a whole lot harder to go dedicated and there you'll find much sweeter value. I'm currently on an OVH SP2 (Xeon + SSD + 32GB ram in a data center in Quebec so not terrible latency to where I am in the northeast US) that I pay $90/mo for (http://www.ovh.com/us/dedicated-servers/sp2.xml http://www.ovh.com/us/dedicated-servers/sp2.xml) and it's just jaw-droppingly powerful. If you're going to go through the trouble of migrating your app anyway, it's worth taking a good look at dedicated offerings like that as well.
- harshreality 13y ago
  OVH SP-series servers do not use ECC ram. This is unusual in the xeon server space. Even most VPS server providers use it.

jjoe 13y ago

Congratluations to DO! Sadly there's so much hard work involved in this space and so little money ($5/server/mo) to be made in "hosting" that founders always eye an early exit. Also a $5/server strategy is proof this isn't sustainable in the long run. Revenue isn't enough to cover capex. And this kind of growth almost always means founders are looking for an early exit. Yes it's all a happy ending for the founders but what will happen to the end users?

pavs 13y ago
I think you might be underestimating how cheap bandwidth and hardware has become at scale. If anything, because of the nature of how VPS work, you can make good money as server hardware gets faster and cheaper.
- jjoe 13y ago
  There's the people aspect in all of this. What's reasonable pay for a good sysadmin/programmer hybrid? 70k - 100k/yr? How many do you need to keep things running smoothly and build new tools? How many do you need full time for remote hands and provisioning? Hardware prices don't drop so much at this scale unless you're buying in extremely large quantities. Even then and they don't drop as much as bandwidth (except for out of lease equipment and I doubt DO does this).
  - pavs 13y ago
    With newer, more powerful servers they can cram more VPS in to single server. Usually users rarely have continuous CPU usage on small CPUs like that, so in theory you can cram more VPS in a server, without causing any performance issue to other VPS. VPS in general is insanely profitable, if you know what you are doing. The employee aspect will always be there, DO can still make money by not taking outrageous profit margin like AWS and Rackspace.
    - jjoe 13y ago
      I run a similar business (fully managed though). I know for certain that hardware and bandwidth costs are the tip of the proverbial iceberg. Remember there's also colocation, power, contracts, networking equipment (2x10G), and DDoS costs. You don't really charge a client for the bandwidth costs incurred during a DDoS if you choose to absorb the attack. You don't charge a client when a RAID controller fails and you need to restore xTBs of data (xx man hours). Oh and you need to purchase backup nodes, which you're not getting any immediate return on. You need an office. You need to factor in travel costs. Overtime pay. Health insurance, payroll costs, etc. Ads...

tszming 13y ago

I hope DO would consider have a special add-on like: $5 per month per node for priority support (< 1hr response time), then I think more people would consider moving more production systems to DO.

andrewmunsell 13y ago
I've actually never had another company respond to support requests faster than DO. Almost every ticket gets a human response in under a minute (often in what seems like seconds), and for the small things (billing related), the problem is usually solved in that minute.
Thaxll 13y ago
No serious business would move their production to DO, it's a start-up with cheap price.

arek2 13y ago

#1255 on my top list: http://5000best.com/tools/Cloud/ http://5000best.com/tools/Cloud/

aforty 13y ago

I know them, great group of guys. Congrats!

bluedino 13y ago

Are there features holding people back from going to DO from somewhere like Linode? Load balancing, private backend network, etc?

sjs382 13y ago
Lack of a private backend network is something that is keeping me using it, for one of my projects. For my smaller projects, they're great.
kevin1024 13y ago
ipv6 support is one of them.

negamax 13y ago

Very good. Just last weekend I migrated from AWS to DO. It is working perfectly for my usage at ~25% of the cost.

hcarvalhoalves 13y ago

I looked at Digital Ocean for an alternative and really liked the prices, but it seems to be missing some pieces to cover more elaborate use-cases. For instance, you can't scale just storage, and they don't provide a CDN. I hope they can add more features while staying price-competitive.

Kudos 13y ago
Why do you need the CDN to be provided by DO? For instance, I host at Linode and use Cloudfront for CDN.

ohashi 13y ago

A lot of people keep asking/questioning what makes Digital Ocean special. I can't speak for other people, but I do track what other people say. I've collected ~1,300 opinions on them and people like them more than any other major hosting provider I track (80% positive). Feel free to read the comments for yourselves: http://reviewsignal.com/webhosting/company/101/digitalocean http://reviewsignal.com/webhosting/company/101/digitalocean They are obviously doing something right and a huge congratulations for their fund raise.

jbarham 13y ago

Anecdotally, I recently moved the primary web server for my DNS hosting service (https://www.slickdns.com https://www.slickdns.com) from AWS to Digital Ocean and am getting much better performance at 1/3 of the cost.

bdz 13y ago

(Oh how much I hate their ad http://www.youtube.com/watch?v=vHZLCahai4Q http://www.youtube.com/watch?v=vHZLCahai4Q)

yaldasoft 13y ago

Ive only used DO for staging. Via Cloud66 deploying production to AWS and Staging to DO. Works really well.

dcc1 13y ago

No offence but why would I put my data on US hosted servers? Privacy violations would make liable under the local (a western european country) Data Protection act no thanks

akx 13y ago
Then use their Amsterdam data center..?
- dcc1 13y ago
  Being a US company who is to say they havent been "leaned" on
- mercer 13y ago
  Hmm, does that matter if the company itself is in the U.S?

dangerden 13y ago

We use DO in our projects as a primary infrastructure. Switched to them from Amazon. Very happy with their service. BTW, I'm shocked that this round was SEED. What happens when they get Series A. Will they continue to change game rules? I think yes.

HNLogInShit 13y ago

So? What are we supposed to do with this information?