DigitalOcean, which offers a cloud service similar to Amazon Web Services, has hired its first CTO, James Cariello, a Google veteran from its cloud platform. It has also hired a veteran CFO, Brian Cohen, who specialises in startups.
Three years ago, DigitalOcean got started when brothers Ben and Moisey Uretsky met Mitch Wainer through Craigslist.
DigitalOcean’s sales pitch is straightforward: It offers virtual servers that are just as big and high-powered as cloud leader Amazon, but with often-lower prices and a user interface that looks like it was built this decade. It’s found tremendous success, with Andreessen Horowitz leading a $US37 million funding round last year.
“All those other incumbents are coming at it from the same angle,” says DigitalOcean CEO Ben Uretsky.
Today, DigitalOcean is ranked as the third largest hosting company in the world in terms of number of web sites hosted, behind Amazon Web Services and French company OVH, and has grown 14x in the last year, from 10,000 sites hosted to 140,000.
Microsoft and Google offer competing services as well, but where they’re focused on hosting large web applications for enterprise clients, DigitalOcean is for hosting websites and the web apps that run on them.
Beyonce is probably DigitalOcean’s highest-profile customer, but otherwise, their users are mainly rank-and-file developers trying to build something that works well quickly. The bigger enterprise-focused providers may be a making more money, but in terms of who’s using it, DigitalOcean is growing like mad.
Uretsky says that he thinks the company is on the fast-track to hitting number 2, leaving Amazon as the only hurdle left to cross. But reaching that point is going to require gearing up and growing up, with a more established executive team rather than the startup’s previous live-and-let live philosophy.
It’s the potential opportunity that brought new DigitalOcean CTO James Cariello over from Google to DigitalOcean. At Google, he was a technical manager responsible for completely changing the way Google’s cloud platform dealt with messaging — a system that sounds boring, but let Google’s cloud get bigger and badder during his 5-year stint there.
In fact, Google was going so well for him that he had always said that he would only leave if he could do his own startup. But he was friendly with DigitalOcean’s founders, and took a meeting as a favour.
He came away impressed with DigitalOcean’s huge potential, and as an added bonus, the hard part of setting up a startup was already done for him.
“DigitalOcean is better than my own startup,” Cariello says.
The strategy from here on out, Cariello says, is to win over developers with total simplicity, without getting caught up in the zillions and zillions of additional features Amazon Web Services adds every day.
DigitalOcean may never win over the “Netflixes and Goldmach Sachs of the world,” he says, but they can win the hearts of “the guys cranking out the code.” Maybe it will never reach critical mass with large enterprises, he says, but there’s tremendous opportunity in being the go-to for everybody else as cloud adoption increases.
“It’s not just the piece of the pie you have, it’s that the pie itself is growing,” Cariello says. And any startup that opts to launch with DigitalOcean is way more likely to stay with it as it grows. Just look at Airbnb, which grew up as Amazon Web Services did.
Meanwhile, on the finance side, new CFO Brian Cohen is a 25-year tech industry veteran who usually gets called in when a startup is reaching the critical mass where more money is going to start coming in than they know what to do with. In fact, he’s done it about 40 times before.
But DigitalOcean is so exciting to Cohen that he’s traded his Red Sox cap for a Yankees one in a move from Boston down to New York to meet the opportunity.
“Nothing really surprised me” before DigitalOcean, he says. “It’s a really special company.”
Special or not, though, competition is going to be stiff, not least from Cariello’s ex-employer Google, which is gunning for the same developers as DigitalOcean.
“I know Google well, and it’s certainly something anyone should be afraid of,” Cariello says.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.