IEDR creates €100k fund to boost SME e-commerce

26 Nov 2010

While 66pc of Irish businesses have a web presence, a shockingly low 21pc of these have e-commerce functionality. This is up just 3pc since 2000. To counter this and inspire activity, the .ie Domain Registry has created a €100,000 fund.

IEDR chief executive David Curtin told Siliconrepublic the plan is to identify 10 SMEs with potential and give them €10,000 each to develop cutting-edge e-commerce websites. The aim is to finally help SMEs to realise the digital economy is the one sure route to economic salvation.

The IEDR published its inaugural Domain Name Industry Report that revealed only 66pc of Irish firms are online and only 21pc of these have the ability to handle e-commerce transactions.

This has grown a marginal 3pc since 2000. It is a shocking indictment of the lack of advice and encouragement given to Irish businesses to go online and participate in a burgeoning digital economy. To put it mildly, the vast majority of Irish firms are operating along 20th-century principles when the rest of the world is grasping 21st-century business practices, where e-commerce is king.

Picture-postcard websites – not good enough

“Irish businesses have picture-postcard websites but even they are of a low standard compared to what companies in the UK are doing,” Curtin said.

In other words, comparing the average Irish firm’s website with its UK counterpart would be like comparing a Lada with a Ford Mustang.

The IEDR is working with the Small Firms Association and a working group will select the 10 SMEs that stand to benefit most if they upgrade their web presence.

“It will be a reasonable beginning and the idea is to focus the minds of other SMEs and get them to ask themselves why is it they don’t or won’t join the 21st century? Do they not see the value in it?

“Three years ago, many would have said that broadband was an issue but I don’t think that is the case.

“There is a clear digital divide and this is attitudinal and because they aren’t receiving the message from the policymakers or the technology industry that the power of the web can not only boost revenues but make their businesses more efficient.”

Curtin illustrated the stark contrast between multinationals based in Ireland, such as Google and Microsoft, whose entire businesses function on the internet, and bricks and mortar Irish businesses staring bleakly at an uncertain future.

“SMEs and SOHO workers need to step up to the plate, educate themselves and find out more about getting connected and being 21st-century businesses. There are 350,000 self-employed people throughout Ireland and you can be sure not all of them are using the web.

“Think about it, firms should be using automated invoicing, handling electronic payments, which enables them to do more productive things and still add a personal touch to their business. If customers can pay for products at 2am, the businesses can make money while they sleep. Why don’t more of them see this?”

Other highlights from the Domain Name Industry Report include:

–      Growth in new .ie registrations at 37pc per annum over a five-year average.

–      The .ie share of Ireland’s domain market is 41pc, comparable to the combined international ccTLDs’ share of the global domain market at 39pc.

–      A consolidation of the Irish domain market means the top 5 registrars now account for 62pc of all .ie domains and 79pc of new registrations.

–      Non-renewal rates for .ie domains indicate a shorter domain life cycle as domains are registered for specific purposes and then discarded. Rates, currently approaching 15pc, are high by Ireland’s historical standards but still lower than the international experience of 25-30pc.

–      The arrival of the new .eu top-level domain expanded the market in 2006 and contrary to some expectations, did not result in any erosion of the .ie namespace.

–      County by county analysis shows Dublin has the highest number of .ie domain name registrations at 44pc of the total, with 64,788 domains.

Curtin said the €100,000 will be coming from the IEDR’s reserve fund. The IEDR is now in its 10th year and in recent weeks the registry celebrated its 150,000th domain registration.

Curtin deserves credit for turning the IEDR around from an entity that was bankrupt eight years ago to a financially solvent operation that recently reported operating profits of €386,000 and making the .ie domain the second most-trusted domain in the world. He did this by sticking rigidly to quality standards and introducing automated systems to handle domain registrations.

He believes the digital economy – if firms, policy makers and the ICT industry do their jobs – could be a sure route out of recession.

“Google has made this point before, not enough Irish websites are e-commerce ready. It’s a virtuous circle. The better the websites, the more people who are online, and the more products sold online, means better efficiencies and more jobs. But everybody has to play their part.”

The report also observes that Irish-based hosting providers (HSPs) are competing successfully with major UK and European hosting providers, and have gained market share at the expense of the US-based hosting service providers who once dominated the Irish market at the start of the decade.

Irish HSPs have increased their market share to approximately 89pc from approximately 3pc in the year 2000. As the ccTLD market has matured, hosting patterns have favoured indigenous hosting providers, making it increasingly difficult for new, non-Irish hosters to enter the local market.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years