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DigitalOcean is laying off staff

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Re: DigitalOcean is laying off staff

#181

Post by raiyu »

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.

Re: DigitalOcean is laying off staff

#182

Post by awinter-py »

arcticfox wrote: post #125
op00to wrote: post #103

Earlier quoted context omitted.

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.

I'm still amazed that there's no billing cap in Amzn/Goog. Google tried to charge me $1000 for a service normally costing $1 / mo because of a runaway restart issue. I had a $2 / mo "max budget" on it and we responded within minutes of receiving a budget alert. I only got them to reverse the charge after doing a ton of work to prove that my team reacted in their budget alert that was more than 6 hours late. They stil…

not blackmail I suspect -- you're asking them to stick by their contractual responsibilities / make up for their own failure to notify you in an edge case

on the face of it, them exceeding their max budget probably puts them in the wrong if this went to third-party arbitration

Re: DigitalOcean is laying off staff

#184

Post by whatsmyusername »

Townley wrote: post #55

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 competi…

> let me configure LDAP

I just got a nervous tick. Having done it before IAM is the killer feature of AWS.

Re: DigitalOcean is laying off staff

#185

Post by sillysaurusx »

biztos wrote: post #96
Meekro wrote: post #54

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 b…

I've had a "droplet" going at $7/mo for about half a year and probably used it less than ten hours so far, and not doing anything too heavy when I use it. Every time I think about turning it off I say "yeah but it's only $7 and I like to ssh into it sometimes." I've had a "shared hosting" setup on Dreamhost for at least 15 years, also using pennies per month in capacity, at most. I get that it can be a brutal, low-ma…

I’ll never forgive DigitalOcean for deleting my portfolio site after 5 weeks of nonpayment.

5 weeks. Deleted everything.

Yes, I screwed up. But I would have happily paid them. They deleted the backups too.

When we inquired as to whether the backups could be restored now that we’ve paid them, they said it was impossible.

Blame me if you want and say it’s my fault. It certainly is; I admit that. But why was I paying them for backups that they wiped along with my server?

Meh.

(The card expired.)

Re: DigitalOcean is laying off staff

#186

Post by cloverich »

amerine wrote: post #158
wgerard wrote: post #2

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.

Help me understand that “graduate” off sentiment towards Heroku? (Full disclosure: I work on Heroku for Salesforce).

(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.

Re: DigitalOcean is laying off staff

#187

Post by pascalxus »

JDiculous wrote: post #178
Meekro wrote: post #54

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 b…

How is AWS so profitable then?

It's a very good question. I would imagine more economies of scale? but, I would have thought that DO has enough economies of scale to reap all the benefits. but, I'm not sure.

My impression is that DO is doing just fine. I get the sense that the layoffs are just to add to the profitability, not necessarily a sign of weakness. The article did mention that they were still growing revenues very aggressively.

Re: DigitalOcean is laying off staff

#188

Post by treebornfrog »

donarb wrote: post #119
Townley wrote: post #55

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 competi…

AWS has their own competitive service against DigitalOcean called Lightsail. Their cheapest plan is $3.50 month (512MB/20GB SSD), the bigger plans are roughly similar in pricing and features to DigitalOcean.

The irony of this article is that current customers like myself who read this news are now looking at alternatives.

I spend roughly $120/m with DO and have done for the last 2 years. I have a majority 5 usd droplets and 1 20 usd droplet.

LightSail may be the way to go for now.

Here comes all the migration work.. Fun :)

Re: DigitalOcean is laying off staff

#189

Post by mywittyname »

ForHackernews wrote: post #154
lozaning wrote: post #133

Earlier quoted context omitted.

One of the interesting metrics from my time working in global escalations for one of the worlds largest electronics manufacturers is that most customers don't call in for support, but on average we get 3.5 calls per user per account lifetime. The 80/20 rule in in full effect here. The 'needy' customers are extremely resource intensive.

Unless you're a business that differentiates itself with good customer support, you can just fire expensive customers.

This is probably what I would do. Keep around the high margin customers like the OP, but do something with the Complainy Pants Inc; either force-migrate them to a higher cost service tier, throttle them until they leave, or maybe just slow down their service.

The key to remaining competitive in cut-throat industries is knowing where to spend your limited time and money.

Re: DigitalOcean is laying off staff

#190

Post by kbar13 »

sillysaurusx wrote: post #185
biztos wrote: post #96

Earlier quoted context omitted.

I've had a "droplet" going at $7/mo for about half a year and probably used it less than ten hours so far, and not doing anything too heavy when I use it. Every time I think about turning it off I say "yeah but it's only $7 and I like to ssh into it sometimes." I've had a "shared hosting" setup on Dreamhost for at least 15 years, also using pennies per month in capacity, at most. I get that it can be a brutal, low-ma…

I’ll never forgive DigitalOcean for deleting my portfolio site after 5 weeks of nonpayment. 5 weeks. Deleted everything. Yes, I screwed up. But I would have happily paid them. They deleted the backups too. When we inquired as to whether the backups could be restored now that we’ve paid them, they said it was impossible. Blame me if you want and say it’s my fault. It certainly is; I admit that. But why was I paying th…

"i was able to pay rent but i forgot and got evicted and it's the landlord's fault!!!!!111"
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