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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

#261

Post by kokey »

raiyu wrote: post #92
dcchambers wrote: post #87

I have some personal stuff hosted on DO. I really like their options, service, their branding, UX/UI, etc...but they are kind of in a weird spot. Halfway between being good for cheap personal projets, and being good for enterprise. If I want a simple VPS there are cheaper options. If I am an enterprise spending millions/year on cloud infra I am probably only looking at AWS, Azure, GCP, etc. How does DO get out of thi…

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…

I've always believed that as cloud stacks mature and get commoditised various VPS providers will provide a decent alternative to being locked into the AWS or Azure ecosystem. I think the main drivers for people actually migrating will be cost and flexibility, where flexibility will be provided by software stacks that will be deployed on top of simple compute instances.

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

#262

Post by formercoder »

Rastonbury wrote: post #245
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,…

The thing is that depreciation is not a cash expense, companies will push the depreciation to the highest reasonable amount to reduce the amount of tax on their profits. A commonly used valuation technique (discounted cash flow or DCF) relies on projected free cash flows and adjusting for expected CAPEX.

Also there’s GAAP depreciation and tax depreciation, and firms will try and use different depreciation schedules between the two in order to create deferred tax liabilities which boost cash flow early on.

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

#263

Post by codingdave »

cdolan wrote: post #84
cortesoft wrote: post #59

Earlier quoted context omitted.

>Then call the CEO out, Alex Wilhelm (author), if you think its BS! Isn't that what the parenthetical is doing? Maybe subtly, but it seems pretty clear what the author is trying to convey.

I see what you are saying but I dont agree - the author is knowledgeable in financial terms and business, but is still parroting the CEO. I suppose I’m just triggered on what feels like years of news-pieces being marketing pieces for established companies. I would think if the author is well versed in financial speak, they would challenge (or omit) the positive spin the CEO is trying to push here?

Journalists tend to report on what they see, not editorialize. So no, they don't call people out... they just report the words that are said and rely on the reader to put in the critical thought, often giving them a lead in doing so with parentheticals like the one in this article. That is also why completely asinine quotes get shared frequently... not because the quote is good, but because it is not, and they want to give it to their readers at face value and let the readers draw their own conclusions.

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

#264

Post by [deleted] »

kaetemi wrote: post #186
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,…

Imagine you're a growing startup, and you have a yearly recurring investment (you're growing, after all!) of $1000 that's linearly depreciated over 5 years. Let's say your income is 1100$ each year. Your profit, according to accounting, would be 900$ for the first year, counting only $200 of the investment, then for the following years you'll see a profit of $700, $500, $300, and $100, as the investments accumulate.…

[deleted]

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

#265

Post by multani »

dkersten wrote: post #248
Legogris wrote: post #244

Earlier quoted context omitted.

Their documented "minimum requirements" are quite ridiculous TBH. I mean, officially Vault requires 6 Consul servers (dedicated to Vault, mind you) to be considered ready for production. I doubt most companies using Vault with Consul follows this. You I think you could be fine with 3 of the smallest machine types.

That’s basically what put me off trying nomad. Nit just the minimum number, but also their stated hardware requirements. From their documentation: Nomad servers may need to be run on large machine instances. We suggest having between 4-8+ cores, 16-32 GB+ of memory, 40-80 GB+ of fast disk and significant network bandwidth Basically the cost if the Nomad masters would be much greater than the cost of what would run my…

It really depends on how what your workload is though.

We have been running between 100 and 200 Jobs in Nomad, with the quantity of clients doubling then shrinking every day using 3 × t3.micro for the servers since years.

We have yet to see our Nomad usage increase enough to get rid of these machines.

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

#266

Post by MiroF »

cdolan wrote: post #84
cortesoft wrote: post #59

Earlier quoted context omitted.

>Then call the CEO out, Alex Wilhelm (author), if you think its BS! Isn't that what the parenthetical is doing? Maybe subtly, but it seems pretty clear what the author is trying to convey.

I see what you are saying but I dont agree - the author is knowledgeable in financial terms and business, but is still parroting the CEO. I suppose I’m just triggered on what feels like years of news-pieces being marketing pieces for established companies. I would think if the author is well versed in financial speak, they would challenge (or omit) the positive spin the CEO is trying to push here?

Strong disagree - the only reason you know that he's not just talking about profitability is because the author pushed the CEO.

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

#267

Post by MiroF »

larosalia wrote: post #105
cdolan wrote: post #84

Earlier quoted context omitted.

I see what you are saying but I dont agree - the author is knowledgeable in financial terms and business, but is still parroting the CEO. I suppose I’m just triggered on what feels like years of news-pieces being marketing pieces for established companies. I would think if the author is well versed in financial speak, they would challenge (or omit) the positive spin the CEO is trying to push here?

The positive spin was removed, and that's also why everyone reading can pick it up so fast. If it wasn't so well written, another author would had just said that DO has plans to be profitable. When the CEO said "profitability" to the reporter, he challenged it by putting as "loosely". The reporters is informing us, but also making it a point that the CEO alleges something that is not consensus can be considered profi…

Thank you!

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

#268

Post by steve_adams_86 »

luord wrote: post #254

I was reminded about the "debt is coming" post that was shared a couple of weeks back. This is a good example of that, I think.

It seems from what I've read here that digitalocean has always carried relatively higher debt than other, similar companies. It might not be a good example.

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

#269

Post by flak48 »

scarface74 wrote: post #170
gruglife wrote: post #24

Earlier quoted context omitted.

Regarding point #2, many in the finance world (which I work in) consider cash flow positive a better representation of actual profitability than the actual net profit/loss reported on the P&L. In short, cash flow shows if the actual core business is bringing in money or losing money, while the net profit includes a lot of "noise" (probably not the best word to use but can't think of how to phrase this). For example,…

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,…

I know about WeWorks deceptive accounting/reporting practices, but not sure what similar thing Uber has done when it comes to accounting?

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

#270

Post by jdance »

serverQuestion wrote: post #251
hnzix wrote: post #162

Earlier quoted context omitted.

AWS is infrastructure as a service (IaaS). You need to worry about load balancers, backup scripts, firewalls etc. Ie you need a plausible sysadmin to run it. Even Elastic Beanstalk requires some sysadmin. Heroku is platform as a service (PaaS). It abstracts away the complexity of AWS. The base cost is more expensive than raw AWS but you don't need to source and pay for a sysadmin. AWS, Heroku and DO aren't "better" t…

I have been dreaming of running my own heroku like interface on a DO droplet. Just for small sites, side projects and such. With heroku you need to pay to keep things running, though sadly with DO you need to do a lot of sysadmin work to keep things running.

After failing with Heroku we migrated to using Dokku on DO. And yes it is more work to do it ourselves, I didn't want to do that but here we are :) It was not a lot of work, dokku is really nice, but it was/is some work. I was hoping for almost no sysadmin work but that didn't happen.
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