Does DigitalOcean Plan On Acquiring Instart Logic


Few days ago, DigitalOcean, a cloud computing platform for hosting applications that prioritizes developers and their teams, named a new CEO in Mark Templeton. Templeton will officially start at the company on July 1, 2018. He will also join the company’s board of directors.

“When we first founded DigitalOcean, we did so with a single focus: to make the lives of developers easier,” said Ben Uretsky, founding CEO, DigitalOcean in a press release. “With this vision, we’ve become one of the largest and fastest-growing cloud providers in the world, with a $200 million run rate and a community that is more than 3.5 million developers strong. As we enter into our next chapter, I am confident Mark is the right leader to inspire and scale our team, accelerate and grow our business, and most importantly, uphold our commitment to our customers and the developer community at large.”

DigitalOcean was founded in 2012 by Ben Uretsky and a team of four others, including Ben’s brother, Moisey Uretsky. Ben Uretsky will stay on the board of directors. The trendy infrastructure provider is headquartered in New York with an additional office in Cambridge, Mass., and remote employees based worldwide. It has 12 datacenter locations around the globe. It has previously raised $123 million in financing from Andreessen Horowitz, Access Industries, IA Ventures, CrunchFund, and Techstars. The primary focus of its cloud platform is simplicity and flexibility to make managing infrastructure and the running of production applications as easy as possible, regardless of scale.

DigitalOcean’s community of 3.5 million developers includes both customers and casual users who browse the site’s extensive content and documentation. Since its founding, it has also gained larger business customers (from which it now derives three-quarters of its annual revenue), including managed hosting company Cloudways and video chat app Houseparty. DigitalOcean essentially offers low-cost competition to the big cloud providers like AWS and Google for the cloud’s foundational tasks, such as storing data and remotely running computing tasks. The market for smaller third-party providers like DigitalOcean is growing as the tech industry becomes more comfortable relying on them to run applications and the market expands.

New CEO, Mark Templeton, arrives from Citrix Systems, where he was president and CEO. Citrix’s focus is on providing cloud computing technologies, in addition to software as a service (SaaS), networking and server, application and desktop virtualization. Templeton joined Citrix prior to its IPO back in 2001 and was at the company for 14 years until 2015. Over that time, he grew it from a $15 million organization with just one product, one customer segment and one go-to-market path into a business software figurehead with over $3.2 billion in annual revenue and over 100 million users.

“Ben and his team have carved out a unique position in the $153.5 billion public cloud services market by delivering the industry’s simplest cloud computing platform and building one of the world’s largest developer communities,” said Templeton, incoming CEO, DigitalOcean. “I am inspired by the team’s passion and innovative culture, and by the enthusiasm of the developers and teams who rely on DigitalOcean’s products. It is an honor to join DigitalOcean as CEO to help lead the company during this next phase of growth.”

Uretsky told CNBC that he was bowing out so that the company could seriously consider “what a path toward a public company would look like” as he didn’t feel it was one of his own personal goals. This is precisely Templeton’s expertise. He is a mentor to other CEOs and an early-stage investor in a range of new tech areas. He serves on the board of directors for Equifax, Keysight Technologies and Arista Networks and is chairman of the board of both Adaptive Insights and Instart Logic.

Templeton has already displayed an appetite for broadening the appeal of DigitalOcean for small customers that in time might turn into larger ones. Hence our question, does DigitalOcean plan on acquiring Instart Logic?

Citrix completed multiple acquisitions under Templeton, including Bytemobile, NetScaler and XenSource. He has already made it clear that he wants to build a corporate development team at DigitalOcean, telling CNBC that the startup could easily supplement its existing offerings by acquiring companies with tools for AI, augmented reality and serverless computing.

If he does so, financing does not look as if it would be hard to come by. “I can point to Mark’s incredible success record at Citrix in doing M&A work with a variety of companies that have turned out to be hugely successful,” said Peter Levine, a partner at Andreessen Horowitz, which ran a $37.2 million investment round in 2014. “If Mark Templeton comes up with a strategy and articulates a reason to do an M&A transaction, the funds will be there for him to be able to go do that.”

Instart Logic is a digital experience management company with a unique cloud platform that uses AI and machine learning to automatically and continuously optimize and secure every object and every page across multiple web and mobile applications for every kind of device. Instart promises 30% faster application performance to its customers, making applications and products look better, leading to higher conversion rates, greater SEO traffic, lower pay per click costs and higher net promoter scores. Its clients include Office Depot, and Commune Hotels. Its CEO is high-flyer Sumit Dhawan who himself has led multiple $1B+ enterprise software and SaaS businesses, and has proven expertise in creating new market categories.

Templeton was only named chairman of the board at Instart Logic in April 2018. On joining, he described his reasoning for coming on board. “Instart has no equal for helping global brands accelerate their revenue growth and delight their customers. Every company needs to master digital experience excellence to drive brand engagement and increase revenue,” said Templeton. “The success of Instart’s customers, plus the quality of the company’s technology, culture, founders, investors, and executives, were critical to my decision to join the board as chairman. I’m excited to work with the board and leadership team to achieve the full potential for all stakeholders.”

And interestingly, Instart Logic’s investors number among them Andreessen Horowtiz… another intriguing connection to DigitalOcean?

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