Breaking cloud complexity with a developer-first approach with Paddy Srinivasan @Digital Ocean

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/, a serial acquirer of B2B SaaS companies.

In episode #11 of season 5 of the saas.unbound podcast, Anna Nadeina sits down with Paddy Srinivasan, CEO of Digital Ocean, to explore how the cloud infrastructure giant is simplifying cloud computing for developers and embracing the transformative power of AI. Digital Ocean, known for its developer-focused public cloud, is carving a unique niche amid hyperscalers like AWS, Google Cloud, and Azure by combining simplicity, scalability, and transparency.

From Microsoft to Digital Ocean: Paddy’s Journey

Paddy Srinivasan’s career spans over two decades of deep involvement in software development and cloud technologies. Starting as an electrical engineer, he honed his expertise at Microsoft through a decade-long tenure working across operating systems, developer tools, and office platforms. He later contributed to Oracle’s embedded databases and launched his own startup during the early cloud era, focusing on cloud deployment monitoring.

Before joining Digital Ocean as CEO just over a year ago, Paddy spent nearly a decade at LogMeIn, helping the company grow from around $100 million in revenue to $1.4 billion through strategic acquisitions and transformations. His leadership experience brings a unique perspective to Digital Ocean’s mission of scaling and simplifying cloud infrastructure for developers worldwide.

Digital Ocean’s Mission and Scale

Digital Ocean stands as the third largest public cloud by customer count and the fifth largest by revenue, with over $800 million in annual revenue. The company went public four years ago and today supports more than 3 million active professional developers globally — representing over 12% of the world’s professional developer population.

This remarkable penetration highlights Digital Ocean’s role as a trusted platform where many developers learn new technologies and deploy applications for the first time. Paddy’s mandate as CEO is to scale the company further while maintaining a strong focus on customer needs and accessibility.

Addressing Cloud Complexity and Cost

When asked about the growing concerns over cloud expenses, such as those raised by the team at Basecamp, Paddy emphasized that Digital Ocean’s core value proposition directly tackles these challenges. He identifies two extremes of customers who might leave the cloud: highly technical startups capable of running their own infrastructure, and massive enterprises with vast developer resources. However, the majority of companies fall in between and rely on cloud providers like Digital Ocean.

Digital Ocean’s differentiators include:

• Simplicity: Despite offering over 50 services — from compute and storage to serverless and managed databases — Digital Ocean packages resources in developer-friendly units like “droplets” that bundle CPU, storage, and bandwidth for quick deployment.
• Scalability: With 17 global data centers and customers in 190 countries, Digital Ocean is a global cloud provider capable of supporting growing businesses.
• Approachability and Transparency: Digital Ocean offers predictable, transparent pricing that typically saves customers 30-50% on their cloud bill, without the complexity or vendor lock-in common in hyperscale clouds.

Moreover, Digital Ocean is a staunch supporter of open source technologies, fostering a bi-directional ecosystem where customers can freely move workloads and innovate without being trapped in proprietary “walled gardens.”

Democratizing AI: Digital Ocean’s Vision

Paddy describes AI today as a playground primarily accessible to the “rich and funded” due to the high costs and complexity of training and deploying large language models (LLMs). Only a handful of companies train these massive models, but the vast majority of businesses need to use AI through inferencing — consuming AI-powered services to enhance their applications.

Digital Ocean is positioning itself as an “inferencing cloud” that provides the necessary GPU infrastructure, platform APIs, and AI-enabled agents to democratize AI usage. Their three-layer AI strategy includes:

1. Infrastructure: GPU-powered cloud services supporting inferencing workloads.
2. Platform: Serverless APIs hosting open-source LLMs for easy integration into applications.
3. Agents: Ready-to-use AI-enabled workflows that automate complex tasks like site reliability engineering.

This approach enables SaaS companies and developers to build AI-powered features without managing complex infrastructure, paying only for what they use via token-based pricing.

AI’s Role in Digital Ocean’s Product and Customer Strategy

For Digital Ocean, AI is not just a buzzword but a transformative force that will reshape workflows across industries. Paddy predicts a two-wave adoption:

• Wave One: Existing applications augmenting their features with AI capabilities.
• Wave Two: Emergence of AI-native applications that fundamentally rethink user experience, data handling, and automation.

Digital Ocean encourages companies to identify human workflows that can be automated or enhanced by AI, shifting from primarily human-driven processes to AI-driven ones with humans in the loop for oversight and reasoning.

Fostering Innovation Through Hackathons and Open Source

Digital Ocean cultivates a culture of innovation through internal hackathons and active participation in open-source communities. One notable example is Hacktoberfest, the world’s largest open-source hackathon, founded and hosted by Digital Ocean, which attracted over 65,000 developers last year.

Internally, hackathons have sparked practical AI innovations like an AI-powered Site Reliability Engineering (SRE) agent that proactively analyzes logs from various sources to detect and resolve issues before incidents occur. This tool is currently in public beta and receiving enthusiastic customer feedback.

Embracing Open Source AI Models: The DeepSeek Example

Digital Ocean was quick to support the open-source DeepSeek model shortly after its release, recognizing its potential to drastically reduce the cost of AI adoption for customers. Hosting such models aligns with Digital Ocean’s commitment to data privacy and customer ownership, as customer data remains on their infrastructure.

Paddy stresses that open-source innovations are critical to lowering AI costs and accelerating widespread adoption, enabling more companies to build and deploy AI-powered applications affordably.

Balancing Innovation with AI Risks

While acknowledging the ethical, privacy, bias, and societal risks associated with AI, Paddy advocates for a balanced approach that allows innovation to flourish without premature restrictions. Drawing parallels to the advent of the internet and mobile phones, he emphasizes the importance of sequencing, encouraging responsible innovation while studying and regulating risks thoughtfully over time.

Beyond AI: The Core Cloud Opportunity

Although AI currently dominates the tech conversation, Digital Ocean remains deeply committed to advancing its core cloud offerings. The company is experiencing accelerated growth driven by digital-native enterprises frustrated with the complexity and cost of hyperscale clouds. Digital Ocean’s simpler, more developer-friendly cloud experience is resonating strongly with this audience.

Reflections: Wins, Challenges, and Leadership Hacks

Reflecting on the past year, Paddy identifies a key leadership challenge and achievement: reorienting decision-making processes to be closer to customers. By engaging directly with customers and empowering frontline employees, Digital Ocean has improved its strategic focus, which is already reflected in improved financial metrics.

On a personal productivity note, Paddy shares a simple but powerful hack — being meticulous about time management by setting clear monthly and weekly priorities and guarding his calendar against distractions. This discipline helps him focus on what truly matters amid the demands of leading a large public company.