Cloud hosting startup Digital Ocean announced its first round of funding today – $3.2 million from IA Ventures, CrunchFund and TechStars. See TechCrunch, GigaOM and Pando Daily for coverage of the news (and see the comments on Hacker News).
The company is growing revenue and customers by 30% a month, and had 50x growth from December 2012 to May 2013. Thousands of customers have been grabbed from competitors like Amazon and Rackspace. When Netcraft called Digital Ocean’s growth “meteoric,” they weren’t kidding.
I first heard about Digital Ocean from Nik Cubrilovic. Nik urged me to take a look and try to invest in the company if we could. Digital Ocean has crushed the traditional price/feature tradeoff for hosting. From Nik:
I first heard about Digital Ocean almost a year ago and its name kept coming up every few weeks, which prompted me to finally take a look. It took me 30 seconds to signup, and I immediately realized what they had done – they broke the traditional price/features tradeoff and were somehow offering a great control panel, a great API and a great service with features usually reserved for high-end services at a low VPS price. They were outside of the traditional hosting tradeoff quadrant of price/features. I fired up one server to test them out and the benchmarks came back with numbers that were as good as what other IaaS providers were charging 3-5x the price for.
They have combined the low costs of low end commodity VPS providers with the features of high-end IaaS providers, it seems so obvious now but nobody has been able to pull it off until Digital Ocean.
I have cancelled two low-end VPS services and 30% of my AWS servers so far, with a view of also migrating PaaS hosted apps at Heroku and AppEngine (such as my own personal website) to Digital Ocean as well. The great recent news is that like AWS, Digital Ocean is now available as a provider in Vagrant:
Digital Ocean provider plugin:
https://github.com/smdahlen/vagrant-digitalocean
If you are a developer who deploys apps to servers and aren’t using Vagrant I strongly recommend you check it out. It sets up virtual servers for development that can then be pushed to the cloud. After initially setting up Vagrant and provisioning with either shell scripts, Ansible, Chef (solo or server) or Puppet (apply or agent) it is a single command to push your development environment up to a new Digital Ocean instance. You will need to scale it automatically and provide your own load balancing using either DDNS or nginx, but you get very close to building your own Heroku or AppEngine type stack with your own customizations, no lockin and at a fraction of the price.
This combination has changed the way I work and has made it easier for me to drop in and out of other projects with developers without spending time on servers configuring. I can’t recommend Digital Ocean enough to other developers, my tip would be to start small with non-critical apps to get a feel for the platform and then work from there – especially by using Vagrant or any other tools (even in-house continuous integration or deployment scripts using their very simple to understand and use API) to automate. Digital Ocean allows you to assemble cloud stacks like lego bricks rather than the completed tool Heroku or AppEngine give you, and you get service as good as more expensive options, for what they do, at low end VPS prices.
Just how much better is Digital Ocean than its competitors? For the lowest end hosting, we’re talking about 10x the performance for 1/3 the cost:
The 512MB server at Digital Ocean, which is the smallest size they have, is $5 per month or $0.007 per hour. Its UnixBench score is 1060.5 on average, IO is 279MB/sec and bandwidth 21MB/sec. Here are the details:
http://serverbear.com/1988-512mb-ssd–1-cpu-digitalocean
To get the equivelant performance on AWS from a single server, you have to step up all the way to an extra-large instance, which is $374 per month (!), compare the scores and graph here:
http://serverbear.com/240-extra-large-amazon-web-services
The cheapest AWS server is the Micro, which is $15 per month, its performance scores are approximately 10% of the cheapest digital ocean server:
http://serverbear.com/166-micro-amazon-web-services
some might complain that AWS isn’t suited to benchmarks, especially the Micro instance which is throttled, but the difference is just too large to ignore.
Digital Ocean was founded by Ben Uretsky, Mitch Wainer, Jeff Carr and Moisey Uretsky. We are extremely happy to be investing in the company – saving developers a ton of money on hosting while also giving them a product they adore is a surefire recipe for success.
Uncrunched 
I’ve been using Digital Ocean for about 4 months now to host a variety of low-bandwidth web apps. All of my colleagues who use AWS or Linode strongly encouraged me not to use “some crappy no-name vps.” All I can say at this point is I am VERY impressed with Digital Ocean, the ease of get an instance online and the tiers and options they offer make it a no-brainer for the small scale servers I run. Happy to see they had a successful first round of funding!
