9 ms·
DigitalOcean Receives $50M in Funding
- peterjancelis 12y agoMaybe the title can mention that this 50 million is a credit facility, not equity funding.
- INTPenis 12y agoSo what is that to us who don't speak English natively, a loan?
- InclinedPlane 12y agoYes, it's money now in exchange for money in the future, vs money now in exchange for ownership.
- petercooper 12y agoSort of. It's a "line of credit" which, ideally, means potentially money now in exchange for potential future money, more like an overdraft than a loan. That is, they shouldn't be paying interest on $50m sitting in their bank account right now, but would instead pay interest on what of the $50m they actually choose to use. I don't know if it's different in the US though. I recall Richard Branson mentioning this sort of arrangement a lot in his autobiography as to how Virgin managed to keep going.
- denis1 12y agoWouldn't this be a better deal than money in exchange for ownership? I mean, they get the money and still have control of the company.
- lukasm 12y agoCompanies take debt to optimise tax.
- edwinyzh 12y agoWell, I need to ask what does this mean, I appreciate it if anybody can explain in with an example :)
- mynegation 12y agoThe better wikipedia article would be http://en.wikipedia.org/wiki/Tax_shield http://en.wikipedia.org/wiki/Tax_shield Debt itself (as a liability) is definitely not deducted from profit, but repayment of debt is deducted from the profit, and - what is more important - interest on debt is deducted from the tax base as a result. Which means that if you can load up on debt to get higher return, than you would get investing your own money.
- denis1 12y ago@edwinyzh as I understand it, basically you deduct the debt from the profit and pay taxes only for the remaining amount. Wikipedia has a very short article on this [1]. [1]: https://en.wikipedia.org/wiki/Tax_benefits_of_debt https://en.wikipedia.org/wiki/Tax_benefits_of_debt
- icelancer 12y agoYes, but not all companies can raise $50mm on credit. Digital Ocean is already well-established. If you're a start-up, people aren't generally interested in investing X dollars at a small percentage return.
- InclinedPlane 12y agoYes, exactly. But getting a loan or a line of credit in the multi-million dollar range implies a certain level of trust in the viability of your company which typically is lacking in most early stage startups. The risk associated with venture capital transforms that relationship into not merely a financial transaction but more of a partnership, which is why equity is typically given.
- mbesto 12y agoActually, in simple terms it's like having a big credit card with $50m in a line of credit. Saying this is funding is like saying I just received $5,000 every time I open a credit card.
- fredguth 12y agoLoan funding is still funding. In the startup world people think funding== equity funding, but that is not true. Equity funding is normally the most expensive kind of funding. Glad to see they can grow with loans instead.
- peterjancelis 12y agoYes, totally agree. Any rational entrepreneur leverages his solvency into debt funding.
- jetskindo 12y agoIs digital ocean profitable ? Is the 5 dollars server killing them or putting them on top of chart ?
- anewhnaccount 12y agoYes. Since the second half of 2012. Source: http://dealbook.nytimes.com/2014/03/06/andreessen-horowitz-backs-digitalocean-a-cloud-computing-start-up/?_php=true&_type=blogs&_r=0 http://dealbook.nytimes.com/2014/03/06/andreessen-horowitz-b... They're hardly the only VPS provider offering that price point. (Although it's true, many of the others have a slightly fly-by-night look about them. But by no means all of them.)
- nonuby 12y agoSadly 99.9% of the other companies are shitty solusvm customers who dont understand the hypervisors they are using, and completely fail to manage resources properly, resulting in retarded TOS such "a load average of more than 1.0 for more than 15 minutes" results in warning/suspension/ban. You'd be insane to trust any production stuff to retard kiddie hosts from LowEndBox or WHT.
- icelancer 12y agoDefinitely. These are good for VPN/proxy endpoints in various geographic areas to test servers or get around restrictions and not much else. I use the cheap VPS boxes for backup static file hosting for my products, but I serve everything primarily off Amazon S3.
- blfr 12y agoOVH offers KVM virtual servers with SSD starting at $2.5/mo[1], and announced they will have an even smaller $1.25/mo plan[2]. All that with more memory than DO. I'm guessing that VPS providers have a low support cost/customer compared to shared hosting. No hairy compatibility issues, everything is neatly abstracted away, everyone has their own, independent environment with most of the administrative tasks offloaded onto the user. After you toss in a few guides that double as marketing, and are usually written by the users themselves, all that's left is to take care of the hardware and bill. [1] https://www.runabove.com/index.xml#compute https://www.runabove.com/index.xml#compute [2] https://twitter.com/olesovhcom/status/524334437039747073 https://twitter.com/olesovhcom/status/524334437039747073
- butwhy 12y agoIt blows my mind that this is happening. Back in the day, there were a thousand cheapo VPS providers out there with similar rates. But DO were the ones to put up an extremely simplified interface to spinning up VMs and that has seen them skyrocket (I'm not saying this is a bad thing). At the end of the day, I feel sorry for linode. The guys who offer a much better service (in almost every way) and are often overlooked by many customers.
- coding4all 12y agoDoesn't Linode have a really bad security record?
- butwhy 12y agoThey've been hit with a coldfusion 0day in the past, but the stuff that has happened to them could happen to anyone. I wouldn't have much to critique about their security practices.
