Salesforce Halts Development on Heroku PaaS Platform
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10 hours ago
0mins
Should l Buy DOCN?
Source: NASDAQ.COM
- Heroku Development Halted: Salesforce has announced the cessation of development on its popular PaaS platform, Heroku, which will continue to operate but without new features, likely forcing customers to seek alternative providers and potentially leading to customer attrition.
- Increased Market Competition: DigitalOcean's App Platform is seen as a primary alternative for Heroku customers, quickly releasing a migration guide and offering three months of free service to attract users, capitalizing on the opportunity presented by Salesforce's decision.
- Accelerating Revenue Growth: DigitalOcean reported a 16% year-over-year revenue increase in Q3, raising its 2025 outlook due to a doubling of AI revenue, with revenue from customers spending over $100,000 annually soaring by 41%, indicating its growing popularity among larger clients.
- Strategic Shift Impact: Salesforce's pivot towards AI products like Agentforce may explain the halt in Heroku development, while DigitalOcean offers a more comprehensive solution by combining IaaS and PaaS services, expected to attract more Heroku customers in 2026 and further drive revenue growth.
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Analyst Views on DOCN
Wall Street analysts forecast DOCN stock price to fall
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 67.660
Low
50.00
Averages
63.60
High
72.00
Current: 67.660
Low
50.00
Averages
63.60
High
72.00
About DOCN
DigitalOcean Holdings, Inc. provides the simplest scalable cloud platform that democratizes cloud and AI for growing tech companies around the world. It provides a cloud computing platform, offering simple, scalable and approachable on-demand infrastructure and platform services for developers at growing technology companies. Its platform simplifies cloud computing, enabling its customers to rapidly accelerate innovation and productivity. The simplicity of its platform allows users to focus on building and scaling their business instead of on managing their infrastructure. It offers mission-critical solutions across Infrastructure-as-a-Service (IaaS), including its Droplet virtual machines, storage and networking offerings; Platform-as-a-Service and Software-as-a-Service, including its Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings; and artificial intelligence and machine learning, including its GPU Droplets, Notebooks and GenAI Platform offerings.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Salesforce's Shift Impacts Heroku Users
- Heroku Strategic Shift: On February 6, Salesforce announced that Heroku would adopt a 'sustaining engineering model,' meaning while the platform will still receive support, no new features will be developed, significantly diminishing its market competitiveness and likely leading to customer attrition.
- Customer Migration Opportunity: DigitalOcean quickly published a migration guide to assist Heroku users in transitioning to its App Platform, offering three months of free service, indicating a strong appeal to Heroku customers that could accelerate its revenue growth.
- Accelerating Revenue Growth: DigitalOcean reported a 16% year-over-year revenue increase in Q3 and raised its 2025 outlook due to a doubling of AI revenue, indicating a significant rise in popularity among larger clients, with revenue from those spending over $100,000 annually soaring by 41%.
- Intensifying Market Competition: As Salesforce pivots towards AI products, Heroku users may migrate to various cloud platforms, with DigitalOcean's App Platform providing similar convenience to Heroku, potentially leading to accelerated revenue growth in 2026.
See More
Salesforce Halts Development on Heroku PaaS Platform
- Heroku Development Halted: Salesforce has announced the cessation of development on its popular PaaS platform, Heroku, which will continue to operate but without new features, likely forcing customers to seek alternative providers and potentially leading to customer attrition.
- Increased Market Competition: DigitalOcean's App Platform is seen as a primary alternative for Heroku customers, quickly releasing a migration guide and offering three months of free service to attract users, capitalizing on the opportunity presented by Salesforce's decision.
- Accelerating Revenue Growth: DigitalOcean reported a 16% year-over-year revenue increase in Q3, raising its 2025 outlook due to a doubling of AI revenue, with revenue from customers spending over $100,000 annually soaring by 41%, indicating its growing popularity among larger clients.
- Strategic Shift Impact: Salesforce's pivot towards AI products like Agentforce may explain the halt in Heroku development, while DigitalOcean offers a more comprehensive solution by combining IaaS and PaaS services, expected to attract more Heroku customers in 2026 and further drive revenue growth.
See More
DigitalOcean's AI Revenue Doubles Again, Driving Growth
- AI Revenue Doubling: DigitalOcean's AI revenue has doubled in each of the last five reported quarters, with management guidance suggesting another doubling in Q4 2025, indicating strong growth potential in the AI sector that could serve as a major catalyst for stock price increases.
- Accelerated Revenue Growth: The company generated $659 million in total revenue during the first three quarters of 2025, reflecting a 14.5% year-over-year increase, which is an acceleration from the 12.4% growth seen in the same period of 2024, highlighting the positive impact of its AI business on overall performance.