Awesome to hear Nick! Happy to have you as a customer!! 🙂
The big difference I see between them and my current provider (ServerAxis) is that I don’t see where they provide a web-based console terminal; is that correct? Not necessarily a deal-breaker but it’s nice to have that assurance in case I bork my firewall and lock out of ssh…
I did that this very morning on my droplet. Enacted changes to iptable on my CentOS instance, but forgot to leave the ssh port open. Oops. Back to the web console and reboot, lesson learnt 🙂
From their features page: https://www.digitalocean.com/features
“Web Console Access
If you ever get locked out of your virtual server, you’ll be able to recover it with full console access. HTML5 enabled so you can use it on any device. Bad kernel, wrong iptables rule – no problem.”
They provide one in the admin interface. A bit finicky but worked for me.
Nick: Wait till you have to deal with their Support. We are a 1 month old customer of DigitalOcean. They escalated one of our tickets to their Engineering. And there is no ETA. As if the ticket has gone into a blackhole. Very poor service from DigitalOcean. Any new potential customers….beware!
Thanks, good to know.
These are just VPSes with an additional API layer. A far cry from the features that AWS provides. That said, this is a great option for those who are looking for “just” a VPS and I’ll definitely look at moving a couple of mine there to give it a try…
We appreciate your honest feedback about us. With the new funding, adding more features is definitely where we will focus on as we aim to be the best cloud hosting provider for developers.
Don’t care about features. Use the money to keep it simple. The only reason I came to digital ocean and gave up on aws is because of Digital Ocean’s simplicity. I Great stuff and do use the money to setup a data center in India/Asia 🙂
Absolutely agree with Ravi. Keep it simple, effective, and more importantly… cost-effective. Big differentiator. Great service, btw.
Picked up on it here, set up a droplet to test, and about to get our dev lead onto it as well.
Everyone is talking about these guys recently.
Netcraft also report they had 1,500 sites from Rackspace and 600 from AWS move to them between mid May and mid June 2013. I’m not sure if the mass sign ups of Bitcoin users (that helped exhaust IP4 address availability for a few weeks in Amsterdam recently) contributed to those numbers, but impressive none the less.
My web presence is hosted there. Delighted so far.
Thanks Ian! 🙂
Hi Ian – The Bitcoin users did not play a role in the growth stats reported by Netcraft. You can track our real-time growth numbers by clicking on this link to Netcraft: http://trends.netcraft.com/www.digitalocean.com
According to Netcraft move stats, some 1,500 Rackspace and 600 AWS accounts moved over to Digital Ocean between mid May and mid June 2013. I know there was an issue with Bitcoin users taking capacity in Amsterdam with a special offer (leading to a temporary shortage of IP4 addresses outside their SF data center), but I don’t know if this was material to these stats or not.
Disclosure: I am using Digital Ocean for my web business – one droplet so far. Impressed to date.
But I don’t know if want everyone else to find out about it…
I am really excited about Digital Ocean, just hoping they get an Indian location soon so I can switch to them from HostGator India/Amazon.
Thanks for the feedback. We are certainly looking into an India location.
Appreciate your feedback. We are certainly looking into an India location.
so … the Amazon’s profits are 30 times higher … not bad
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Hey! Do you guys support users based in the UK or is your service purely US based for now?
Thanks!
They have a region in amsterdam so I assume UK is ok…
Aah OK. I’ll check it out.
DigitalOcean is simple and fast in different locations.
Im not sure.. AWS is killing me right now with costs, we have used Linode for several years and can trust them 100% but scaled back our linodes when the AWS Sydney datacenter come online. Our biggest reason for being with AWS right now is the Sydney datacentre, might start moving some stuff back over to Linode soon, dont need faster than Linode, support is much more important.
Digital Ocean just seems to be a place where people buy service from to perform illegal activity. Going through various logs, the address blocks from Digital Ocean are the #1 offender. If I add the 2nd, 3rd, 4th and 5th together, Digital Ocean is still higher. Just something to think about when are signing up for service and giving them personal information.
It’s not realistic that nefarious users will take advantage of the very low cost that Digital Ocean provides. That should not be a bad reflection on Digital Ocean at all.
Not “unrealistic”…
Please define “illegal activity”. Allegations without supporting evidence, data or methodology could make this look like a shill comment.
Fwiw, I host two sites there, and they are certainly not in the least dubious !
I personally received a infringement notice HBO sent to DO for an IP I just just got on a new droplet. I cleared it up quick but I read on a forum its easy for someone to serve files from a DO ip then just destroy the droplet and create another one with a new IP. Always check the IPs DO assigns you against blacklist lists.
https://play.google.com/store/apps/details?id=br.com.seosoft.digitaloceancontrolpanel&hl=en-US
The Digital Ocean Control Panel is an application that provides control their droplets (Virtual Private Server) DigitalOcean ™.
