cloud storage
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Operating in the cloud is soon going to be a reality for many businesses whether they like it or not. Points of contention with this shift often arise from unfamiliarity and discomfort with cloud operations. However, cloud migrations don’t have to be a full lift and shift.
Instead, leaders unfamiliar with the cloud should start by moving over their disaster recovery program to the cloud, which helps to gain familiarity and understanding before a full migration of production workloads.
Disaster recovery as a service (DRaaS) is cloud-based disaster recovery delivered as a service to organizations in a self-service, partially managed or fully managed service model. The agility of DR in the cloud affords businesses a geographically diverse location to failover operations and run as close to normal as possible following a disruptive event. DRaaS emphasizes speed of recovery so that this failover is as seamless as possible. Plus, technology teams can offload some of the more burdensome aspects of maintaining and testing their disaster recovery.
When it comes to disaster recovery testing, allow for extra time to let your IT staff learn the ins and outs of the cloud environment.
DRaaS is a perfect candidate for a first step into the cloud for five main reasons:
Do your research to determine if DRaaS is right for you given your long-term organizational goals. You don’t want to start down a path to one cloud environment if that cloud isn’t aligned with your company’s objectives, both for the short and long term. Having cross-functional conversations among business units and with company executives will assist in defining and iterating your strategy.
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By the time Porter co-founders Trevor Shim, Alexander Belanger and Justin Rhee decided to build a company around DevOps, the pair were well versed in doing remote development on Kubernetes. And like other users, they were consistently getting burnt by the technology.
They realized that for all of the benefits, the technology was there, but users were having to manage the complexity of hosting solutions as well as incurring the costs associated with a big DevOps team, Rhee told TechCrunch.
They decided to build a solution externally and went through Y Combinator’s Summer 2020 batch, where they found other startup companies trying to do the same.
Today, Porter announced $1.5 million in seed funding from Venrock, Translink Capital, Soma Capital and several angel investors. Its goal is to build a platform as a service that any team can use to manage applications in its own cloud, essentially delivering the full flexibility of Kubernetes through a Heroku-like experience.
Why Heroku? It is the hosting platform that developers are used to, and not just small companies, but also later-stage companies. When they want to move to Amazon Web Services, Google Cloud or DigitalOcean, Porter will be that bridge, Shim said.
However, while Heroku is still popular, the pair said companies are thinking the platform is getting outdated because it is standing still technology-wise. Each year, companies move on from the platform due to technical limitations and cost, Rhee said.
A big part of the bet Porter is taking is not charging users for hosting, and its cost is a pure SaaS product, he said. They aren’t looking to be resellers, so companies can use their own cloud, but Porter will provide the automation and users can pay with their AWS and GCP credits, which gives them flexibility.
A common pattern is a move into Kubernetes, but “the zinger we talk about” is if Heroku was built in 2021, it would have been built on Kubernetes, Shim added.
“So we see ourselves as a successor to Heroku,” he said.
To be that bridge, the company will use the new funding to increase its engineering bandwidth with the goal of “becoming the de facto standard for all startups.” Shim said.
Porter’s platform went live in February, and in six months became the sixth-fastest growing open-source platform download on GitHub, said Ethan Batraski, partner at Venrock. He met the company through YC and was “super impressed with Rhee’s and Shim’s vision.
“Heroku has 100,000 developers, but I believe it has stagnated,” Batraski added. “Porter already has 100 startups on its platform. The growth they’ve seen — four or five times — is what you want to see at this stage.”
His firm has long focused on data infrastructure and is seeing the stack get more complex, saying “at the same time, more developers are wanting to build out an app over a week, and scale it to millions of users, but that takes people resources. With Kubernetes it can turn everyone into an expert developer without them knowing.”
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Startups and SMBs are usually the first to adopt many SaaS products. But as these customers grow in size and complexity — and as you rope in larger organizations — scaling your infrastructure for the enterprise becomes critical for success.
Below are four tips on how to advance your company’s infrastructure to support and grow with your largest customers.
If you’re building SaaS, odds are you’re holding very important customer data. Regardless of what you build, that makes you a threat vector for attacks on your customers. While security is important for all customers, the stakes certainly get higher the larger they grow.
