Donuts makes key contributions to open source registry platform, setting up a possible migration in the future.
The shakeup in the backend domain name registry services business continues.
Today, Google launched an open source cloud-based registry platform called Nomulus.
The company already uses the platform for its own domain names.
Donuts, which currently uses Rightside’s backend technical services for its roughly 200 domain names, has been contributing to the project for the past 20 months, it revealed today.
Donuts’ contributions include specs for a Domain Protected Marks List, Early Access and tiered pricing.
All of this means that Donuts could theoretically drop Rightside (NASDAQ:NAME) and move to Nomulus.
But Donuts CEO Paul Stahura said the company has not committed to moving the backend for its top level domain names to Nomulus.
“We helped to provide an alternative to the Rightside platform and other platforms that suits our needs,” he told Domain Name Wire. “We have not committed one way or the other way to move to Google’s platform.”
Stahura confirmed that Donuts is under contract with Rightside for registry services, but declined to reveal when the contract ends.
Rightside was a close partner of Donuts during the new top level domain name application process. The two companies jointly applied for certain top level domain names through a separate entity, and these domains were subsequently divvied up between the companies. However, relations with Rightside might have been strained since Donuts made a public offer to acquire Rightside’s new TLD business.
It’s unclear how much of a revenue hit Rightside would take if Donuts doesn’t renew its contract for registry services. Rightside reported $2.9 million in registry revenue in Q2 this year, but most of this is likely from selling names under its own 40 top level domain names. Rightside’s total revenue in Q2 was $54.0 million.
Of course, participating in the open source project also gives Donuts the upper hand in negotiations when it comes time to renew its contract with Rightside.
One reason Donuts might not make a move now is because it has to pay $5,000 in fees to ICANN per top level domain name if it wants to switch backend providers.
That might not seem like much, but it would cost Donuts $1 million.
Richard Tindal, Chief Operating Officer of Donuts, said he believes ICANN might be reevaluating the fee. Indeed, this makes sense given the economies of scale of registry testing.
The cost of registry services has been plummeting and having a cloud-based, open source platform created by Google will continue to put pressure on pricing. MMX (Minds + Machines) recently abandoned its own registry platform, deciding to outsource to Nominet.
Stahura believes the cost of technical registry services will continue to drop.
“The price will drop because, essentially, operational costs are going down because of the cloud and the open source shared environment, which is why we agreed to participate in this project,” he said.