- Operational Efficiency Improvement: DigitalOcean managed to double its operating income to $118.2 million in the first three quarters of 2025 while simultaneously reducing operating expenses, demonstrating effective cost control alongside its expanding AI product portfolio.
- Attractive Market Valuation: Despite a 41% stock price increase in 2025 and an additional 27% rise in early 2026, DigitalOcean's price-to-sales ratio stands at 7.2, below its average of 8.1 since going public in 2021, indicating it remains attractively valued compared to larger industry players.
See More
DigitalOcean's AI Revenue Doubles, Strong Outlook Ahead
- AI Revenue Growth: DigitalOcean generated $659 million in total revenue during the first three quarters of 2025, marking a 14.5% year-over-year increase, with AI revenue doubling each year over the last five quarters, indicating strong growth momentum expected to continue into Q4.
- Support for Small Businesses: By focusing on small and mid-sized businesses, DigitalOcean offers personalized service and transparent pricing, making its AI services more affordable; 53% of SMBs using AI agents reported significant time savings, while 44% unlocked entirely new business capabilities.
- Significant Cost Advantage: DigitalOcean claims its AI services are 75% cheaper than those of larger cloud providers, and through its Gradient platform, customers can easily access the latest large language models, further accelerating AI software development.
- Operational Efficiency Improvement: While growing revenue, DigitalOcean successfully reduced operating expenses in the first three quarters of 2025, doubling its operating income to $118.2 million, demonstrating effective cost management alongside the expansion of its AI product portfolio.
See More
DigitalOcean's AI Revenue Continues to Surge
- AI Revenue Doubling: DigitalOcean's AI revenue has doubled in each of the last five reported quarters, with expectations for continued growth in Q4 2025, indicating strong potential for significant contributions to overall business performance.
- Accelerating Revenue Growth: The company generated $659 million in total revenue during the first three quarters of 2025, reflecting a 14.5% year-over-year increase, which is an acceleration from the 12.4% growth in the same period of 2024, highlighting the increasing impact of its AI business on overall revenue.
- Cost Control and Profitability: DigitalOcean managed to reduce operating expenses while expanding its AI product portfolio, resulting in a doubling of operating income to $118.2 million for the first three quarters of 2025, showcasing effective cost management alongside growth initiatives.
- Market Appeal Remains Strong: Despite a 41% stock price increase in 2025 and an additional 27% rise in early 2026, DigitalOcean's price-to-sales ratio stands at 7.2, below its historical average, suggesting that the stock remains attractive and poised for further upside potential.
See More
DigitalOcean Shows Strong Growth Potential Amid AI Boom
- Revenue Growth Expectations: DigitalOcean is projected to report nearly $900 million in revenue for 2025, reflecting a 15% year-over-year increase, indicating a solid market position in the rapidly growing AI data center sector, even though its growth rate may not match Nebius, its stability is more appealing.
- High Customer Retention: The company's net dollar retention rate stands at 99%, suggesting that once customers become paying users, they are almost guaranteed to continue using its services, thereby providing a stable revenue stream and long-term customer relationships.
- Strong Profitability: DigitalOcean's EBITDA profit margin is around 40%, demonstrating a good balance between spending and revenue, which instills confidence in investors despite competitive pressures in the AI market, ensuring profitability.
- Clear Market Positioning: DigitalOcean focuses on providing scalable AI solutions for smaller customers, allowing them to test its technology at a low cost of $50 per month, which has attracted 640,000 paying customers, showcasing its competitive advantage in the niche market.
See More
Salesforce's Shift Impacts Heroku Users
- Heroku Strategic Shift: On February 6, Salesforce announced that Heroku would adopt a 'sustaining engineering model,' meaning while the platform will still receive support, no new features will be developed, significantly diminishing its market competitiveness and likely leading to customer attrition.
- Customer Migration Opportunity: DigitalOcean quickly published a migration guide to assist Heroku users in transitioning to its App Platform, offering three months of free service, indicating a strong appeal to Heroku customers that could accelerate its revenue growth.
- Accelerating Revenue Growth: DigitalOcean reported a 16% year-over-year revenue increase in Q3 and raised its 2025 outlook due to a doubling of AI revenue, indicating a significant rise in popularity among larger clients, with revenue from those spending over $100,000 annually soaring by 41%.
- Intensifying Market Competition: As Salesforce pivots towards AI products, Heroku users may migrate to various cloud platforms, with DigitalOcean's App Platform providing similar convenience to Heroku, potentially leading to accelerated revenue growth in 2026.
See More
Salesforce Halts Development on Heroku PaaS Platform
- Heroku Development Halted: Salesforce has announced the cessation of development on its popular PaaS platform, Heroku, which will continue to operate but without new features, likely forcing customers to seek alternative providers and potentially leading to customer attrition.
