It has been suggested to me that the statement I quoted in my last post was taken out of context and did not accurately reflect the meaning of the author. For that I apologize. I would like to set the record straight (and hope I do not make things any worse by doing so).
Previously, in correspondence with Peter Etjel of Tucows, I attempted to make the point that when Verisign's Secondary Market Program goes live, a lot of registrants may transfer their domain name registrations to registrars participating in the program in the hopes of selling their domains. (I don't want to spend time on the specifics of the program, other than to say it is a registry-level system that allows domain name registrants to list their names for sale in such a way as to be visible and available to potential registrants when they try to register a domain name. If you want to know about it, go to www.verisign-grs.com.) Anyway, I don't know if the program will be successful or not, but I do know that a large percentage of registered domain names are not being used productively, and are being held for investment purposes. It is conceivable to me that when a method becomes available to offer domain names for sale to potential registrants at the point of registration, a lot of registrants may suddenly become interested. The catch here is that you can only list your domain name for sale through the registrar of record, and then only if they participate in the SMP system. So in my mind, it is not outside the realm of possibility for there to be a noticeable movement of domain name registrations from registrars not offering SMP to those that do. I wrote to Peter as an OpenSRS reseller, as a Tucows shareholder, and as a registrant of a substantial number of domain names currently for sale. Peter's responses were always professional and cordial, and they addressed my concerns about the SMP program. I am not the most eloquent when it comes to debate, but I sincerely wanted to convince someone at Tucows to take SMP seriously, and to consider the possibility that demand for the service could affect their bottom line. At any rate, I was not successful in converting Peter to my way of thinking, and the statement I quoted was part of his longer response, of which I will quote the pertinent paragraphs: > We feel that 90% of the transactions for this service will be done on names > owned by the top 12 speculators in the market. Fortunately, and maybe > unfortunately as you may not know, we do not have any of these individuals > as an active reseller of Tucows. Our systems and services are optimized for > a reseller model that have clients as opposed to a storage model of one > owner. What speculators we do have in our fold, which we do have a few > smaller ones, use us as a premium service for trust and our manage interface. > > What all this means is that we do not have the resellers that would leave us > over not offering this product, and if the clients we do have in this > industry do leave, there would be little to no impact to our operations > whatsoever but we feel that the relationship we have built with these > clients over the years is strong enough to weather this type of release. When I quoted the abbreviated statement, I was not aware that taking it out of context would materially alter its meaning, but to those readers who think it did, and to Peter, I sincerely apologize. It was not my intent to reflect poorly on him or on Tucows in general. In fact, the motivation behind my post was to have a positive impact on Tucows and its resellers. (As I said, I'm not the most eloquent...) Anyway, to summarize additional information I have received today (and I'll use my own words so as not to misquote any individual), Tucows has limited resources which are currently being spent on better products than SMP will be, and while they do care that some resellers could leave, they have had to make tough decisions that benefit the whole as opposed to one or a few. Apparently mine was the lone voice expressing interest in SMP. Is that an accurate portrayal? I hope so. Of course Tucows targets their services to the majority and can't be expected to cater to everyone. Our difference of opinion on SMP in particular has more to do with my thinking that SMP will be a mainstream service in demand by many, versus Tucows' view that it will only be of interest to a few major speculators. Time will tell whether my assessment of SMP or Tucows' is correct. If mine is, Tucows (and their resellers) will suffer. If I am incorrect, I will have moved my domains and spent a lot of money for nothing. It is inevitable that the secondary market will become legitimized, and that more efficient methods of distribution than we have at present will become available. This will surely benefit everyone involved. ----- Original Message ----- From: "Chuck Hatcher" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Friday, January 10, 2003 12:46 PM Subject: Future of Tucows/OpenSRS > I have been an OpenSRS reseller and a member of this list since April 2000. > Although domain name registration is not my primary business, it continues > to be an important part of my overall plan. My account has brought 4,931 > domain-years