DigitalOcean: World’s 2nd Largest Web Host but is it sustainable?

Thu, 7th May 2015, 18:03

The latest press release from DigitalOcean has them gloating over being ranked as the second largest hosting provider in the world, at least according to the latest report published by Netcraft.

DigitalOcean claims it has grown exponentially, jumping in the ranks from third largest hosting provider in November 2014, to its current position, by delivering a simple hosting option for software developers around the world.

Ben Uretsky, CEO of DigitalOcean states

“We concentrate on providing individual software developers with a fantastic user experience to empower them to build and scale web applications. It’s a massive market that larger cloud providers aren’t catering to; that’s why we don’t consider big names such as Amazon Web Services to be a competitor. There is a fundamental difference in focus and priorities. At DigitalOcean, we prioritize offering simple solutions for web developers and we are proud to be the second largest web hosting provider in the world.”

Since the company's inception in 2011, DigitalOcean has continued to build a developer-friendly platform with simple server provisioning and an intuitive control panel, all with market crushing, competition stifling pricing! Large infusions of investment cash have allowed DigitalOcean to maintains its vision of simplifying innovation to enable developers to focus on what matters – their applications.

And therein may lie Digital Ocean’s achilles heel. Numerous articles have been written, on HostJury and elsewhere, apprising readers of the long term viability and folly that can befall any company with suspect pricing structures. But this underlying weakness, coupled with phenomenal growth can exacerbates the situation. Back in 2013, Digital Ocean’s slash and burn pricing was annihilating the competitors when by their own admission, the cracks were beginning to show.

While growing a company to become the second largest web host in the world, in more or less four years, by any metric may be commendable, achieving the stature of second most profitable may prove to be more allusive.

Last month, DigitalOcean announced its third data center in Europe and its 10th worldwide, located in Frankfurt, Germany. The launch was the most successful international launch to date, adding 1,000 servers to the network and 100 new customers daily.

In 2013, Digital Ocean was adding 500 customers per day. Web Hosting