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DigitalOcean takes out a $130M credit line to scale its public cloud globally
Running a public cloud isn’t cheap, especially if the goal is to provide a similar level of service as Amazon Inc. and the other web giants that dominate the infrastructure-as-a-service market. To try and level the playing field somewhat, DigitalOcean Inc. this week revealed that it’s taken out a $130 million line of credit from a group of top financial institutions led by KeyBanc Capital Markets Inc.
The provider’s chief executive, Ben Uretsky, said in an interview that much of the cash will be used to fund the expansion of its data center network, which currently includes 13 facilities around the world. DigitalOcean intends to open another site in India next month to monetize the growing demand for cloud services among the country’s numerous technology firms. The nation is home to several of the world’s largest outsourcing providers and practically every major U.S. software maker employs engineers locally, often thousands in the case of big names like IBM Corp.
The fact that DigitalOcean’s cloud is specifically geared towards the preferences of application developers puts it in a good position to tap the market. But the massive amount of revenue to be had in India also attracted the attention of its competitors, most notably Amazon, which has been working to set up a local data center since at least June 2015. Microsoft Corp. is likewise planning to launch a facility in the country later this year, while a regional edition of IBM Softlayer has been available for eight months now.
As a result, DigitalOcean will also need to invest some of the new capital into making its service more competitive on the functional front. One of the ways in which Uretsky said he plans to accomplish the goal is introducing more storage options for users, who are currently forced to keep large datasets on external cloud services. The executive said the addition is set to roll out in December, by which time Microsoft will have likely launched its Indian facility. And Amazon probably won’t be too far behind, at least judging by the rapid pace at which it’s historically released upgrades to its infrastructure-as-a-service platform.
Image via Pixabay
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