- Increased Market Competition: DigitalOcean's App Platform is seen as a primary alternative for Heroku customers, quickly releasing a migration guide and offering three months of free service to attract users, capitalizing on the opportunity presented by Salesforce's decision.
- Accelerating Revenue Growth: DigitalOcean reported a 16% year-over-year revenue increase in Q3, raising its 2025 outlook due to a doubling of AI revenue, with revenue from customers spending over $100,000 annually soaring by 41%, indicating its growing popularity among larger clients.
- Strategic Shift Impact: Salesforce's pivot towards AI products like Agentforce may explain the halt in Heroku development, while DigitalOcean offers a more comprehensive solution by combining IaaS and PaaS services, expected to attract more Heroku customers in 2026 and further drive revenue growth.
See More
DigitalOcean's AI Revenue Doubles Again, Driving Growth
- AI Revenue Doubling: DigitalOcean's AI revenue has doubled in each of the last five reported quarters, with management guidance suggesting another doubling in Q4 2025, indicating strong growth potential in the AI sector that could serve as a major catalyst for stock price increases.
- Accelerated Revenue Growth: The company generated $659 million in total revenue during the first three quarters of 2025, reflecting a 14.5% year-over-year increase, which is an acceleration from the 12.4% growth seen in the same period of 2024, highlighting the positive impact of its AI business on overall performance.
- Operational Efficiency Improvement: DigitalOcean managed to double its operating income to $118.2 million in the first three quarters of 2025 while simultaneously reducing operating expenses, demonstrating effective cost control alongside its expanding AI product portfolio.
- Attractive Market Valuation: Despite a 41% stock price increase in 2025 and an additional 27% rise in early 2026, DigitalOcean's price-to-sales ratio stands at 7.2, below its average of 8.1 since going public in 2021, indicating it remains attractively valued compared to larger industry players.
See More
DigitalOcean's AI Revenue Doubles, Strong Outlook Ahead
- AI Revenue Growth: DigitalOcean generated $659 million in total revenue during the first three quarters of 2025, marking a 14.5% year-over-year increase, with AI revenue doubling each year over the last five quarters, indicating strong growth momentum expected to continue into Q4.
- Support for Small Businesses: By focusing on small and mid-sized businesses, DigitalOcean offers personalized service and transparent pricing, making its AI services more affordable; 53% of SMBs using AI agents reported significant time savings, while 44% unlocked entirely new business capabilities.
- Significant Cost Advantage: DigitalOcean claims its AI services are 75% cheaper than those of larger cloud providers, and through its Gradient platform, customers can easily access the latest large language models, further accelerating AI software development.
- Operational Efficiency Improvement: While growing revenue, DigitalOcean successfully reduced operating expenses in the first three quarters of 2025, doubling its operating income to $118.2 million, demonstrating effective cost management alongside the expansion of its AI product portfolio.
See More
DigitalOcean's AI Revenue Continues to Surge
- AI Revenue Doubling: DigitalOcean's AI revenue has doubled in each of the last five reported quarters, with expectations for continued growth in Q4 2025, indicating strong potential for significant contributions to overall business performance.
- Accelerating Revenue Growth: The company generated $659 million in total revenue during the first three quarters of 2025, reflecting a 14.5% year-over-year increase, which is an acceleration from the 12.4% growth in the same period of 2024, highlighting the increasing impact of its AI business on overall revenue.
- Cost Control and Profitability: DigitalOcean managed to reduce operating expenses while expanding its AI product portfolio, resulting in a doubling of operating income to $118.2 million for the first three quarters of 2025, showcasing effective cost management alongside growth initiatives.
- Market Appeal Remains Strong: Despite a 41% stock price increase in 2025 and an additional 27% rise in early 2026, DigitalOcean's price-to-sales ratio stands at 7.2, below its historical average, suggesting that the stock remains attractive and poised for further upside potential.
See More
DigitalOcean Shows Strong Growth Potential Amid AI Boom
- Revenue Growth Expectations: DigitalOcean is projected to report nearly $900 million in revenue for 2025, reflecting a 15% year-over-year increase, indicating a solid market position in the rapidly growing AI data center sector, even though its growth rate may not match Nebius, its stability is more appealing.
- High Customer Retention: The company's net dollar retention rate stands at 99%, suggesting that once customers become paying users, they are almost guaranteed to continue using its services, thereby providing a stable revenue stream and long-term customer relationships.
- Strong Profitability: DigitalOcean's EBITDA profit margin is around 40%, demonstrating a good balance between spending and revenue, which instills confidence in investors despite competitive pressures in the AI market, ensuring profitability.
- Clear Market Positioning: DigitalOcean focuses on providing scalable AI solutions for smaller customers, allowing them to test its technology at a low cost of $50 per month, which has attracted 640,000 paying customers, showcasing its competitive advantage in the niche market.
See More
