Amazon Web Services has evolved into the 800-pound gorilla of the cloud-infrastructure space, with thousands of clients (big and small) using its resources to power Websites and online services.
Other technology giants are investing millions in cloud structure, with an eye toward battling Amazon on its own terms. But can smaller startups compete?
Some venture capitalists think so, which is why DigitalOcean just received a Series A round of $37.2 million from Andreessen Horowitz and other investors. “We’re the 9th largest infrastructure provider worldwide and it’s such a capital intensive industry,” DigitalOcean co-founder and CEO Ben Uretsky told TechCrunch. “Our users can buy a slice of a physical machine for a short period of time for a fraction of a penny. Securing this capital is very important to make sure that we stay ahead of our customers’ demand.”
DigitalOcean’s take on cloud infrastructure is to offer its virtual private servers for cheap: for example, $10 a month (which its Website advertises as the “most popular plan”) gets you 1GB memory, a 1-core processor, a 30GB SSD disk, and 2TB transfer. The company hosts datacenters in multiple locations around the world and, as TechCrunch points out, competes head-to-head with Rackspace and other, smaller vendors.
Is simplifying pricing—and offering a handful of more advanced hosting features—enough for any company to challenge AWS, which continues to add features and pricing tiers at a fairly rapid clip? Certainly not in the short term—but with the need for cloud infrastructure clearly on the rise, DigitalOcean can afford to play the long game, or perhaps position itself for a buyout of some sort.