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DigitalOcean S-1

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Re: DigitalOcean S-1

#211

Post by vinay_ys »

simonebrunozzi wrote: post #203

Should I disclose this? Well, why not? I interviewed at DO a few years ago. I don't want to share the details, but it was the most annoying, unprofessional and disorganized set of interviews that I have ever witnessed in my life (I did ~140-150 interviews in my life for ~25 companies). The best part is that I was introduced to the company by one of their board members. Since then I kept thinking that I really liked t…

Was it just that they didn't have the usual setup of recruiters, coordinators etc to manage the hiring loop well?

If they are less than 300 people company grown over a very slow pace, that's understandable.

Re: DigitalOcean S-1

#212

Post by roland35 »

libria wrote: post #190
emgo wrote: post #165

The biggest threat to DigitalOcean is that AWS, Google, and Microsoft are all going vertical by designing and manufacturing their own chips. Over times they'll be able to get hardware for cheaper, and also more specialized hardware that uses less power. DigitalOcean will have to buy CPUs from Intel or Nvidia/ARM at a higher cost, and eventually maybe even from AWS or Microsoft, essentially giving money to their compe…

> AWS, Google, and Microsoft are all going vertical by designing and manufacturing their own chips What are the GCP and Azure equivalents of AWS Nitro?

Here is an article about Azure at least: https://www.theverge.com/2020/12/18/22189450/microsoft-arm-p...

“Because silicon is a foundational building block for technology, we’re continuing to invest in our own capabilities in areas like design, manufacturing and tools, while also fostering and strengthening partnerships with a wide range of chip providers,” says Microsoft’s communications chief Frank Shaw.

Re: DigitalOcean S-1

#213

Post by sevencolors »

cat199 wrote: post #52
sithlord wrote: post #18

Earlier quoted context omitted.

Be a giant investor, ie a bank. IPOs are there for banks to be able to buy up shares at a low price, then dump it when retail investors get their turn to run it up before banks sell off.

another option is that one can also choose to be rich to gain access to more wealth: https://www.investor.gov/introduction-investing/general-reso... 200k/yr for 2 yrs, or >1M net worth % price(house).

So not for us "poors" making less than that. They really hate retail investors

insert angry punk sentiment here

Re: DigitalOcean S-1

#214

Post by sneak »

tgtweak wrote: post #136
neom wrote: post #32

Interestingly it was very clear at around $10MM ARR that DO was on a trajectory to IPO. You can thank Moisey Uretsky for a fantastic product idea and his brother Ben for CEOing it for so long. Congratulations to everyone who was involved in building DigitalOcean, it was an INCREDIBLY wild ride in the early days, lots of chaos but through all the chaos and disfunction, I think everyone involved knew this day would com…

I'm really happy to see Ben and Moisey get this far. They are both extremely competent sysadmins and system architects too. They retained a lot of equity as well - good to see.

My experience is that not only did they start out as incompetent, they actively downplayed early security issues and outright lied about certain aspects of their products.

I found major, glaring security/architecture issues with their main product early on, and was told by DO staff to go full-disclosure because it was working as designed. When I did so, DO lied about the impact on their blog.

Those lies are still up:

https://www.digitalocean.com/blog/transparency-regarding-dat...

> At no time was customer data "leaked" between accounts.

(I have screenshots of other DO customers' data.)

https://news.ycombinator.com/item?id=6983097

Even their outage blog post from a few months ago is now deleted.

My experience is that DO is a shady company, and I'll not do any serious/critical business with them or ever use them to store secret information.

As for the lying, I'd personally never do business with any of the early DO management/founders.

There's no amount of money that can be used to buy a reputation for integrity.

Re: DigitalOcean S-1

#215

Post by shiftpgdn »

jiofih wrote: post #93
yte14 wrote: post #75

Earlier quoted context omitted.

I remember Linode being hesitant to dip below $20 because the thinking was that it would diminish the quality of support. That thinking was reinforced when you started with $10 (if I recall, it’s been nearly a decade) and we started getting large numbers of refugees burned by experiences with your support organization. Neighboring comments tell me it’s still a problem. We consciously didn’t want to grow $5 fast becau…

> it was a product that looked remarkably similar to ours As a developer, DO never looked anything like it. Linode was expensive and on the same playfield as Rackspace and a ton of other cloud hosts, very different from the instantly-spin-up-a-tiny-vm-for-five-bucks model. Their web UI also has always been miles ahead. The competition also didn’t have SSD as an option until much later, and that was a HUGE selling poi…

Lol, what? DO was basically a page for page copy of linode's site and product offering in 2011-2013.

