With a range of rationales, digital transformations are carried out. Some stem from the need to replace IT systems that have reached the end of their useful lives; others are reluctant to invest in a refreshment. The often complex IT infrastructures of these companies can’t keep up with the pace of service demands. This leads to lackluster service levels for clients and mobile workers seeking assistance with creaky legacy systems and applications that are often fragile, prone to breakdowns, and not sufficiently scalable or flexible to meet new service demands. In certain case scenarios, a business can sometimes lack the necessary skills to maintain its legacy systems, putting it at risk of failing to do so.
Other businesses undergoing digital transformations are looking for a fresh start, a blank slate to build a new IT infrastructure for new ventures and innovative business models. Often, when a business goes through a merger, acquisition, or divestiture, this happens. While these events provide an opportunity to start a new computing environment, existing data will most likely be accessed by the new entity. This means that the new entity and its predecessors must ensure that separate data sets can be managed separately once held by parts of the organization together.
The cloud is loaded with promise. However, while the transition from a company’s data centers to the cloud appears simple in theory, it must be carefully planned. If the planning is not sound, the information systems that the company depends on every day will risk major disruptions. Thus, a company’s digital transformation initiatives are likely to falter in the absence of considerable forethought. Since a digital transition is about the company’s future, planning to support it should depend on its strategy. Not on IT-related issues First, managers need to concentrate on what is important to their company’s growth and how a cloud deployment can support its growth.
Cloud computing is changing the way businesses develop and deploy applications all over the world. Compared to on-premise software development environments, the cloud offers lower upfront costs and superior flexibility, extensibility, and scalability. These advantages are particularly valuable for startups and SMEs, as they typically have more limited financial resources, operational expertise, and IT staff. The number of software developers and their strategic importance to organizations is increasing as software, and cloud-based technologies have become essential across industries and businesses of all sizes.
To process transactions easier and quicker and bring better products and technologies to the market more quickly and efficiently, the move to digital transformation requires access to new applications such as advanced analytics. Without them, a company’s ability to gain necessary insights from the data it gathers about customers and its operating performance will be limited. Companies will struggle to analyze the massive volume of data generated by the Internet of Things (IoT) sensors without the processing power of a public cloud vendor. Digital transformations are not suited to traditional IT systems. They are not sufficiently flexible. They are insufficiently responsive. DigitalOcean (1) aims to tackle this hindrance and set up a revolutionary cloud computing method.
What is the DigitalOcean?
DigitalOcean is a cloud computing company that provides software developers with an Infrastructure as a Service (IaaS) platform. Open-source developers love DigitalOcean, which wants to compete with Amazon Web Services (AWS) and Google Compute Engine (2). Developers introduce a remote virtual machine (VM) instance, which DigitalOcean refers to as a “droplet,” to deploy DigitalOcean’s Infrastructure as a Service (IaaS) environment. The droplet’s size, the geographical region and data center it will run in, and the Linux operating system it will use (Ubuntu, CentOS, Debian, Fedora, CoreOS, or FreeBSD) are all options for developers (3).
For encrypted communication, Secure Shell (SSH) is also supported. Developers can also generate droplets from current VM images that come with pre-installed applications instead of picking a Linux distribution, an option called One-click Apps by DigitalOcean. DigitalOcean has nine droplet sizes to choose from. The smallest size starts with 1 CPU and 20 gigabytes of solid-state drive (SSD) storage for 512 megabytes of RAM and costs 5 dollars a month as of this writing. The largest droplet has 64 gigabytes of RAM, 20 CPUs, and 640 gigabytes of SSD storage and costs 640 dollars per month as of this writing. Developers can resize their droplets after they’ve been created. Developers can use the control panel to scale and rebuild droplets in response to workload changes and backup and redirect network traffic between droplets. Team Accounts is a feature that allows users to share resources among themselves on DigitalOcean (4).
DigitalOcean may be much younger and smaller than industry behemoths with deep pockets, but it is a force to be reckoned with. It, on the other hand, is giving them a run for their money. This New York-based startup has become the most popular cloud hosting business among developers in less than five years. Netcraft reported back in December 2013 that DigitalOcean had surpassed Amazon to become the fastest growing cloud provider. For a startup that was barely two years old, this was certainly not an easy feat. The recent Netcraft report claimed that DigitalOcean has officially become the world’s second-largest hosting company. It’s in a position that many infrastructure firms would love to be in.
Advantages of DigitalOcean
Consoles from popular cloud providers make you feel smooth. There are way too many knobs to deal with, dials, switches, and levers. At one time, the AWS Management Console was simple (5). It has become too bloated and sluggish as the number of services and features has grown. The leadership portal of Azure chose eye candy over functionality. This imitates the touch interface of apps usually seen on tablets. Google Developer Console is superior to the other two, but it could be made even simpler. The user interface of DigitalOcean is super simple and minimalistic. There are just enough connections and buttons that give you access to the available features.
