Highlight Report

DigitalOcean’s simple approach to cloud offers enterprises an alternative to hyperscale domination

November 9, 2021

The Bottom Line: You would be unwise to ignore a scrappy underdog that boasts the pricing and community to become DevOps’ best friend

DigitalOcean is just the type of scrappy underdog that many DevOps teams love to adopt. It focuses on open source, loves communities, and is all-in on agile development. Don’t ignore it, even if the CIO says they’d never use DigitalOcean because of existing corporate contracts. Small teams and a growing citizen development community will always find ways to meet their needs outside the approved channels.

Based on DigitalOcean’s pricing model alone, service providers should expect enterprise customers to experiment with them. That may result in integration and management issues further down the line, offering service providers the opportunity to step up to offer support.

DigitalOcean is a born-in-the-cloud infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) for DevOps, software hosting, and application development. It is attempting to carve out a niche by focusing on open-source tools and follows on from the likes of GitHub and Atlassian by promoting community as a core component of its offering.

Unlike hyperscalers such as AWS and Google, DigitalOcean is setting its sights on cloud provision for start-ups and small-to-medium sized businesses. Still, even enterprise DevOps teams may find their heads turned by the DevOps-friendly, lower-cost, quick-request alternative offered by the New York-based challenger.

DevOps teams seek ways that make “moving to” and “developing in” the cloud easier as they modernize, migrate, and develop cloud-first solutions. While Microsoft’s Azure, Amazon’s AWS, and Alphabet’s Google Cloud Platform are typically the first that come to mind, there are alternatives for both small-to-medium businesses (SMBs) and bespoke larger enterprise needs.

Pricing simplicity offers enterprise DevOps teams a chance to experiment

DigitalOcean focuses on the SMB market (typically up to 500 employees), but it is making moves that may entice larger enterprises to consider using its services. Its primary enticement is its pricing model.

Compare the eight pricing models at Digital Ocean versus more than 100 pricing configurations at AWS. While the hyperscalers offer more breadth for testing or simple applications, DigitalOcean targets software development teams with an easy and cost-sensitive way to deliver their proof-of-concept efforts. In our experience, simplicity often wins, especially in focused, fast-moving projects.

The primary cautions facing larger firms will be shadow IT, security, and data governance. Yet, savvy services providers may consider DigitalOcean as a solution that offers a lower-cost, quick-request alternative for DevOps test beds for their clients. These services providers can use their tools and capabilities to address these concerns through other aspects of their contracts and supplier governance models.

It won’t tick every enterprise box, but it may be a Goldilocks solution for bespoke cases

Reasons to skip DigitalOcean and stay with your enterprise hyperscaler come down to the depth of service for complicated development and deployment solutions. It’s not likely you’ll ever run SAP on DigitalOcean. And DigitalOcean doesn’t offer Hadoop clusters or hosted databases, nor do they have the breadth of data centers that the likes of AWS or Azure can offer. But for all that, even large enterprises may consider DigitalOcean as a project-specific application DevOps alternative or as a tool for bespoke application hosting serving a well-defined business need.

DigitalOcean went public in March, and its market capitalization has grown 65% since to $7.5 billion. But to stay relevant, it is going to have to expand. On September 7, 2021, it did just that with the acquisition of HFS OneOffice™ Hot Vendor Nimbella. Nimbella impressed us with its low-code approach to managing Kubernetes-based microservices applications.

This acquisition fits nicely with DigitalOcean’s growing presence in the cloud-native marketplace as its SMB and large enterprise targets attempt to develop, manage, and stay current with Kubernetes and its essential role in connecting the dots for microservices functionality and deployment. DigitalOcean’s breakaway may be in how it embraces the trend for openness in sharing development ideas, efforts, and success through fostering a community. This has worked well for community and tool providers like GitHub (now part of Microsoft), GitLab, Atlassian, and Twilio.

DigitalOcean may just be another rocket ship if it can keep its focus on quality tools and environments for its community to deliver business outcomes efficiently and effectively.

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