Given the stakes, it’s paramount to build infrastructure, products and processes that address your customers’ growing security and reliability needs. That includes the ethical and moral obligation you have to make sure your systems and practices meet and exceed any claim you make about security and reliability to your customers.
Here are security and reliability requirements large customers typically ask for:
Formal SLAs around uptime: If you’re building SaaS, customers expect it to be available all the time. Large customers using your software for mission-critical applications will expect to see formal SLAs in contracts committing to 99.9% uptime or higher. As you build infrastructure and product layers, you need to be confident in your uptime and be able to measure uptime on a per customer basis so you know if you’re meeting your contractual obligations.
While it’s hard to prioritize asks from your largest customers, you’ll find that their collective feedback will pull your product roadmap in a specific direction.
Real-time status of your platform: Most larger customers will expect to see your platform’s historical uptime and have real-time visibility into events and incidents as they happen. As you mature and specialize, creating this visibility for customers also drives more collaboration between your customer operations and infrastructure teams. This collaboration is valuable to invest in, as it provides insights into how customers are experiencing a particular degradation in your service and allows for you to communicate back what you found so far and what your ETA is.
Backups: As your customers grow, be prepared for expectations around backups — not just in terms of how long it takes to recover the whole application, but also around backup periodicity, location of your backups and data retention (e.g., are you holding on to the data too long?). If you’re building your backup strategy, thinking about future flexibility around backup management will help you stay ahead of these asks.
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Remote work is no longer a new topic, as much of the world has now been doing it for a year or more because of the COVID-19 pandemic.
Companies — big and small — have had to react in myriad ways. Many of the initial challenges have focused on workflow, productivity and the like. But one aspect of the whole remote work shift that is not getting as much attention is the culture angle.
A 100% remote startup that was tackling the issue way before COVID-19 was even around is now seeing a big surge in demand for its offering that aims to help companies address the “people” challenge of remote work. It started its life with the name Icebreaker to reflect the aim of “breaking the ice” with people with whom you work.
“We designed the initial version of our product as a way to connect people who’d never met, kind of virtual speed dating,” says co-founder and CEO Perry Rosenstein. “But we realized that people were using it for far more than that.”
So over time, its offering has evolved to include a bigger goal of helping people get together beyond an initial encounter –– hence its new name: Gatheround.
“For remote companies, a big challenge or problem that is now bordering on a crisis is how to build connection, trust and empathy between people that aren’t sharing a physical space,” says co-founder and COO Lisa Conn. “There’s no five-minute conversations after meetings, no shared meals, no cafeterias — this is where connection organically builds.”
Organizations should be concerned, Gatheround maintains, that as we move more remote, that work will become more transactional and people will become more isolated. They can’t ignore that humans are largely social creatures, Conn said.
The startup aims to bring people together online through real-time events such as a range of chats, videos and one-on-one and group conversations. The startup also provides templates to facilitate cultural rituals and learning & development (L&D) activities, such as all-hands meetings and workshops on diversity, equity and inclusion.
Gatheround’s video conversations aim to be a refreshing complement to Slack conversations, which despite serving the function of communication, still don’t bring users face-to-face.
Image Credits: Gatheround
Since its inception, Gatheround has quietly built up an impressive customer base, including 28 Fortune 500s, 11 of the 15 biggest U.S. tech companies, 26 of the top 30 universities and more than 700 educational institutions. Specifically, those users include Asana, Coinbase, Fiverr, Westfield and DigitalOcean. Universities, academic centers and nonprofits, including Georgetown’s Institute of Politics and Public Service and Chan Zuckerberg Initiative, are also customers. To date, Gatheround has had about 260,000 users hold 570,000 conversations on its SaaS-based, video platform.
All its growth so far has been organic, mostly referrals and word of mouth. Now, armed with $3.5 million in seed funding that builds upon a previous $500,000 raised, Gatheround is ready to aggressively go to market and build upon the momentum it’s seeing.
Venture firms Homebrew and Bloomberg Beta co-led the company’s latest raise, which included participation from angel investors such as Stripe COO Claire Hughes Johnson, Meetup co-founder Scott Heiferman, Li Jin and Lenny Rachitsky.
Co-founders Rosenstein, Conn and Alexander McCormmach describe themselves as “experienced community builders,” having previously worked on President Obama’s campaigns as well as at companies like Facebook, Change.org and Hustle.
