DigitalOcean is raising $83 million to take on Amazon Web Services

We’re hearing that New York-based DigitalOcean, a hot cloud computing startup founded in 2011 that competes head-to-head with the $US6 billion Amazon Web Services juggernaut, has closed a huge round of Series B funding.

The number we’re hearing is $US83 million. Digital Ocean would not comment on the round.

Like Amazon Web Services, DigitalOcean lets its customers swipe a credit card and get access to an almost bottomless supply of raw computing power, hosted in its distant data centres.

The concept is called “infrastructure-as-a-service,” or IaaS, and analyst firm IDC estimated earlier this year that it will be a $US24.6 billion market by 2018 — a claim bolstered by strong cloud revenues from Microsoft and Amazon.

But DigitalOcean has always strived to set itself apart by bending over backwards for its developer customers with a simple user interface, lower prices, and higher performance.

DigitalOcean’s developer-first strategy seems to be working out pretty well, with high-profile customers like Beyonce coming aboard..

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.

A key challenge for DigitalOcean as it works to conquer that market is that the same things that make it attractive to developers — its focus on simplicity actually makes it less attractive to large enterprises, who demand tight control and support for legacy technologies, a space where the likes of Microsoft and Amazon have thrived.

Still, while it may never find huge success as a hosting platform for huge, complex enterprise apps, DigitalOcean has long held that it can be the cloud of choice for your everyday programmer trying to build cool web sites and web apps. This funding would go a long way to that end.

This new round of funding would come just over a year since it raised a $US37 million Series A round led by Andreessen Horowitz, bringing its overall funding to $US90.4 million

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