Former Citrix chief Mark Templeton takes over at cloud start-up DigitalOcean

Key Points
  • Mark Templeton, who was Citrix's CEO from 2001 to 2015, is taking the reins.
  • DigitalOcean cofounder Ben Uretsky will stay on the board.
  • The start-up has a $200 million annualized revenue run rate.
Incoming DigitalOcean CEO Mark Templeton, left, and DigitalOcean cofounder Ben Uretsky.
Source: Zach Dilgard/DigitalOcean

Former Citrix CEO Mark Templeton has a new job. He's taking over as chief of DigitalOcean, a trendy start-up that prioritizes developers and teams as it offers cloud infrastructure for hosting applications.

DigitalOcean offers low-cost competition to big cloud providers like Amazon, Microsoft and Google for the basic tasks that were the original appeal of cloud computing, like remotely running computing tasks and storing data. As companies become more comfortable relying on third-party providers to run their applications, the market is expanding, leaving some room for small players like DigitalOcean.

The company was founded in 2011, and its core market is developers who build things and don't want to futz around with the complexity that you can run into when you use the big guys. It also has a community of 3.5 million developers, including some customers and some more casual users who look at documentation and other content on its web site.

But along the way, it's racked up business customers, such as group video chat app Houseparty and managed hosting company Cloudways, and three-quarters of its revenue now comes from businesses, says cofounder and outgoing CEO Ben Uretsky. The company now has an annualized revenue run rate in excess of $200 million, Uretsky said.

Templeton, who left Citrix in 2015, grew it over his 14-year tenure into a business software figurehead with more than $3.2 billion in annual revenue.

But even though Templeton has experience with landing big enterprise customers, he's personally excited about helping DigitalOcean broaden its appeal for small customers, some of which turn into larger ones.

"We're a small size of the cloud computing infrastructure pie -- and our opportunity is actually to be one of the core growers of the pie, which is about primary demand," Templeton said in an interview with CNBC at the start-up's New York headquarters on Wednesday.

Templeton said he doesn't envision DigitalOcean becoming more competitive with Amazon and the other big cloud providers -- precisely because it's not looking to go searching for enterprise business.

"They don't have to lose for us to win, especially in a market where the pie is growing so fast overall," Templeton said.

Under Templeton, Citrix acquired several companies, including Bytemobile, NetScaler and XenSource. Now he's looking to build a corporate development team at DigitalOcean. The start-up could potentially build up its technology offerings by acquiring companies with tools for artificial intelligence, augmented reality and "serverless" computing, Templeton said.

"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 investor Andreessen Horowitz, which led 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."

Uretsky won't be involved in day-to-day operations but will stay on as a member of the start-up's board.

"I think the business had scaled to tremendous heights, and we were starting to think about the future, and it looked like we were seriously considering what a path toward a public company would look like," Uretsky said. "I would have to make a key decision there -- if I am the person to really take the business in that direction and operate it as a potentially public company. I just felt that wasn't really [among] the personal goals that I had."

DigitalOcean has raised more than $123 million in funding, and two years ago it took out a $130 million credit line to help cover the cost of data center infrastructure. Alongside Andreessen Horowitz, other investors include Access Industries, CrunchFund and IA Ventures.

Cloud wars heat up: DigitalOcean goes up against Amazon
Cloud wars heat up: DigitalOcean goes up against Amazon