The trio emphasize that Gatheround is also very different from Zoom and video conferencing apps in that its platform gives people prompts and organized ways to get to know and learn about each other as well as the flexibility to customize events.
“We’re fundamentally a connection platform, here to help organizations connect their people via real-time events that are not just really fun, but meaningful,” Conn said.
Homebrew Partner Hunter Walk says his firm was attracted to the company’s founder-market fit.
“They’re a really interesting combination of founders with all this experience community building on the political activism side, combined with really great product, design and operational skills,” he told TechCrunch. “It was kind of unique that they didn’t come out of an enterprise product background or pure social background.”
He was also drawn to the personalized nature of Gatheround’s platform, considering that it has become clear over the past year that the software powering the future of work “needs emotional intelligence.”
“Many companies in 2020 have focused on making remote work more productive. But what people desire more than ever is a way to deeply and meaningfully connect with their colleagues,” Walk said. “Gatheround does that better than any platform out there. I’ve never seen people come together virtually like they do on Gatheround, asking questions, sharing stories and learning as a group.”
James Cham, partner at Bloomberg Beta, agrees with Walk that the founding team’s knowledge of behavioral psychology, group dynamics and community building gives them an edge.
“More than anything, though, they care about helping the world unite and feel connected, and have spent their entire careers building organizations to make that happen,” he said in a written statement. “So it was a no-brainer to back Gatheround, and I can’t wait to see the impact they have on society.”
The 14-person team will likely expand with the new capital, which will also go toward helping adding more functionality and details to the Gatheround product.
“Even before the pandemic, remote work was accelerating faster than other forms of work,” Conn said. “Now that’s intensified even more.”
Gatheround is not the only company attempting to tackle this space. Ireland-based Workvivo last year raised $16 million and earlier this year, Microsoft launched Viva, its new “employee experience platform.”
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Taking on Amazon S3 in the cloud storage game would seem to be a fool-hearty proposition, but Wasabi has found a way to build storage cheaply and pass the savings onto customers. Today the Boston-based startup announced a $112 million Series C investment on a $700 million valuation.
Fidelity Management & Research Company led the round with participation from previous investors. It reports that it has now raised $219 million in equity so far, along with additional debt financing, but it takes a lot of money to build a storage business.
CEO David Friend says that business is booming and he needed the money to keep it going. “The business has just been exploding. We achieved a roughly $700 million valuation on this round, so you can imagine that business is doing well. We’ve tripled in each of the last three years and we’re ahead of plan for this year,” Friend told me.
He says that demand continues to grow and he’s been getting requests internationally. That was one of the primary reasons he went looking for more capital. What’s more, data sovereignty laws require that certain types of sensitive data like financial and healthcare be stored in-country, so the company needs to build more capacity where it’s needed.
He says they have nailed down the process of building storage, typically inside co-location facilities, and during the pandemic they actually became more efficient as they hired a firm to put together the hardware for them onsite. They also put channel partners like managed service providers (MSPs) and value added resellers (VARs) to work by incentivizing them to sell Wasabi to their customers.
Wasabi storage starts at $5.99 per terabyte per month. That’s a heck of a lot cheaper than Amazon S3, which starts at 0.23 per gigabyte for the first 50 terabytes or $23.00 a terabyte, considerably more than Wasabi’s offering.
But Friend admits that Wasabi still faces headwinds as a startup. No matter how cheap it is, companies want to be sure it’s going to be there for the long haul and a round this size from an investor with the pedigree of Fidelity will give the company more credibility with large enterprise buyers without the same demands of venture capital firms.
“Fidelity to me was the ideal investor. […] They don’t want a board seat. They don’t want to come in and tell us how to run the company. They are obviously looking toward an IPO or something like that, and they are just interested in being an investor in this business because cloud storage is a virtually unlimited market opportunity,” he said.
He sees his company as the typical kind of market irritant. He says that his company has run away from competitors in his part of the market and the hyperscalers are out there not paying attention because his business remains a fraction of theirs for the time being. While an IPO is far off, he took on an institutional investor this early because he believes it’s possible eventually.
“I think this is a big enough market we’re in, and we were lucky to get in at just the right time with the right kind of technology. There’s no doubt in my mind that Wasabi could grow to be a fairly substantial public company doing cloud infrastructure. I think we have a nice niche cut out for ourselves, and I don’t see any reason why we can’t continue to grow,” he said.