- tptacek 12y agoThat's incorrect along a couple different axes. The biggest problem is, most providers wouldn't be hosting ColdFusion code at all; ColdFusion is archaic and has a terrible security track record. But even if they'd built that UI in Scala, the onus is on the hosting provider to make sure the code is safe. Being a hosting provider is a big, big deal. They have less margin for security errors than almost any kind of tech company.
- jacques_chester 12y agoDigitalOcean offered SSD-backed VMs at low prices. They were one of the first to do so. I was very happy with Linode, but they dragged their feet for years on it. My workload was I/O-bound and I got far more bang for my buck from DigitalOcean, so I jumped.
- tim333 12y agoI signed up for DO because they were $5/mo and at the time Linode was $20. Twenty bucks is fine for production but for hobbyist mucking about, which I would classify my usage as, it's a bit steep. I image many users are in a similar situation.
- jawngee 12y agoAwesome, maybe now they can afford to accept debit cards.
- morganvachon 12y agoI never had a problem paying via debit card when I used them. I don't have any active droplets with them right now, but I've always paid with my bank issued debit card, and looking at it now it's still the active payment method on my account.
- xtrumanx 12y agoThey also don't accept prepaid cards since they've said 80% of fraud cases involve prepaid cards. Linode took my money and worked well but they don't have a $5 price point.
- dagw 12y agoI've always used a debit card to pay for my DO server and it's never been a problem (although it's been maybe a year since last time).
- isramartinez 12y agoI've been using my visa debit card (europe) without problem since more than a year ago
- paukiatwee 12y agoRecently one of my production node landed on a bad physical host, DO reboot my node twice within 24 hours, I tweeted about it and DO support open a ticket for me. Since the physical node have problem, I plan to take snapshot then spin up a new node using the image. However, as the physical node have problem, the snapshot take more than 7 hours and still failed to snapshot (No way to cancel snapshot task). DO support told me the snapshot is running, but I seriously think their support not honest about it and I ask they provide proof to show the snapshot is moving, they failed to do so. (From UI I can see JSON response show progress stuck at 3%, they lied) Yesterday, DO reboot again my node. Just my two cent, never ever use DO for serious production usage.
- ghshephard 12y agoAlternative perspective - Recognize any time you use a cloud provider, you need to be aware that not only are the nodes ephemeral, but the zone/data center you are deploying on may go down as well. Plan for your server to go down at any time, and, if you have actual $$$ in play, also plan for the zone to go down. Amazon encourages this thinking by having very low-latency links between AZ (Availability Zones) - and they also recommend deploying in two geographical regions should a regional disaster occur.
- paukiatwee 12y agoI know that all. The point is, DO support lied. After reboot, they still put my node in bad physical host. Also, DO reboot without notice (AWS have EC2 events).
- toomuchtodo 12y agoAmazon has a robust ecosystem of supporting services and APIs to enable you to orchestrate as you described. DigitalOcean does not.
- WorldWideWayne 12y agoWhy would you tweet about it before opening a support ticket yourself?
- 12y ago
- tim333 12y agoIt'll be interesting to see if the Mesosphere thing takes off. It seems to be up and running with a 10 instance cluster for 30c/hr. https://news.ycombinator.com/item?id=8521311 https://news.ycombinator.com/item?id=8521311 http://thenewstack.io/mesosphere-now-supported-on-digital-ocean-for-scaling-and-managing-apps-without-devops-hell/ http://thenewstack.io/mesosphere-now-supported-on-digital-oc...
- gedrap 12y agoI really like the content marketing approach DO took. If you google for some standard server maintenance problem (e.g. migrating from Apache to nginx), it's usually DO which is ranked first. Their posts are relatively high quality, and there are a lot of them, enough to cover many common problems. For example: https://www.digitalocean.com/community/tutorials/how-to-migrate-from-an-apache-web-server-to-nginx-on-an-ubuntu-vps https://www.digitalocean.com/community/tutorials/how-to-migr... It doesn't show annoying pop ups, anything like that, but after visiting those pages many times you might decide to give DO a go. Well, that's what I did. Also, some people say that similar cheap VPS providers exist for a long time and what DO did was put a nice simple UI. That proves that to create a successful product, you don't need some new complicated features that your competitors do not offer. Making interactions with the system easier, improving user onboarding process by reducing friction can go a long way.
- freebs 12y agoYep, this is how marketing is done these days. I'm glad someone on HN is appreciating good marketing. I often see devs refer to marketing as snake oil, simply because they've been exposed to bad marketing. Marketing is just like programming, it can be good or bad.
- finishingmove 12y agoI can't stress enough how much I appreciate the conciseness in their blog post tutorials. Major kudos!
- raiyu 12y agoThanks! Etel wrote many of the articles herself before building out an amazing team. She works really hard to make the articles engaging, informative, and easy to read.
- jtolj 12y agoI think it was Slicehost that pioneered this approach for VPS hosting companies quite a while ago, although it may also have been Linode as I really didn't become aware of them until Rackspace bought Slicehost and I had to migrate.
- wambotron 12y agoI use and enjoy DigitalOcean. Good community docs, good support all around. I've referred a few people to it as well. I'm hoping they keep their support/pricing even if they get big.