The company that runs all .org domains, Public Interest Registry (PIR), has opened up its US$30m back-end contract to tender.
In an announcement this morning, the company – which supplies the Internet Society and hence the IETF (Internet Engineering Task Force) with the bulk of its funds – said it was issuing a "request for information" to run its ten million domain names starting in 2017.
Ever since it was created in 2002, PIR has used registry operator Afilias to run its technical backend. Afilias runs a large number of other registries, both by itself and as the backend operator for others, including .info, .mobi, .pro, .asia, .xxx and more than 30 others.
However, PIR has represented something of a cash cow for the company, charging PIR $32m for its services in 2013 and $33.2m in 2014. That equates to roughly $3 per domain, whereas the expanding market for registries has brought the cost down significantly, with some backend operators offering deals that equate to roughly $1 per domain.
In other words, PIR could save itself up to $20m a year by opening up its contract to competitive bidding. It's not just the .org registry either: PIR applied for two new internet domains under the 2014 expansion of the internet's address space and now also operates .ngo and .ong, which it hopes to become the internet address of choice for international non-profit organizations.
In its announcement, PIR noted that price will not be the only factor affecting its choice: "The organisation desires to contract with a qualified backend registry services provider that shares a similar reputation and holds itself to the highest operational and ethical standards. The selected backend registry service provider should be a 'valued business partner' – an organisation that combines outstanding qualifications in service delivery with the ability to engage Public Interest Registry in a business relationship that seeks strategic and innovative approaches to enhance the capability and efficiency of service delivery."
It also notes that it will make a decision based on the "best value solution" using six main criteria that include: "Can demonstrate a collaborative, 'valued business partner' approach in delivery across all services," and "values an innovative and adaptive approach to generating new ideas and products."
Despite the huge expansion in internet domains in the past year – from 300 to over 1,500 – there are still comparatively few registry operators with experience in running ten million domain names and the significant technical challenges that represents.
Aside from Afilias, PIR can expect offers from Neustar – which is a larger, more corporate version of Afilias – and Nominet – which runs .uk and is actively branching out to more of the market. One or two other operators may also try to bid.
It seems likely, though, that PIR will want to continue its 15-year relationship with Afilias – just with much better contract terms.
For its part, Afilias put out a statement in which it said it has "been expecting an RFP since our last contract was signed" and noted that its "commitment to the success of ISOC and PIR remains as strong as ever."
PIR has the rights to run all .org domains and makes $80m a year doing so. Of that it pays $30m to Afilias and gives $30m to the Internet Society (ISOC) in the form of a grant. That $30m makes up the bulk of ISOC's annual $50m revenue. The rest of PIR's money is spent on business expenses, salary and advertising.
Any savings made by PIR on its contract will likely be passed on to ISOC, which in turn supports the IETF. ®