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DigitalOcean has emailed customers warning of a data breach involving customers’ billing data, TechCrunch has learned.
The cloud infrastructure giant told customers in an email on Wednesday, obtained by TechCrunch, that it has “confirmed an unauthorized exposure of details associated with the billing profile on your DigitalOcean account.” The company said the person “gained access to some of your billing account details through a flaw that has been fixed” over a two-week window between April 9 and April 22.
The email said customer billing names and addresses were accessed, as well as the last four digits of the payment card, its expiry date and the name of the card-issuing bank. The company said that customers’ DigitalOcean accounts were “not accessed,” and passwords and account tokens were “not involved” in this breach.
“To be extra careful, we have implemented additional security monitoring on your account. We are expanding our security measures to reduce the likelihood of this kind of flaw occuring [sic] in the future,” the email said.
DigitalOcean said it fixed the flaw and notified data protection authorities, but it’s not clear what the apparent flaw was that put customer billing information at risk.
In a statement, DigitalOcean’s security chief Tyler Healy said 1% of billing profiles were affected by the breach, but declined to address our specific questions, including how the vulnerability was discovered and which authorities have been informed.
Companies with customers in Europe are subject to GDPR and can face fines of up to 4% of their global annual revenue.
Last year, the cloud company raised $100 million in new debt, followed by another $50 million round, months after laying off dozens of staff amid concerns about the company’s financial health. In March, the company went public, raising about $775 million in its initial public offering.
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Aqua Security, a Boston- and Tel Aviv-based security startup that focuses squarely on securing cloud-native services, today announced that it has raised a $135 million Series E funding round at a $1 billion valuation. The round was led by ION Crossover Partners. Existing investors M12 Ventures, Lightspeed Venture Partners, Insight Partners, TLV Partners, Greenspring Associates and Acrew Capital also participated. In total, Aqua Security has now raised $265 million since it was founded in 2015.
The company was one of the earliest to focus on securing container deployments. And while many of its competitors were acquired over the years, Aqua remains independent and is now likely on a path to an IPO. When it launched, the industry focus was still very much on Docker and Docker containers. To the detriment of Docker, that quickly shifted to Kubernetes, which is now the de facto standard. But enterprises are also now looking at serverless and other new technologies on top of this new stack.
“Enterprises that five years ago were experimenting with different types of technologies are now facing a completely different technology stack, a completely different ecosystem and a completely new set of security requirements,” Aqua CEO Dror Davidoff told me. And with these new security requirements came a plethora of startups, all focusing on specific parts of the stack.
What set Aqua apart, Dror argues, is that it managed to 1) become the best solution for container security and 2) realized that to succeed in the long run, it had to become a platform that would secure the entire cloud-native environment. About two years ago, the company made this switch from a product to a platform, as Davidoff describes it.
“There was a spree of acquisitions by CheckPoint and Palo Alto [Networks] and Trend [Micro],” Davidoff said. “They all started to acquire pieces and tried to build a more complete offering. The big advantage for Aqua was that we had everything natively built on one platform. […] Five years later, everyone is talking about cloud-native security. No one says ‘container security’ or ‘serverless security’ anymore. And Aqua is practically the broadest cloud-native security [platform].”
One interesting aspect of Aqua’s strategy is that it continues to bet on open source, too. Trivy, its open-source vulnerability scanner, is the default scanner for GitLab’s Harbor Registry and the CNCF’s Artifact Hub, for example.
“We are probably the best security open-source player there is because not only do we secure from vulnerable open source, we are also very active in the open-source community,” Davidoff said (with maybe a bit of hyperbole). “We provide tools to the community that are open source. To keep evolving, we have a whole open-source team. It’s part of the philosophy here that we want to be part of the community and it really helps us to understand it better and provide the right tools.”
In 2020, Aqua, which mostly focuses on mid-size and larger companies, doubled the number of paying customers and it now has more than half a dozen customers with an ARR of over $1 million each.
Davidoff tells me the company wasn’t actively looking for new funding. Its last funding round came together only a year ago, after all. But the team decided that it wanted to be able to double down on its current strategy and raise sooner than originally planned. ION had been interested in working with Aqua for a while, Davidoff told me, and while the company received other offers, the team decided to go ahead with ION as the lead investor (with all of Aqua’s existing investors also participating in this round).
