DigitalOcean is laying off staff, sources say 30-50 affected

Voss

After appointing a new CEO and CFO last summer, cloud infrastructure provider DigitalOcean is embarking on a wider reorganisation: the startup has announced a round of layoffs, with potentially between 30 and 50 people affected.

See: https://techcrunch.com/2020/01/17/digitalocean-layoffs/

seriesn

Business management 102. Either you can increase business or cut down on expenses and save money on toilet paper.

Profitability comes first. Pretty sure they are done riding out the stock holders and VC funding.

Voss

Loved DO in the beginning, but the sad state of affairs is that it attracts a particular type of clientele that doesn't bring the sort of money that AWS, Azure, and GCloud are able to rake in. Those tech giants are the future however unfortunate that might be for some: bottom-of-the-barrel prices for instances doesn't bring the sort of steady and profitable income that was envisioned.

Most hosts here are not operating at the same scale, but they provide a microscopic overview of the way the wind blows in terms of customer behaviour and expectations.

deank

The end is nigh.

PureVoltage

Sounds about right, time for them to fire a bunch of people to make up the losses. At the end of the day they need to cut costs I bet.

InceptionHosting

Shame for the people, I bet it is a dream job for some.

Francisco

@AnthonySmith said:
Shame for the people, I bet it is a dream job for some.

Probably not.

Much of the 'startup mentality' for employees is to be changing jobs every 18 months or so to 'increase your market value' or some shit.

There's no doubt they're spending literally millions in payroll & benefits every month alone. They're hosted in some fairly expensive facilities and have a LOT of VC money out there that's due for some pay back.

A few years ago they did a credit prune because the liabilities they had were absolutely insane. People with $1000 in free credit sitting and crap like that.

I get the feeling they were wanting to sell the brand during the prune but either didn't get a price they liked, or didn't get an offer, period. I've always figured if DO sold to someone it'd probably be to IBM. I don't think DO would fit into any of the other bigger vendors.

Francisco

vyas

@Francisco said:

I get the feeling they were wanting to sell the brand during the prune but either didn't get a price they liked, or didn't get an offer, period. I've always figured if DO sold to someone it'd probably be to IBM. I don't think DO would fit into any of the other bigger vendors.

IBM cloud (was that rebranded cloudant?) from what I have been told is quite bad. I friend of mine, another startup founder, had won some competition here that earned him 1 or 2 years of IBM cloud solution credits. He gave up on Day 2. The product integration is not very good, systems are slow like a dog- is what I remember from that hourlong conversation.

MikeA

@vyas said:
IBM cloud (was that rebranded cloudant?) from what I have been told is quite bad. I friend of mine, another startup founder, had won some competition here that earned him 1 or 2 years of IBM cloud solution credits. He gave up on Day 2. The product integration is not very good, systems are slow like a dog- is what I remember from that hourlong conversation.

I used IBM Cloud briefly when testing for virtual machines to move stuff to, it was fine (drive IO was actually far better than other cloud services if I remember correctly), but bandwidth is pretty limited.

deank

You know, if IBM had a sub-brand in iVM, would Apple sue IBM?

IBM and IVM, sounds quite ... close.

Or would IBM sue any company that uses iVM?

havoc

There is good commentary by the founder on hn. Doesn't sound like they're in trouble or anything.

Just new head honcho cleaning house

blackjack4494

@vyas said:
IBM cloud (was that rebranded cloudant?) from what I have been told is quite bad. I friend of mine, another startup founder, had won some competition here that earned him 1 or 2 years of IBM cloud solution credits. He gave up on Day 2. The product integration is not very good, systems are slow like a dog- is what I remember from that hourlong conversation.

Well have you tried Oracle Cloud? I created an account few days ago. Had to contact support twice because they had to manually verify my mobile and payment details process is bugged sometimes as well.
Their control panel is super slow and in the end it just says network error response timeout and https errors ?
The guy in support chat told me they know about it.
So far I couldn't even test it. All I wanted to do is give the free forever cloud a try. They also have some other nice goodies.
Awful experience.

Voss

@Francisco said: I get the feeling they were wanting to sell the brand during the prune but either didn't get a price they liked, or didn't get an offer, period. I've always figured if DO sold to someone it'd probably be to IBM. I don't think DO would fit into any of the other bigger vendors.

While not operating under the same sort of conditions, I wonder what awaits other providers like Vultr. 5 years from now, I don't see either Vultr or DO being around or maintaining the sort of market share they currently have (which 'as is' is relatively insignificant outside of the bottom-of-the-barrel clientele).

vyas

@Voss said:

@Francisco said: I get the feeling they were wanting to sell the brand during the prune but either didn't get a price they liked, or didn't get an offer, period. I've always figured if DO sold to someone it'd probably be to IBM. I don't think DO would fit into any of the other bigger vendors.

While not operating under the same sort of conditions, I wonder what awaits other providers like Vultr. 5 years from now, I don't see either Vultr or DO being around or maintaining the sort of market share they currently have (which 'as is' is relatively insignificant outside of the bottom-of-the-barrel clientele).

Typically players number 7 and lower in any market start consolidating, as a means of survival. Or investor pressure. Or to ward off unwanted / hostile takeover. Vultr Linode DO...... fall into that bracket. Top 5 I suppose will be (not in order) AWS, GCP, Alibaba, Tencent(?), Oracle, Azure....
Not sure where IBM and HP figure in this list. Or Upcloud.

Francisco

@Voss said:

@Francisco said: I get the feeling they were wanting to sell the brand during the prune but either didn't get a price they liked, or didn't get an offer, period. I've always figured if DO sold to someone it'd probably be to IBM. I don't think DO would fit into any of the other bigger vendors.

While not operating under the same sort of conditions, I wonder what awaits other providers like Vultr. 5 years from now, I don't see either Vultr or DO being around or maintaining the sort of market share they currently have (which 'as is' is relatively insignificant outside of the bottom-of-the-barrel clientele).

The DO guy that was on hackernews mentioned that DO is operating at a slight loss but still has the majority of their cash reserves from the their 2nd round of fundraising.

Remember, Choopa owns gameservers.com and is on a very short list of 'approved sellers' for any of the recent battlefield games, etc. I'm sure Vultr does fine but I'm sure every location Vultr is in, they're just using spare gameservers.com space. Which is obviously very smart on their part

Linode could likely hold out but I see DO being sold, i'm sure that was the intention of the company from the start.

Francisco