It has everything you need to build, deploy, and manage scalable web applications. By saying it is not enterprise-ready, competitors can counter this argument. DigitalOcean, on the other hand, is a reliable platform for running common open source workloads. Features such as VPN and peering may not be supported, but it offers enough capabilities that developers expect. Many web and digital agencies recommend DigitalOcean to their clients for hosting public websites. DigitalOcean exposes simple and minimalistic APIs for automation and integration with third-party tools. Once an API token is generated, developers can invoke the API using standard HTTP tools such as curl.
The simplicity of DigitalOcean does not come at the expense of performance. It was one of the first companies in the industry to offer virtual machines based on solid-state drives. It offered IPV6 long before it began to be discussed by mature cloud providers. The droplets, as DigitialOcean refers to its virtual machines, have the fastest boot times. Google Compute Engine is the only IaaS that comes close to it. It boasts a lightning rate of 55 seconds to supply the droplets. The cloud servers are built with dedicated ECC Ram and RAID SSD storage on powerful Hex core machines. Private networking among the VMs is available in select regions for running database clusters and distributed systems.
The documentation from DigitalOcean covers it all. For developers working on any cloud platform, the best thing about it is that the tutorials are useful. Check out DigitalOcean’s documentation the next time you want to learn about cutting-edge open source technology. The unique approach of crowdsourcing the content is the secret behind the rich documentation. DigitalOcean wants the documentation efforts to be driven by the community. Although many companies outsource the documentation to technical authors and professional agencies, DigitalOcean is more transparent. On its webpage, it does have a section where experts are invited to contribute to the documentation.
A sizable community surrounds DigitalOcean. The community plays an important role in the project’s success, from contributing to the documentation to responding to questions in the forum. It’s one of the first platforms to get support from cutting-edge technology. On DigitalOcean, you can launch anything from CoreOS to the latest version of Docker Swarm. While Vagrant, Packer, and Atlas from HashiCorp support DigitalOcean, Docker Machine promotes pre-configured Docker hosts’ launch. Bitnami has over 100 appliances ready to be launched on DigitalOcean, the open-source marketplace.
Joining the IPO league
Digital Holdings, Inc. plans to trade under the ticker symbol DOCN on the NYSE. It has never been traded on a public stock exchange. The firm listed a 100 million dollar figure as a placeholder in the S-1 filing, which will be updated when it sets a price range goal for the IPO. Throughout its almost ten years in business, DigitalOcean has been privately owned. It will be a publicly-traded company once the IPO (6) is completed. DigitalOcean hasn’t set a price for its stock yet. It is currently using $100 million as a placeholder figure for the IPO, which it will update once its target price range is determined. On November 20, 2020, DigitalOcean decided to file a confidential filing. The deal’s joint bookrunners are Morgan Stanley, Goldman Sachs, J.P. Morgan, BofA Securities, Barclays, KeyBanc Capital Markets, Canaccord Genuity, JMP Securities, and Stifel. There were no pricing terms disclosed (7).
Fundings and growth
In 2020, DigitalOcean received nearly 318.4 million dollars, up nearly 25 percent from the 254.8 million dollars in revenue it generated in 2019. (8) Between 2019 and 2020, its losses grew relatively little, going from around 40.4 million dollars in 2019 to about 43.6 million dollars in 2020. As per the company’s S-1 document, it has over five lakh clients in 185 countries. Among its consumers, RouteTrust, Cloudways, and Centra are listed. Developers, startups, and small businesses focus on DigitalOcean, which the business lists as just a risk factor in the statement (9).
“Our core customer base is made up of individual developers, startups at the early stage, and small-to-medium-sized enterprises, many of whom are planning for high growth. We expect that scaling our platform to meet the needs of such customers as their usage of our platform increases will be a part of our growth path,” the company wrote. Consequently, if such clients do not grow as anticipated, our growth path may be adversely affected. Furthermore, our inability to provide both appropriate services to support their businesses at scale and appropriate and appropriately priced services for the initial stage of their business could hurt our business, financial condition, and operating results”.
Here’s an excerpt S-1 statement from DigitalOcean:
“Upon finalization of our IPO, we are seeking to expand our investment in Hub for Good to promote further the use of cloud computing by entrepreneurial and developer communities to innovate as well as make our world a much better place. We’ve decided to join the Pledge 1 percent movement. We will set aside a dollar amount equal to one percent of our equity valuation at the time of our IPO pricing to expand our Hub for Good program over the next ten years. We are proud to expand Hub for Good, and we are excited to show that our technology can be a force for good throughout our world and that the community is larger than us alone” (10).