“We want to grow from a product perspective, we want to grow from a go-to-market [perspective] and expand our geographical coverage — and we also want to be a little more acquisitive. That’s another direction we’re looking at because now we have the platform that allows us to do that. […] I feel we can take the company to great heights. That’s the plan. The market opportunity allows us to dream big.”
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In the same week that Amazon is holding its big AWS confab, Google is also announcing a move to raise its own enterprise game with Google Cloud. Today the company announced that it is acquiring Actifio, a data management company that helps companies with data continuity to be better prepared in the event of a security breach or other need for disaster recovery. The deal squares Google up as a competitor against the likes of Rubrik, another big player in data continuity.
The terms of the deal were not disclosed in the announcement; we’re looking and will update as we learn more. Notably, when the company was valued at over $1 billion in a funding round back in 2014, it had said it was preparing for an IPO (which never happened). PitchBook data estimated its value at $1.3 billion in 2018, but earlier this year it appeared to be raising money at about a 60% discount to its recent valuation, according to data provided to us by Prime Unicorn Index.
The company was also involved in a patent infringement suit against Rubrik, which it also filed earlier this year.
It had raised around $461 million, with investors including Andreessen Horowitz, TCV, Tiger, 83 North, and more.
With Actifio, Google is moving into what is one of the key investment areas for enterprises in recent years. The growth of increasingly sophisticated security breaches, coupled with stronger data protection regulation, has given a new priority to the task of holding and using business data more responsibly, and business continuity is a cornerstone of that.
Google describes the startup as as a “leader in backup and disaster recovery” providing virtual copies of data that can be managed and updated for storage, testing, and more. The fact that it covers data in a number of environments — including SAP HANA, Oracle, Microsoft SQL Server, PostgreSQL, and MySQL, virtual machines (VMs) in VMware, Hyper-V, physical servers, and of course Google Compute Engine — means that it also gives Google a strong play to work with companies in hybrid and multi-vendor environments rather than just all-Google shops.
“We know that customers have many options when it comes to cloud solutions, including backup and DR, and the acquisition of Actifio will help us to better serve enterprises as they deploy and manage business-critical workloads, including in hybrid scenarios,” writes Brad Calder, VP, engineering, in the blog post. :In addition, we are committed to supporting our backup and DR technology and channel partner ecosystem, providing customers with a variety of options so they can choose the solution that best fits their needs.”
The company will join Google Cloud.
“We’re excited to join Google Cloud and build on the success we’ve had as partners over the past four years,” said Ash Ashutosh, CEO at Actifio, in a statement. “Backup and recovery is essential to enterprise cloud adoption and, together with Google Cloud, we are well-positioned to serve the needs of data-driven customers across industries.”
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We may be in the thick of a pandemic with all of the economic fallout that comes from that, but certain aspects of technology don’t change, no matter the external factors. Storage is one of them. In fact, we are generating more digital stuff than ever, and Wasabi, a Boston-based startup that has figured out a way to drive down the cost of cloud storage, is benefiting from that.
Today it announced a $30 million Series B led led by Forestay Capital, the technology innovation arm of Waypoint Capital, with help from previous investors. As with the previous round, Wasabi is going with home office investors, rather than traditional venture capital firms. Today’s round brings the total raised to $110 million, according to the company.
While founder and CEO David Friend wouldn’t discuss the specific valuation, he did say it was in the hundreds of millions of dollars.
Friend says the company needs the funds to keep up with the rapid growth. “We’ve got about 15,000 customers today, hundreds of petabytes of storage, 2,500 channel partners, 250 technology partners — so we’ve been busy,” he said.
He says that revenue continues to grow in spite of the impact of COVID-19 on other parts of the economy. “Revenue grew 5x last year. It’ll probably grow 3.5x this year. We haven’t seen any real slowdown from the coronavirus. Quarter over quarter growth will be in excess of 40% — this quarter over Q1 — so it’s just continuing on a torrid pace,” he said.
The challenge for a company like Wasabi, which is looking to capture a large chunk of the growing cloud storage market, is the infrastructure piece. It needs to keep building more to meet increasing demand, while keeping costs down, which remains its primary value proposition with customers.
