Careers at DigitalOcean
DigitalOcean’s mission is to make developers‘ lives easier.
Brothers Ben and Moisey Uretsky founded a managed hosting company called ServerStack while they were still in college. After graduating and running the firm for several years, they determined they wanted to create a new service that would combine the ideas of web hosting and virtual servers. They studied the cloud hosting industry and noticed that most providers were focused on large corporations. However, few paid attention to individual software developers, even entrepreneurial ones. They decided to make this group the target market for their new offering.
In 2011, along with Mitch Wainer, they founded DigitalOcean, a provider of cloud hosting and server provisioning services. Their goal was to offer the simplest cloud infrastructure experience possible to assist developers. The team introduced a beta version of the software in early 2012. Later that year they were welcomed into TechStar 2012’s startup accelerator. They spent months enhancing and promoting the product, and by the end of the program they had 400 customers (many of whom had joined from their last company) and had launched approximately 10,000 cloud server instances.
Over the next few years the company raised significant funding. This included $5.2 million in 2013, $87 million in 2014, $83 million in 2015, and $130 million in 2016. Investors included prominent names such as IA Ventures, Andreessen Horowitz, Access Industries, and KeyBanc Capital Markets. It also achieved a number of milestones. In January 2013, it became one of the first cloud-hosting firms to provide SSD-based virtual machines. In December of that year, it unveiled its first European data center. It is now the world’s second biggest hosting provider for web-facing computers.
Benefits at DigitalOcean
Business model of DigitalOcean
DigitalOcean has a niche market business model, with a specialized customer segment. The company targets its offering at software developers who need to launch and scale their applications.
DigitalOcean offers four primary value propositions: accessibility, performance, price, and brand/status.
The company creates accessibility by offering a wide variety of distributions and applications. Its platform provides five well-known Linux distributions that can be pre-installed upon server deployment: Ubuntu, Debian, CentOS, CoreOS, and Fedora. Numerous application stacks can be installed with a single click, including LEMP, LAMP, Docker, and MEAN. Also available are development frameworks such as Django, Ruby on Rails, and node, applications such as CMS solutions Ghost and Wordpress, and eCommerce software programs such as Magento.
The company’s solution offers strong performance. Its servers use high-performing Solid State Disks. This provides an advantage over shared hosting in that cloud servers can be live and configurable within 55 seconds. It also provides an advantage over dedicated servers in that it allows on-the-fly scaling – expanding disk size takes less than an hour, while changing the volume of RAM on a box can be achieved with a simple reboot. Furthermore, the solution offers a 99.99% uptime SLA around power, network, and virtual server availability.
The company provides its solution at a relatively low price. Hosting begins at $5 per month. DigitalOcean is able to offer this amount due to various advantages, including favorable financing terms with vendors and the fact that it only offers cloud servers. The firm also provides value by not charging a setup fee or having a minimum spending requirement.
The company has established a powerful brand due to its success. It serves 650,000 developers in 196 countries, utilizing 11 data centers. It has also achieved a number of milestones, including becoming the fastest-growing cloud hosting service and the second-largest hosting company in the world in the area of web-facing computers.
DigitalOcean’s main channel is its website. It also utilizes a direct sales team to acquire customers. The company promotes its offering through its social media pages.
DigitalOcean’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website includes articles, over 1,395 systems administration and development tutorials, and answers to frequently asked questions. That said, there is also a personal assistance component in the form of phone and e-mail support, as well as one-on-one consultations at no extra cost.
DigitalOcean’s business model entails maintaining and enhancing its platform for developers.
DigitalOcean maintains the following two partnership programs:
Customer Referral Program - The company invites customers to refer friends to the service. Friends who sign up receive $10 in account credits. Once they reach $25 in billings, the referring customer receives $25 in a payout or account credits.
Tech Tutorials – The company invites customers to write tutorials on Linux and FreeBSD cloud hosting that it can publish on its website. All that is required is some technical knowledge, as its editorial staff will polish the writing. Individuals whose pieces are selected can earn up to $200.
Beyond these two programs, the company forms partnerships from time-to-time with other service providers. For example, it has an alliance with GitHub through which it provides students with free access to developer tools and offers a credit to their accounts on the platform.
DigitalOcean’s main resource is its proprietary software platform, which serves more than 650,000 developers. An important physical resource is its collection of 11 data centers around the world. It also depends on human resources in the form of its engineering employees to maintain the platform and its customer service staff to provide support. Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $305.21 million from six investors as of April 2016.
DigitalOcean has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely research and development expenses, a fixed cost. Other major drivers are in the areas of sales/marketing and customer support/operations, also fixed costs.
DigitalOcean has one revenue stream: subscription fees. The company offers the following options:
- $5/month (or $0.007/hour) for 512 MB/1 CPU, 20 GB SSD Disk, and 1 TB Transfer
- $10/month (or $0.015/hour) for 1 GB/1 CPU, 30 GB SSD Disk, and 2 TB Transfer
- $20/month (or $0.03/hour) for 2 GB/ 2 CPU, 40 GB SSD Disk, and 3 TB Transfer
- $40/month (or $0.06/hour) for 4 GB/ 2 CPU, 60 GB SSD Disk, and 4 TB Transfer
- $80/month (or $0.119/hour) for 8 GB/ 4 CPU, 80 GB SSD Disk, and 5 TB Transfer
info: Ben earned a Bachelor’s degree in Information Systems from Pace University. He previously served as CEO of ServerStack. He has more than 15 years of experience in network engineering, including significant work with VoIP technology.
info: Moisey earned a Bachelor’s degree in Mathematics from New York University. He previously served as Co-Founder and President of ServerStack and Co-Founder and Managing Partner of Corre Group.
info: Mitch earned a B.S. in Marketing and Entrepreneurship at Northeastern University. He previously served as Director of Marketing at ServerStack and Director of Digital Marketing and Branding at Thunder Factory.
info: Karl earned a BEng in Electrical/Electronic Engineering at the Imperial College of London and an MBA at Columbia University. He previously served as the Co-Founder and CEO of China Export Finance and the Co-Founder and CEO of Clearview Networks.
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