DigitalOcean Outlines Cloud Growth Strategy Under New CEO

Cloud infrastructure provider DigitalOcean Holdings now has new leadership to push it forward as it aims to carve out a niche in the cloud market against rivals large and small.

DigitalOcean is sometimes referred to as an "alternative cloud" provider as it is a different option than the big three public cloud hyperscalers (Microsoft, Google, and AWS).

The company reported full-year 2023 financial results on Feb. 21, along with commentary from newly appointed CEO Paddy Srinivasan on his vision and priorities for the company. While 2023 saw slower growth amid macroeconomic challenges, DigitalOcean is positioning itself for reaccelerated growth and innovation under its new leadership.

The company reported that revenue for the fourth quarter of 2023 was $181 million, up 11% year-over-year. Full-year 2023 revenue was $693 million, up 20% from 2022.

"The market that DigitalOcean is focused on — the cloud computing market, and especially the one that serves developers — is one of the largest and fastest growing markets in the history of technology," Srinivasan said during his company's earnings call. "DigitalOcean has more than 640,000 customers, a global footprint with revenue in over 190 countries, and serves customers across a wide range of industries and use cases."

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Integrating AI/ML Capabilities Is a Key Priority

A top priority, Srinivasan said, is integrating DigitalOcean's recently acquired Paperspace artificial intelligence/machine learning (AI/ML) platform with its core infrastructure-as-a-service (IaaS) offerings.

Srinivasan said the Paperspace technology extends DigitalOcean's platform by enabling developers to develop, test, and deploy AI- and ML-centric cloud applications that harness the power of GPUs in ways that have been predominantly available only to large enterprises. Overall, he sees massive potential in bringing AI/ML capabilities to DigitalOcean's target customer base.

"I'm a firm believer that the future of any kind of application development on the cloud is going to be AI- and ML-centric for the years to come," he said.

DigitalOcean plans on continuing to invest in its AI/ML strategy to take advantage of the market opportunity by bringing simple, easy-to-use AI/ML capabilities on both hardware and software to developers, machine learning engineers, and application builders, according to Srinivasan.

He aims to focus on the developer software experience versus just the AI/ML hardware.

"I believe that there's a lot more to this than just building and training LLMs [large language models]," Srinivasan said. "There's obviously a hardware part to it, but I think the power of this is again going to default back to software — that's where the magic is going to happen."

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Enhancing Core Infrastructure Offerings

In addition to AI/ML integration, Srinivasan emphasized he is also focused on enhancing DigitalOcean's core infrastructure and platform.

Srinivasan said DigitalOcean is enhancing its cloud platform with updated capabilities to help users operate and scale globally. Among the updates he highlighted are global load balancing, data resiliency, granular identity and access management, and storage enhancements.

DigitalOcean is also making investments in its network infrastructure to boost platform speed and performance.

"We are investing in both network and infrastructure, providing increased diversity, lower latency, and enhanced speed on our core IP backbone and edge to enhance the performance of our platform to benefit our customers," he said.