The money will be used mostly to continue to expand its growing infrastructure requirements. The more they store, the more data centers they need, and that takes money. It will also help the company expand into new markets where countries have data sovereignty laws that require data to be stored in-country.
The company launched in 2015. It previously raised $68 million in 2018.
Note: This article originally stated this was a debt financing round. The company has clarified that it is an equity round.
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Earlier today, DigitalOcean announced that it raised $50 million more from prior investors Access Industries and Andreessen Horowitz. The capital comes after the SMB and developer-focused cloud infrastructure company raised nine-figures worth of debt back in February.
DigitalOcean is a large private company that generated revenue at a run rate of around $250 million towards the end of 2019. The company announced today that it has reached $300 million in annual recurring revenue, or ARR. (We recently added the company to our ARR club here.) That’s growth of around 20% in less than half a year, though we don’t know precisely when the company reached the $250 million mark, making it hard to calculate its true growth pace.
Critically, DigitalOcean is walking toward profitability while expanding.
DigitalOcean’s CEO Yancey Spruill told TechCrunch earlier this year that his firm would reach free cash flow positivity in the next few years, a timeline that appears to have moved up (more on that shortly). Provided that the cloud company can keep its growth pace up over the same time period, it could be well positioned for an IPO.
The new $50 million values the company at $1.15 billion, meaning it was worth $1.1 billion pre-money. DigitalOcean is not being valued like a SaaS startup today in revenue multiple terms, then, though its new valuation is still nearly double its old Series B valuation (a company spokesperson confirmed the numbers on that page).
TechCrunch wanted to know why the company raised equity capital so quickly after it had added debt to its books. The capital was surely welcome given the world’s economic condition, but the timing was worth digging into.
DigitalOcean was not “seeking additional funding,” according to Spruill, but after “reviewing our business performance and outlook with our investors at Access and a16z, they were interested in investing for our next phase of growth.” The company accepted, Spruill said.
Presumably, Digital Ocean’s quick revenue growth from a $250 million run rate to $300 million ARR played a part in the investment decision. For DigitalOcean, receiving a new, higher valuation and a monetary top-off from well-known investors may even provide a brand boost (see this article, especially in light of recent coverage the firm has attracted).
Regarding its plans for the new capital, Spruill told TechCrunch that DigitalOcean can now “better support the increase in demand we’ve seen from entrepreneurs and SMBs around the world as more businesses are transitioning to the cloud, particularly as a result of COVID.” Mark DigitalOcean down as one of the world’s companies that is seeing an uptick from the pandemic; most aren’t, but the firms that are appear to be using the moment to put more capital onto their balance sheets.
TechCrunch also wanted to know if the new capital opened new ground for the firm, or if its priorities for the new capital were similar to its preceding goals. The CEO told TechCrunch that his firm’s focus is the same, namely expanding its business.
“We remain committed to reaching $1 billion in revenue, achieving free cash flow profitability in the second half of this year and, ultimately, position DigitalOcean to be a public company,” Spruill said in an email.
That’s clear enough.
By that measure we can expect to see a DigitalOcean S-1 in the first half of 2021, if markets recover. So a16z and Access Industries (longtime investors in the company) could see a quick return for their most recent checks if current plans hold up.
The company’s release made note of “accelerating growth,” which TechCrunch wanted to know more about. How quickly is the company growing? Spruill didn’t share numbers to confirm or deny our rough math based on his firm’s public revenue milestones, but did tell TechCrunch that the company is “actively working on a number of initiatives to accelerate our revenue growth rate,” adding that these are internally dubbed “Grow Faster” initiatives.
Finally, TechCrunch was curious about the impact that COVID-19 is having on DigitalOcean. The company told us that it has “seen a modest increase in churn as a result of COVID-19,” but nothing too bad, saying that the change was “not significant” when “compared with recent trends immediately prior to the pandemic.”
On the positive side of the ledger, DigitalOcean said that its “sign up of new customers has been accelerating” and that it is seeing “increased business from some existing customers.” Adding that up for the SaaS kids: A little bit more churn, good new logo addition, and some upsell tailwinds. Overall that adds up to growth.
More when we have it, but now we’re at least set up to understand what the company does next.
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