Last week, DigitalOcean ($DOCN) announced a 15%–20% price hike on several of its pricing tiers.
The cloud storage and computing company is increasing fees for the very first time, and the move is a tacit admission that its client base has evolved from individual programmers to small and medium-sized businesses in the past few years.
As a cloud service provider, DigitalOcean has a considerable amount of ongoing investment in digital infrastructure. The price increase helps to protect the firm from growing personnel expenses and component prices. A lower-cost "Droplet" (virtual server) from DigitalOcean, aimed at small enterprises and novice developers just starting out, will be available for $4 per month instead of the current $5 per month entry-level server (which will rise to $6 per month when the new pricing schedule takes effect in July).
On DigitalOcean's site, developers may find free tools, information, and lessons that have cost the company hundreds of millions of dollars in profit over the years. You may count on some of the company's least loyal consumers to defect in the coming quarters.
However, management is certain that the vast majority of customers will be able to handle the increase without it impacting retention rations, and so far, the market agrees with them. The first indication of whether this price strategy was a success or a failure will come from monitoring customer data in the coming quarters.