The company claims that users can set up a droplet, or resize it to another pricing tier, in less than a minute. It offers virtual machine images running basic versions of either the Ubuntu, Debian, CentOS, Arch or Fedora Linux distributions.
The company is using a number of new technologies for competitive performance, including SSDs (solid state drives), which can boost I/O performance. For virtualization, DigitalOcean uses Red Hat's KVM hypervisor.
Just as Microsoft is doing with its Windows Azure service, DigitalOcean is initially pursuing the market of developers who need modestly priced machines to develop and test code.
Wainer points to the rapidly growing user base of GitHub, an online source-code repository, as proof of the potential size of the developer market. Founded in 2008, GitHub now hosts 7.7 million repositories from 3.3 million users.
"You can see from that market size alone, that this is a billion-dollar market opportunity," Wainer said.
While DigitalOcean has been courting the developer market, it is also suited for startup businesses as well, Wainer said. For instance, one startup using DigitalOcean is the RSS reader service NewsBlur, which has accrued a significant user base after Google shut down its own RSS reader.
Not that the company hasn't had a few bumps. Last month, one user found that the service was using identical SSH fingerprints for multiple Ubuntu droplets generated within a single account, which was a significant security vulnerability. The company has since fixed the problem.
"That's one of the things about being a startup -- you can't be perfect from the get-go," Wainer said, though adding, "Whenever there is an issue, we've been responsive."
DigitalOcean, which is based in New York City, now has 30 employees, though it is looking to hire network engineers and Linux system administrators. It is also expecting to get a significant investment from an outside party shortly, which will be used "to drive new features and acquire capacity in additional regions," Wainer said.
The company is planning to offer virtual private networking and object storage, similar to Amazon's Simple Storage Service (S3). It will also broaden its array of off-the-shelf virtual machines, including those with WordPress or other popular applications installed and ready for use.
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