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.
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.
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?
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?
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?
My guess is that they're a) using cheap SSD's, and b) charging at or below cost now so that when a price drop hits in a year or so's time they'll be instantly, hugely profitable.
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.
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...)?
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).
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.
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?
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.
It's definitely a tough market, and competing with Jeff Bezos in a low margin market is certainly not an enviable position, however it's certainly possible.
You can buy a 1U server that could fit 100 DO sized droplets for about $5,000. Scale that up a little bit, and you can see that it might be profitable although low margin.
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.
Once you get in the under $10 vps offerings it's highly hit or miss. After all, this is the you get what you pay for price range. At $5/mo DO's offering is roughly on par with what you get from Linode or the former Slicehost. This is what makes them special IMO. I'm always evaluating $2 and $3 offerings from lowendbox and so 90% of them suck. Plus I would only trust those for use as backup servers and wouldn't bring them near anything that needs reliability.
My cheaper VPS option doesn't allow you to spin up servers on demand or offer prorated billing. So while there may be cheaper, DO seems the cheapest for the flexibility it has.
In addition to what sibling comments say, DO uses KVM which a) gives better isolation and dedicated RAM, and b) looks and acts much more like a normal Linux machine. I've had issues re-using things like firewall rules on an OpenVZ VM.
Because Railscasts switched to Digital Ocean a few months back...In all seriousness Digital Ocean is a great product and I have nothing but good things to say. The command line tool Tugboat is quite a joy to use and they keep adding new features all the time.
If the thing you're hosting on the 512MB VPS all of a sudden needs more RAM/Cores for a few days or hours, how long would it take you to fix? If you want to create a few clones of the server in its current state, how long would that take?
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.
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 )
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?
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) 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.
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.
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?
Anecdotally, I recently moved the primary web server for my DNS hosting service (https://www.slickdns.com) from AWS to Digital Ocean and am getting much better performance at 1/3 of the cost.
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).
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.
[+] [-] badclient|12 years ago|reply
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-incu...
[+] [-] holdenc|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] yapcguy|12 years ago|reply
[+] [-] memset|12 years ago|reply
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|12 years ago|reply
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
[1] http://blog.profitbricks.com/the-fake-cloud-price-war/
[+] [-] snewman|12 years ago|reply
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?
[+] [-] regularfry|12 years ago|reply
[+] [-] nikcub|12 years ago|reply
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
[3] Netcraft: The meteoric rise of Digital Ocean: 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|12 years ago|reply
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...)?
[+] [-] Oculus|12 years ago|reply
[+] [-] trekky1700|12 years ago|reply
[+] [-] jjoe|12 years ago|reply
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|12 years ago|reply
[+] [-] jeffasinger|12 years ago|reply
You can buy a 1U server that could fit 100 DO sized droplets for about $5,000. Scale that up a little bit, and you can see that it might be profitable although low margin.
[+] [-] wyck|12 years ago|reply
[+] [-] yapcguy|12 years ago|reply
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
[+] [-] zimbatm|12 years ago|reply
[+] [-] whitehat2k9|12 years ago|reply
[+] [-] ddrager|12 years ago|reply
- 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.
[+] [-] yogo|12 years ago|reply
[+] [-] ishbits|12 years ago|reply
[+] [-] zrail|12 years ago|reply
[+] [-] wickchuck|12 years ago|reply
[+] [-] bpicolo|12 years ago|reply
2. Exceptional user experience
[+] [-] dagw|12 years ago|reply
[+] [-] da02|12 years ago|reply
[+] [-] suhailpatel|12 years ago|reply
[+] [-] ksec|12 years ago|reply
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 )
[+] [-] koa|12 years ago|reply
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|12 years ago|reply
https://medium.com/code-adventures/438bce155dcb
&&
https://flynn.io/
[+] [-] SiliconAlley|12 years ago|reply
[+] [-] Afforess|12 years ago|reply
[+] [-] voltagex_|12 years ago|reply
[+] [-] joeblau|12 years ago|reply
[+] [-] Einherji|12 years ago|reply
[+] [-] jbrooksuk|12 years ago|reply
[+] [-] jbarham|12 years ago|reply
[+] [-] ohashi|12 years ago|reply
Feel free to read the comments for yourselves: http://reviewsignal.com/webhosting/company/101/digitalocean
They are obviously doing something right and a huge congratulations for their fund raise.
[+] [-] dcc1|12 years ago|reply
Privacy violations would make liable under the local (a western european country) Data Protection act
no thanks
[+] [-] bluedino|12 years ago|reply
[+] [-] sjs382|12 years ago|reply
[+] [-] kevin1024|12 years ago|reply
[+] [-] hcarvalhoalves|12 years ago|reply
I hope they can add more features while staying price-competitive.
[+] [-] Kudos|12 years ago|reply