Re: DigitalOcean S-1

#216

Post by johnthedebs »

pid_0 wrote: post #207

I just cannot fathom why people would use a tier 2 cloud provider over AWS or GCP. It can't possibly be significantly cheaper. The tooling is non-existent. There is little third party tutorials/documentation compared to tier 1. Why would anyone buy this?

Because (comparing DO to AWS) it is much cheaper for many use cases, there is good tooling and documentation, and the user experience is dramatically better. I'm curious - on what did you base your assumptions?

Re: DigitalOcean S-1

#217

Post by maximus024 »

jamroom wrote: post #200
maximus024 wrote: post #182

Earlier quoted context omitted.

> If you're going to spend $5 on a server why would you go with DO unless you're already there? I would go with anyone other than Linode, considering they left the control plane running a publicly accessible unpatched version of ColdFusion, which led to multiple instances of them losing control of customer's data. Anyone but Linode.

Yeah I know about that incident - but also believe companies have the ability to learn from past mistakes and do better.

Unfortunately it wasn't a single incident.. fool me once..

Re: DigitalOcean S-1

#218

Post by bklyn11201 »

gizmo wrote: post #9

Excellent growth, fair margins. Probably worth about $3bn. If it IPOs at less than $5bn it's probably worth picking up. Long term digitalocean will struggle to maintain its margins when competing with Azure and AWS on one side, and Cloudflare edge computing on the other side, so I don't think it can command the same kind of premium we've seen from other tech IPOs. A big red flag is that 570,000 customers bring in onl…

A newsletter about SAAS called CloudedJudgement sent this in January:

> SaaS businesses are valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue. In the buckets below I consider high growth >30% projected NTM growth, mid growth 15%-30% and low growth So if DO is mid growth, you could use 17x as the EV / NTM multiple. So if 2021 revenue will be 320mm + 25% = 397mm NTM * 17x = 6749mm EV.

Total debt is 263mm so best (rough) guess at equity market cap is 6749mm - 263mm debt + 100mm cash

Re: DigitalOcean S-1

#219

Post by quacker »

azinman2 wrote: post #194

Anyone else find it interesting that their revenue graph only starts in 2017? At what I’d assume to be a pretty low number given how long they’ve been around and how explosive the VM world has grown? Seems like if they hadn’t taken all that VC capital there’s no way they could have afforded any of their growth. It worried me that they’re only at a couple hundred MM in a self-proclaimed 116B+ opportunity after 10 year…

It worried me that they’re only at a couple hundred MM in a self-proclaimed 116B+ opportunity after 10 years.

Yes. How do they grow further? DO will be compared to AWS and Azure in the market, and there's a good chance their stock will be punished as a result. Plus, if DO actually makes in-roads in market share, AWS is a beast that, if it wants, can crush them on pricing and features for long enough to kill them.

Re: DigitalOcean S-1

#220

Post by vinger »

jamroom wrote: post #141
stanmancan wrote: post #131

Earlier quoted context omitted.

I was a huge Linode fan for years. I used them exclusively. DO showed up and slowly but surely started being the better deal. Lower entry points, better specs, and then finally a more robust product line. I slowly found myself going to DO for new servers and eventually moved everything there for simplicities sake. Linode still has a special place in my heart, but they have some work to do if they want to remain compe…

Wow - really? I use both Linode and DO extensively and Linode is better on almost all fronts in my experience. Faster servers, better network, Linode's Object Storage is way better than DO's "spaces" and Linode's support is hands down the better of the two. If you're going to spend $5 on a server why would you go with DO unless you're already there?

Last time I provision on linode and do at the same time a created a ubuntu box. I found I had to setup a few additional things in linode. Linode never felt as polished which is fine.

The one thing that made do better was they had a datacenter in my region.

No one mentioned vultr killer $2.50 which is where I would go if I wanted a dev box to play around on.

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