What Happened to Digital Ocean?

>Not too long ago DO was touted as the #2 cloud behind Amazon [1]

Is there a time of where that was said in the podcast. I could bet money at no point in time was DO no.2 in Hosting or Cloud Hosting in revenue, profits or customers. They might have been the case if you count instances / droplet or Domain name, but both of these are quite irrelevant.

They have growing pains, as with ALL companies does, and they reach a point where growth has slow down due to market interest and competition. Not only has Linode becomes better and more competitive thanks to DO, there are also new comers into what I considered as Middle Class Cloud Hosting such as UpCloud and Vultr. You also have Giants ( in their own right ) such as OVH and Hetzner.

>Its not like the market for their stuff is that small, Azure and even GCP have proved that.

No one gets fired for buying IBM. That mentality is the same for Intel ( vs AMD ), using SalesForce rather than other CRM or ERP, and across All industries, from toilet paper roll, food, water, cleaning solution etc. Big Enterprise wants to works with other Big Enterprise. If you have ever sit in the chair of the purchasing, or Supply Chain director you will understand the risk of working with smaller companies is far too great. DO aims at people who are willing to take that risk, SME or startups. And that market is fundamentally different to Azure and GCP serves.

So your answer aren't really technical, but more on the economical and business side of things.

Maybe the cloud has bifurcated and DO is #1 within the "light cloud" market which is a lot smaller than the "real cloud" market.

This is an interesting one for me. I run a small network of sites, around 130 or so (Wordpress) that used to be hosted on DO. We had CDN and heavy caching implemented, as well as fail2ban and other security features. For some reason, every site would go down at some point monthly: error connecting to database, Apache crashed, etc... couldn’t get any support on it.

We switched to WP-engine and haven’t had a single issue. We now host our web apps with Azure without issue as well. We spend maybe $5-$7k / month on hosting (which is a drop in the bucket for larger companies), but I can’t imagine we are the only ones who encountered this.

Among the lesser clouds, I think Linode is better than DO if you just want a reasonably priced vps. I ran dev and CI workloads there while running the prod stuff on AWS and was always happy with them.

We stopped using it when we were always the first to notify them when they were having data center issues...always a switch or gateway or some other excuse causing major network issues.

Not to mention their security model allowed any instance to talk to another instance from any account until 2019....

personal anecdote : I quit DO for Linode after a string of fairly hostile customer service interactions.

After having switched, I realized that Linode provided a better value for what I needed.

As with most poor customer service interactions, I doubt I was the only person who experienced such things from them.

> How do you go from one of the most hyped IaaS companies to suddenly losing steam? If it worked for them from 10m - 100m ARR, how do they lose steam from 200-275m? Its not like the market for their stuff is that small, Azure and even GCP have proved that. I'd love for some perspectives from people who know this market, because it's baffling to me.

DO's market (raw compute and occasionally unreliable object storage) and that for Azure, GCP, and AWS (top tier cloud ecosystems) are entirely distinct. The former competes on price and is a commodity, the latter are premium offerings that large companies happily write checks for.

At one point I was using DO for everything but then I got to the point where spending time on server config just wasn't productive so I moved everything over to AWS Elastic Beanstalk and RDS and never looked back.

I know DO do now have dedicated DBS products but really feel they're missing a trick with nothing similar to Elastic Beanstalk or GCP App engine - this is exactly the kind of products smaller dev teams and one-person operations need, and these are most likely the kind of people who would be willing to give DO a go over AWS and its perceived complexity.

I'm curious about the following two aspects: 1) were changes in DigitalOcean's executive management (in particular, their CEO replacement) prompted by founders' desire to change their focus / reduce their workload / whatever or pushed by some of DO's investors; 2) why DigitalOcean is an LLC (to the best of my knowledge, an absolute majority of VCs insist on their potential portfolio companies being a C Corporation (mostly, a Delaware C-Corp). Thoughts?

There's also the "Digital Ocean Killed Our Company" event last year https://news.ycombinator.com/item?id=20064169 that seems to be fresh in people's minds, but honestly that seems like a bad luck one off rather than something endemic in DO.

Sorry, DO was never considered in the same class as "true" cloud providers like AWS, GCP, or Azure. DO is primarily a VPS provider with some other services. It is in the same class as Linode and perhaps Vultr.

Abuse. I see so many bad interactions from their network that I have blocked them entirely.

Bots attempting credit card fraud are common.