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DigitalOcean raises $100M in debt as it scales toward revenue of $300M

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Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#191

Post by apple4ever »

cj wrote: post #168
raiyu wrote: post #141

Earlier quoted context omitted.

"Business folks" :) But all kidding aside, the numbers just don't make sense. AWS is doing $30B in revenue and has tens of thousands of engineers. Google which many can argue has some of the best engineering on the planet is going after AWS investing billions in datacenters and again using thousands of engineers. So to think that DigitalOcean with a $300MM debt line and 250+ people in engineering is going to go after…

I don’t necessarily disagree with you, not sure I’d place a bet on DO taking on AWS realistically, but: > So to think that DigitalOcean with a $300MM debt line and 250+ people in engineering is going to go after AWS just doesn't add up. Lots of Money + Lots of People =/= Guaranteed Success It’s more a matter of taking on the market from a slightly different angle. One viable path I see is for DO to ramp up their ente…

> One viable path I see is for DO to ramp up their enterprise appeal by offering services on par with AWS, while cutting down the operational complexity of managing AWS services (using AWS = incredibly high overhead with configuration and everything else).

Absolutely. Getting into AWS, etc can be overwhelming. Getting into DO is incredibly easy.

Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#192

Post by scarface74 »

dannyw wrote: post #181
scarface74 wrote: post #170

Earlier quoted context omitted.

Not counting depreciation as part of your loss in a business is about like all of the Uber drivers who don’t take into account the wear and tear on their cars when calculating how much money they are making. Depreciation is a real expense. If you depreciate an asset down from $1000 to $0 in 3 years, you’re accounting for the fact that in three years you are going to have to replace it. There is a reason we have GAAP,…

On a cashflow basis, you incur 100% of the depreciation at the moment you pay for it.

But wouldn’t your profit be awesome the years you didn’t have to claim depreciation?

Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#193

Post by raiyu »

sdesol wrote: post #161
raiyu wrote: post #92

Earlier quoted context omitted.

You hit the nail on the head, we are best for SMBs and teams that want to get things done quickly and don't need the hyperscale and added complexity of AWS. Our focus has always been on simplicity and as our customer needs and our own internal needs have grown we've added additional products to continue to allow customers to scale with us. We launched with just Droplets in 2012 and have since added block storage, Spa…

On a somewhat related note, what is the best way for startups to work with DO to get free cloud computing? My product is a search and analytics engine for github and I would like to offer a free version for people to use and I would like them to use DO since I find it has the best bang for the buck. I can see people that would like to use my solution to not need the bells and whistles of aws, azure, etc. Does DO prov…

Check out our Hatch program - that's probably what you are looking for:

https://www.digitalocean.com/hatch/

Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#194

Post by raiyu »

apple4ever wrote: post #190
muse900 wrote: post #176

Earlier quoted context omitted.

> Lots of Money + Lots of People =/= Guaranteed Success I'll agree on that. I won't agree with the rest though, I don't think DO can compete in an enterprise level. Actually in the longrun I don't see DO ever being viable. AWS and google are going to become simpler as the time passes and they are going to take over that margin that is left on services like DO, ovh etc. I think the only viable business plan for them r…

> AWS and google are going to become simpler as the time passes Really? I see them becoming more complex as they add more services.

I agree I don't see AWS and Google becoming simpler, but instead becoming more complex. They are also catering to workloads that are completely different and they really need to have every single possible knob and dial and configuration possible to satisfy these enterprise customers.

Doing what they do is complex and takes a certain skill set, but also doing simplicity right is it's own skill set.

I would say that I would be more worried in the past when AWS was more of a single player, but now that Google and Azure are firmly in the picture, AWS has some real competition in their core market which takes their focus away from us which is great.

Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#199

Post by termau »

chrysoprace wrote: post #134
GekkePrutser wrote: post #63

I used them for my private VPSes but they became too big and business-like. I moved to Scaleway now, it's still in a much earlier stage, cheaper and with unlimited bandwidth. I like the way you can still talk directly to their guys on slack to ask questions. However they're becoming big too. I hope they'll still love us and I don't have to move again soon :)

What's your experience with the service? I'm with Linode at the moment, primarily because DO doesn't have an Aussie region. Seems like Scaleway is much better value for money; however reviews on Reddit don't seem favourable.

Try binarylane if you're in aus

Re: DigitalOcean raises $100M in debt as it scales toward revenue of $300M

#200

Post by termau »

raiyu wrote: post #128
toomuchtodo wrote: post #115

Earlier quoted context omitted.

Appreciate the reply Moisey. I don't disagree that debt is a normal way to fund a business; arguably, it is the best way to fund a business once the business has been derisked. As you mention, you're not suffering dilution to get access to the capital, and as long as you're able to generate a multiple of value using that debt, you should take it on. My comment communicates pessimism about the value that debt will be…

Well the debt really acts like a line of credit, in that we are using it for hardware which is then immediately put into service and generating revenue, so the available debt and the drawn down debt are different terms and really there is no need to draw additional down additional debt if the company stopped growing tomorrow. That aside on the equity side we only raised $123MM. Assuming that the acquiring entity sees…

Question do you lease or buy your servers? It isn't quite clear which you do. Can see in evaluations that a lot of the kit is getting a little bit long in the tooth which I read as your not buying as you're growing but a lease model is the only way I personally see you running up enough costs to warrant the line of credit
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