DigitalOcean Sees a New Wave of Cloud Opportunity

DigitalOcean is growing its cloud services with new Managed Kafka and a direction to provide more AI capabilities.

Sean Michael Kerner, Contributor

November 3, 2023

3 Min Read
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DigitalOcean might not be one of the Big Three cloud hyperscalers, but it's still seeing a fair share of growth and opportunity as it grows its capabilities.

DigitalOcean reported its third-quarter fiscal 2023 financial earnings on Nov. 2. The cloud provider reported 16% year-over-year revenue growth to $177.1 million in the quarter.

The company also provided details about several products that it recently released.

Spruill pulled quote


After facing growth struggles over the past year, DigitalOcean said business performance is beginning to stabilize and reaccelerate. The company believes its product innovation combined with operating efficiency gains have established a solid foundation for renewed growth. 

"A big portion of our focus over the past several months has been on our ongoing efforts to deliver on our product roadmap and continue to add critical capabilities that enable our customers to build and scale their own businesses," DigitalOcean CEO Yancey Spruill said during his company's earnings call.

DigitalOcean's Expanding Cloud Services Portfolio Includes Kafka

The past quarter has been a busy one for DigitalOcean as the cloud provider announced a series of new services.

Among the new services is Managed Kafka, which DigitalOcean launched in September. Managed Kafka is a fully managed database service designed for companies with significant data streaming needs. Kafka is a popular open source tool that excels at real-time data streaming but can be complex for smaller companies to implement and manage on their own. DigitalOcean's new managed service aims to alleviate that complexity.

Related:DigitalOcean Currents Report Finds Cloud Optimism with SMBs

"With our new fully Managed Kafka as a service offering, companies can focus on their development environment and not be slowed down by complex processes," Spruill said. "Customers have provided strong positive feedback about Managed Kafka, citing that it is allowing them to focus their time and resources on their customer-facing activities, referring to their increased productivity as a game-changer."

Premium Droplets and Scalable Cloud Database Storage Debut

DigitalOcean refers to its cloud compute instances as "droplets" and regularly adds new variants to its services mix.

In the third quarter, the company introduced premium general-purpose droplets, which bring enhanced CPU, memory, and storage capabilities to a wider array of cloud-native applications. DigitalOcean also launched scalable storage for PostgreSQL and MySQL managed databases, allowing organizations to more easily scale their database storage independently of compute and memory.

"This introduction is a deliberate effort to better enable customer productivity on our platform," Spruill said. "By introducing scalable storage, we are better serving our customers as they can monitor and optimize their utilization to get the best return on their investment."

New AI Capabilities from Paperspace Are Coming

Back in July, DigitalOcean acquired privately held cloud infrastructure services vendor Paperspace in a bid to help grow its artificial intelligence (AI) capabilities. Paperspace is in the business of helping organizations with GPU-accelerated applications for AI.

By acquiring Paperspace's specialized AI cloud infrastructure, DigitalOcean is aiming to capitalize on growing AI demand across a wide range of industries. The company is looking to empower more customers to efficiently build, deploy, and scale AI-driven solutions using its expanded platform.

"While we are still only a few months into the integration process, the demand for Paperspace's services has been very strong, and we continue to learn more about the market and how customers are leveraging our capabilities to develop and grow their businesses," Spruill said.

About the Author(s)

Sean Michael Kerner


Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.

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