Features basic API DigitalOcean ™:
• Create Droplet
• Rename
• Snapshot backup
• Power ON
• Power OFF
• Forced OFF
• Restart
• Restart forced
• Destroy droplet
• Resize droplet (increase or decrease server capacity)
Extra functionality offered by DigitalOcean Control Panel:
• Check if the droplet is attached.
• Check if the IP droplet responds to ICMP PING.
• View notifications periodically if the droplet is turned off and or not responding to PING.
• Auto restart / power on if off and droplet or not responding to PING.
The DigitalOcean Control Panel is not an official App DigitalOcean ™.
I’ve just moved over to DigitalOcean from AWS and I’m very please with these guys, all I can say I highly recommend these guys to anybody from any part of the world, already tested their data centres and all good, I now have 8 website running on 4 different droplets and absolutely happy!
I’m from Persia/Iran and I’ve already referred more than 6~7 big websites with heavy traffic to use DO!
I personlly thing AWS is overkill cost-wise for what they offer! So why would you want to waste your money when you could switch to DO and use the same resource for much much lower costs… 😀
Big thanks to these guys 😀
Kind regards from Persia/Iran
Cheers
there are many charges with AWS… for a server with 3000 uniques it cost me more than 100 $ per month including I/O charges which cost more than instance itself..and it s damn slow… i moved to DO and 40$ no hidden charges. free dns.. perfect speeds
we been using Digital Ocean for last 2 years, now will be shutting down everything, they become unreliable, it it is unacceptable for company to stop instances from running for what ever reason, and then post the reasons. Few days downtime for serious traffic commercial website it is end of business, imagine you are going IPO and our company site goes down because some low level tech support decides that something wrong with your instance and its better to kill it and ask owner if everything ok with it and maybe we need to take a look at it. Not good, not professional, too damaging!
I experienced the same, Alex M. I was very disturbed when I found that droplets get restarted randomly. I’m also very unsatisfied by the way they treat (ignore) feedback received on their uservoice page.
I’ve been using DO for more than a year. 6 instances so far… Support is limited to a ticketing system. Though not always immediate, support has been much better than I expected. Rackspace support is better and you pay for it. But given the price difference, I would still rate DO very good. Server performance is excellent especially given the price. You can just oversize and feel safe. Only other desire is for more value added features. It would be nice to be able to separate disk space from ram and cpu. i.e. if I need big disk to store assets, I may not need big computing power to go with it. Other compute nodes – e.g. DB – do not need that much disk. I would also really like to have VLans or at least an easier way to communicate between nodes. I’ve got VPNs all over the place. I would prefer a firewall node and a private network… I still give them a 10!
DigitalOcean is a great service. Heres a link for a discount off your first VPS. http://goo.gl/4U1DX0
Very good this comparison , but I tried to see what is the most simple and easy service found a great service to the digital ocean , with fast SSD because they use and access the price ? you can test servers for $ 5 per month and only pay for what you use , be tested for 1 hr will pay cents , I have a good credit here for $ 10 if you want to test just register http://goo.gl/9vzOCJ
with $ 10 you get two months to do their tests and if you like just insert credits by paypal , or use your credit card you choose , so if you want $ 10 to use at no cost just register here : http://goo.gl/9vzOCJ
very nice….
I currently using DigitalOcean, but still the 10$ package
Discount coupon for all Digital Ocean plans getting 10$ free http://goo.gl/xYXfJI
[…] DigitalOcean 在性能和花费方面不断的超越EC2， […]
[…] For some useful benchmarks, experiences, and comparisons, try here, here, here, here, here, and here (in no particular order). However, keep in mind that platforms are constantly upgrading and […]
I know that this post is a bit old but ave you had a chance to check out Vultr? It’s pretty much a knockoff of DigitalOcean but with faster CPUs and a lower latency network. I put together a screen shot walk-through on my own blog. Here’s a link to it if you’re interested in checking it out. https://odinsql.com/2015/04/walk-through-review-vultr-vps-hosting/ I also did a direct comparison between DigitalOcean and Vultr in this post https://odinsql.com/2015/01/digitalocean-vs-vultr-vultr-vs-dgitalocean/
So much was said about DO , i signed up too out of curiosity But i am not impressed so far. 5$ is for one droplet / server. if you need to have multiple nodes you need to purchese them separately. The biggest draw back i feel is with the email server. They do not provide with any default smtp server, we need to install our own smtp server and manage it , which is a big headache. Wouldnt recommend
Thank you very much ! You have cleared out the difference between them.
Wow. That is so elegant and logical and clearly explained. Brilliantly goes through what could be a complex process and makes it obvious.