The Meteoric Rise of DigitalOcean • Hacker News Board

Re: The Meteoric Rise of DigitalOcean

#11

Post by crazygringo » Thu, Mar 13, 2014, 6:02 PM UTC

To people wondering if this is a temporary thing, or what Digital Ocean's competitive advantage is (since someone else can come along with the same price point):

It's that the web interface, and process for starting a "droplet", is dead-simple and super-elegant, their support docs are comprehensive and easy to use, and they even do things like let you manage your own DNS records. And it all just works.

Digital Ocean is 100x easier and quicker to use than AWS, without exaggeration. It's easy to start a hosting provider -- it's really hard to make one that is also really high quality, intuitive and easy to use, and then cheap on top of it.

I've used Digital Ocean for a couple of years for small personal things, I'm actually currently in the process of moving a bigger site from AWS to Digital Ocean, at this point it's turning into a no-brainer.

Re: The Meteoric Rise of DigitalOcean

#12

Post by smacktoward » Thu, Mar 13, 2014, 6:03 PM UTC

ap22213 wrote: post #5

Until Digital Ocean came around, I'd always thought it bizzare that there weren't more serious competitors to AWS. Under the 'competitive advantage' model, it is somewhat unusual that a diversified company like Amazon could be the most efficient vendor at providing a 'commodified', targeted offering like cloud hosting.

I dunno... it seems like the likely winner in a commoditized market would be the one with the greatest economies of scale, since that would drive down their costs and allow them to underprice their competitors. (If a product is truly commoditized, then price is the only thing vendors have to compete on.) And few companies have economies of scale to the degree that Amazon does.

This also provides a classic "moat" -- the more sophisticated AWS' offerings become, the more it would cost potential competitors to even attempt to compete with them.

Re: The Meteoric Rise of DigitalOcean

#13

Post by andrewflnr » Thu, Mar 13, 2014, 6:04 PM UTC

Serious question: is it really worth it for a company like DO to support Windows? It seems like they maintain their edge by avoiding the kind of complexity that Windows would entail.

Re: The Meteoric Rise of DigitalOcean

#14

Post by mberning » Thu, Mar 13, 2014, 6:05 PM UTC

I tried them out a few months ago looking to move my infrastructure from AWS to DO. I was experiencing terrible IO performance on a fairly expensive instance. Submitted a support ticket about it. Their response was 'this is normal'. Killed all my droplets and canceled my account the next day.

To me they are running a pretty transparent pump and dump scheme. Promise a great service, sell it at a loss, get a ton of users, do a shit job of supporting it, take on investment money, cash out early, profit.

Re: The Meteoric Rise of DigitalOcean

#15

Post by jcampbell1 » Thu, Mar 13, 2014, 6:06 PM UTC

gabemart wrote: post #3

I'd be very interested to know if DO make a positive margin on their $5 droplets. I feel like I push a fair amount of data through mine, and plan to push more in the future using a bunch of $5 droplets and round-robin DNS. I'd feel better if I knew I was still a +EV customer.

The hardware cost is the same. 128 * $5 == $640, they charge a fixed $10/GB RAM.

They do have higher support costs, credit card transaction fees, and ip address costs. They would probably lose money if the primary users of the $5/month plans were doing punishing things like video encoding, but my guess is the vast majority are no load users.

I once read someone that was doing hosting, said the larger plans were actually more challenging. 4 high volume forum sites on the same host would cause IO contention. Digital Ocean has SSDs and they mix and match sizes on the physical host, so it should be less of a problem for them.

Re: The Meteoric Rise of DigitalOcean

#16

Post by showerst » Thu, Mar 13, 2014, 6:08 PM UTC

jjoe wrote: post #8

I feel like DO has no competitive advantage. They sell servers but then anyone with a reasonable infrastructure and programmers on payroll can scale the way they have. So while it's an impressive rise, it can't be taken for granted. Because all could falter over night. That's just the nature of the business and industry.

There are 4 avenues I think you can take in this market -

1) Price

2) Scalability/API (As in AWS style of instant spinup/spindown)

3) User experience for the dashboard and creation process

4) Configurability of your instances

DO is currently fighting on 1 and 3 with a dash of two, which I think is very smart. They're not fighting with lowendbox providers for the lowest possible price, but they're competing with linode and AWS for relatively low cost, but with good stability and ease of use. You can't spin up/down quite as easily as amazon, but they're not targeting that exact use case anyway.

I've moved a few things over to DO from linode and will continue to, because although performance is a bit less, the price points are far cheaper. I think there are a lot of people who use Linode/AWS for boxes that just hum along doing some simple server task(s) that would gladly move to DO for 1/4 of the price, as long as the stability/customer service is there.

I read a rumor on a previous post that they were working on a way to customize an instances storage & RAM but at the current low price points, which I think would be huge.

Re: The Meteoric Rise of DigitalOcean

#17

Post by loumf » Thu, Mar 13, 2014, 6:11 PM UTC

andrewflnr wrote: post #13

Serious question: is it really worth it for a company like DO to support Windows? It seems like they maintain their edge by avoiding the kind of complexity that Windows would entail.

It's a significant market, not just in size, but in willingness to spend money.

I didn't find Windows complex -- One nice thing about the MS world is the homogeneity of the stack, which makes a lot of things easier if it works for you. If you want to run something else, you probably don't want to run it on Windows anyway.

Re: The Meteoric Rise of DigitalOcean

#18

Post by reqres » Thu, Mar 13, 2014, 6:13 PM UTC

mberning wrote: post #14

I tried them out a few months ago looking to move my infrastructure from AWS to DO. I was experiencing terrible IO performance on a fairly expensive instance. Submitted a support ticket about it. Their response was 'this is normal'. Killed all my droplets and canceled my account the next day. To me they are running a pretty transparent pump and dump scheme. Promise a great service, sell it at a loss, get a ton of use…

Out of curiosity, which plan were you using? The basic $5 VPS?

Re: The Meteoric Rise of DigitalOcean

#19

Post by mberning » Thu, Mar 13, 2014, 6:15 PM UTC

reqres wrote: post #18

mberning wrote: post #14

I tried them out a few months ago looking to move my infrastructure from AWS to DO. I was experiencing terrible IO performance on a fairly expensive instance. Submitted a support ticket about it. Their response was 'this is normal'. Killed all my droplets and canceled my account the next day. To me they are running a pretty transparent pump and dump scheme. Promise a great service, sell it at a loss, get a ton of use…

Out of curiosity, which plan were you using? The basic $5 VPS?

HA! I was using their $160/mo option with 16gb of RAM.

Re: The Meteoric Rise of DigitalOcean

#20

Post by maxmcd » Thu, Mar 13, 2014, 6:15 PM UTC

crazygringo wrote: post #11

To people wondering if this is a temporary thing, or what Digital Ocean's competitive advantage is (since someone else can come along with the same price point): It's that the web interface, and process for starting a "droplet", is dead-simple and super-elegant, their support docs are comprehensive and easy to use, and they even do things like let you manage your own DNS records. And it all just works. Digital Ocean…

To add to this:

I find Digital Ocean's community/blog content impressive. In most instances I can google "Install X on Digital Ocean" and they have a solid, well updated walkthrough.