TL;DR: DNSimple eliminated our "legacy plan" and tried to increase our annual spend from $810 (plus domain registration fees) to $4,000 (plus domain registration fees).
Over ten years ago, I started using DNSimple's API to register domains for my side project, FolioHD (an online portfolio service). At the time, it cost $10 for a .com domain along with a monthly reseller fee of $50.
Recently I got an email telling me that my plan was being deprecated, and unless I hopped on a sales call to look at an enterprise plan, my new annual spend would be $9,616.70, up from $4,913, representing a 96% increase in total cost.
Let's take a step back. When we started registering domain names for FolioHD around 2012, it was a manual process on Godaddy. We paid $7.49/year for these domains, but had to configure them manually.
As FolioHD grew, this became unmanageable ("Do things that don't scale") and so we looked for an API that would allow us to register and provision domains automatically. There weren't a lot of options at the time, so we chose DNSimple because they had a straightforward API and fees that weren't exorbitantly expensive. Out of the gate, our costs were going to go up, but DNSimple provided a service that we could justify.
Godaddy: $7.49/domain → DNSimple: $10/domain
In 2019, DNSimple raised prices to $14/domain, then $14.50, and now it stands at $15.50. So I'm now paying over 50% more per domain than when I signed up.
Domain registration has never a profit center for FolioHD. I never wanted customers to have to decide if they wanted to save money by registering a domain on their own and configuring DNS to work with our service versus doing it directly through FolioHD. So when Godaddy domains cost $7.49 to register, we charged $12. When switching to DNSimple, we had to adjust this cost to $15/domain.
To this day, I've never raised prices on customers for an ancillary service. I just think it's the wrong thing to do, especially on a subscription service with lock-in.
Domain registration is a sticky business. If you ever want to leave a domain provider, you have to pay another company to renew the domain which extends the registration another year.
Aside from that, the process of transferring a domain includes unlocking the domain so it can be transferred, sending an auth code which then has to be confirmed, and going through a transfer period. In its entirety, it's not a streamlined process.
So if you have a large portfolio of domains you need to move, not only is there a significant cost involved, but it also takes a lot of time.
And that's partially what makes me so pissed off about this entire experience. For a company I've been with for over a decade, to receive an email out of the blue telling me that my price is going to increase 2x-5x – with no rationale – is infuriating.
On top of that, DNSimple's core product is actually kind of terrible. They don't provide an exact date a domain name will be renewed, instead just saying a domain will renew within 30 days of its renewal date. This makes it particularly hard to allow customers to cancel their domain renewals until the last minute, as is common with every other registrar. So my choices are a) potentially eat the cost of a domain renewal if a customer decides they don't want to renew after DNSimple has renewed the domain, or b) charge customers early for renewals. (I ended up going with the latter option.)
So to summarize, not only does the product not work as expected, but now they want to exponentially increase my cost.
Why would I stay?
I've put up with a lost of cost increases here, and I fully understand that when your services are dependent on an upstream provider, you have to pass along cost increases, but for a heavily commoditized business like domain registration where the value that DNSimple is providing me is no different than the product I started using ten years ago, I see no justification in the money grab.
This reminds me of when Intercom switched from being a product-led organization to a sales-driven org. In that case, my cost was going to 10x. In Intercom's case, they made the right move by making exceptions for long-time customers where the risk of brand damage was greater than the amount of revenue they'd add.
The same is true here. In my (potentially uninformed) perspective, DNSimple should have just bit the bullet, grandfathered in long-time customers, and looked for growth opportunities with new customers and in new product development.
Without receiving any communication from them explaining the reasoning, aside from an email within 3 months of a cutoff date, I have nothing to go off of other than assumptions. Those assumptions are: they hired a new head of sales who has a plan to "10x revenue", they're looking to get acquired and need the numbers to look more attractive, or they never operated at a profit in the first place (doubtful, given the premium prices).
I will admit I don't know the first thing about being a domain name reseller and the challenges that are involved in a business like this, but without any other perspective from DNSimple, the only takeaway I have is that this is yet another example of a predatory price hike in a product segment that has natural lock-in. I can think of zero people who enjoy being on the receiving end of enterprise sales, and it was worth it to me to spend an annoying amount of time to move off of DNSimple than just roll over and accept a 5x increase in cost for the same (subpar) services.