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While other information technology (IT) firms have been sitting idle because of the low demand from enterprises which have cut services to practice thrift, domain name registration service providers can still prosper.
Domain name registration service is described as the type of business which lives on the “small change” “gleaned” from clients, because it is just very small segment of the IT service market. Every year, a company can collect 2 million dong at maximum from every enterprise as the fee for domain name maintenance. However, the “small-time” service is now feeding a lot of companies.
Many cents make dollars
According to the Vietnam Internet Center, in the first three months of the year, up to 22,000 new domain names were registered, an increase of 22 percent in comparison with the same period of the last year.
Le Hai Binh, General Director of Mat Bao (stormeye), the domain name and website registration service provider, said his company’s turnover was 120 billion dong in 2011, an increase of 38 percent over 2010.
Mat Bao plans to see the 35 percent growth rate in turnover in 2012. With the satisfactory business performance so far this year, Binh is sure that the yearly business plan would be fulfilled.
Though declining to give detailed figures, the representative from VDC region 2 said the market segment brought high turnover in the first four months of the year, up by 20 percent over the same period of the last year.
Pham Thi Kim Anh, Marketing Director of PA Vietnam, said the firm has still been leading the market in terms of the number of new domain names registered and the number of existing domain names.
Binh admitted that domain name registration, hosting, email and data storage services are just the very small market segments in the IT service market. At present, the domain name registration fee is just 1.5 dollars, or 30,000 dong, while the fee for maintaining the domain name is nearly the same. As such, if counting on the hosting fee, a business or individual would have to pay 2 million dong at maximum a year to maintain his domain name.
Two million dong is a small sum of money. Therefore, no business intends to cut the expense item. “The petty business now proves to be our advantage in the context of the economic downturn. While businesses try to cut down many other kinds of expenses, they would not tend to cut down the expense to maintain domain names,” Binh explained.
Both VDC and PA Vietnam said they have suffered a little when many small and medium enterprises went bankrupted or stopped operation. However, Binh believes that the number of eliminated domain names or websites is very modest.
He said that businesses’ owners always want to retain the domain names in case the companies resume their operation in the future; therefore, they would pay fee, which is just a small sum, to retain the domain names.
Meanwhile, clients register new domain names and websites every day, when businesses launch new products to the market or change their brand names.
With the 220,000 Vietnamese domain names in use, the turnover IT firms collects would not be small. Besides, there are 300,000 international domain names registered by domestic enterprises.
IT firms can also earn money from providing services on servers. With the high demand for popularizing products and boosting online sales, enterprises now have to use the services on providers’ servers in order to have more storage capacity. Of course, they would have to pay higher fee for the services.
Mat Bao got the turnover of 150 million dong only in 2002, when it began operation. Meanwhile, the figure has increased by 1000 times.
Source: DDDN/ VNN
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