of business to Tucows so far. > > Those of us who have been here for awhile can recall dozens of reseller > issues that have come up, arguments pro and con, statements by Tucows > addressing the problems, and eventually a resolution. If you look back at > the responses in the early days and compare them to those of more recent > times, you can't help but get a sense of a change in attitude at Tucows. > The focus now seems to be more on "the numbers" and less on the merits. > > Now, don't get me wrong, I am a capitalist through and through. The job of > every business is to be profitable, and you cannot ignore the numbers. But > there is a difference between observing good results from focusing on > customer needs, and focusing only on the results. The earlier approach at > Tucows seemed to be to provide what customers asked for, to do business in a > fair manner, and to listen to constructive criticism. The approach was > successful, at least from the measure of the number of domain names > registered. But as seems inevitable as companies grow, the link between > customers and management has grown weaker. > > I have stayed with Tucows as my primary registrar even though other > registrars continue to offer more attractive pricing. (My effective > wholesale price at OpenSRS is actually higher today than it was in the early > days when there were rebates.) I made this decision consciously based on my > experience with Tucows, my concern that a registrar needs to make a certain > amount of money to stay in business for the long term, and the overall "good > feeling" I had from being an OpenSRS reseller. But the domain name business > is in a constant state of flux, and each of us must constantly re-evaluate > our supplier relationships. The big question for me is whether or not > Tucows actually wants to keep my business. And if they do, how are they > showing it? > > The referral list has been discussed periodically over the past couple of > years. The list itself is not an issue for me - I don't want to be on the > list because I don't actively market a retail registration business. But > seeing how Tucows responds to other "little guys" who do want to be listed > is very important to me. It's hard to find any indication that Tucows is > actively trying to promote the small reseller. I would think anything they > could do to help the little guy to become more successful would be good for > their business. (I would also think the biggest resellers are the more > likely candidates to become accredited registrars and leave the fold.) > > Recently I brought up Verisign's upcoming Secondary Market Program, looking > for a committment from Tucows that it would be offerred through OpenSRS > resellers. I may be alone in my opinion that SMP will be a major factor in > choosing a registrar in the year to come, but the fact is that it is a > wholesale registry product, and the business of registrars is to supply > registry products to their customers. I felt the choice to not provide the > service could be a costly one for Tucows, but in a private email a Tucows > representative told me, "...we do not have the resellers that would leave us > over not offering this product, and if the clients we do have in this > industry do leave, there would be little to no impact to our operations > whatsoever..." Would the "old Tucows" have responded in this manner? > > I realize a lot of Tucows' success can be attributed to Network Solutions' > disastrous business practices. OpenSRS was started at the right time with > the right message to catch a large part of the mass exodus from NSI. And it > has been fashionable to trash NSI and Verisign, which has led to an > automatic disdain for anything coming from Verisign. But like it or not, > Verisign is the com/net registry, and every .com and .net domain name > registered or renewed is the sale of a Verisign product. The registrar is > selling a commodity item. Sure, there are things that differentiate OpenSRS > from NSI, Register.com, and the over 100 other registrars that now exist. > But the core function of a registrar is to provide registry products > efficiently. And when a registrar decides not to offer a new registry > product, they force their customers to go elsewhere to buy that product. It > is hard to understand a registrar willingly sending their customers to other > registrars. It comes off as arrogant to say, "If you need that, then we > don't need you." Now it appears as though WLS is coming. Will Tucows > condemn WLS as another Verisign travesty of fair trade, or embrace it as a > new product some customers may actually want to purchase? > > Tucows, now with a stock price of 23 cents and a market cap of under 15 > million, has become the number two registrar in terms of com/net/org > registrations in less than three years. That's a fantastic achievement. It > would be easy to think, based on that success, that everything is rosy and > future success is assured. Complacency is dangerous, and things happen fast > in the domain name business. I hope someone at Tucows is watching the > trends, looking ahead at the winds of change, and making plans for continued > success in the future. I know I am.
