The DigitalOcean cloud platform has increased its service fees.

Last week, DigitalOcean Holdings Inc. (DOCN), a supplier of cloud ecosystem services, announced a pricing rise. Wall Street analysts praised the initiative, saying it would have just a little impact on the company’s client base but result in big financial gains. Prices for DigitalOcean’s services will rise by 20% on July 1st, according to the company. It’s important to emphasize that this is the company’s first price hike, and it only seems to be so large on the surface.

Many of the company’s services are reasonably priced; for example, a basic virtual server costs $5 per month. As a result, investors and Wall Street experts predict the rise will not result in a significant consumer loss. DigitalOcean’s move to change its pricing approach was particularly well received by Oppenheimer analysts. The company reiterated its earlier recommendation for shares, which was “better than the market” with a target price of $80. Oppenheimer says that when there is inflation, a company with the best pricing power will do well because it will use the money it makes to improve service.

Analysts also increased sales growth predictions for the firm for 2022–2023, but did not disclose exact amounts. Morgan Stanley agrees with DigitalOcean’s pricing hike decision. Analysts kept the “above market” rating and the $61 target price because they thought that if the price went up, the average revenue per user (ARPU), revenue, and gross profit would all go up.

DigitalOcean provides a broad ecosystem for cloud and other IT infrastructure developers. Among other things, the company offers cloud transformation services, website hosting, video services, solutions for making video games and mobile apps, and cloud infrastructure for startups.