The Dynamic Network Services (Dyn) story is not unlike those of many tech startups. The difference is that Dyn started during the dot-corn boom, survived the bust, thrived after the dust settled, and surges ahead today. Deeply rooted as an Internet infrastructure company, it began with a focus on the domain name system (DNS) and continues to expand by offering a wider range of infrastructure services.

Since 1998, Dyn has served 4,000,000 homes, small businesses, and enterprise users with a suite of DNS. e-mail, domain registration, and virtual servers. It provides customers—from the hobbyist to the Fortune 500 enterprise—with reliable and scalable IT services at competitive and predictable prices, through easy-to-use and secure interfaces. Individuals and companies partner with Dyn to manage their website traffic, e-mail delivery, and uptime, and to harden their internal and external network connectivity.

It has built a rock-solid Global IP Anycast network using only top-level providers and equipment and has provided it at an affordable price. "Uptime is the bottom line" for them and for companies like 37 signals. Zappos, HomeAway, Twitter, Audience-Science. and more who depend on Dyn to keep their Web presence and e-mail delivery at peak performance for their users.

Like many of its Web 2.0 customers looking to monetize, Dyn Inc. has been there, done that. It started as a free service based out of a college apartment—a couple of guys with a big idea. That service, then operating as DynDNS.org, was a dynamic DNS service for a home user to host a website on a home computer or remote access back to a PC. Over time, as the user base grew and became more demanding, Dyn turned to a donation- based service in an effort to stay afloat and add complementary services. Later, Dyn transitioned to a recurring revenue software- as-a- service (SaaS) model with a suite of IT services aimed at the home/SMB market.

Fast-forward to 2005, and its story of maturation continues. Dyn initiated a customer audit and mining exercise of the over 2,000,000 active DynDNS.com users at the time. From this, the company realized that many high-profile corporations were using its consumer-grade service. This revelation, coupled with the simple fact that the premium, externally managed DNS industry lacked options, encouraged Dyn to unveil a new brand, the Dynect Platform. Dynect was introduced to the outsourced DNS market in the fall of 2007.

Today, Dyn Inc. has served over 14,000,000 home/SMB users on the DynDNS.com brand and has over 1,000 corporate/enterprise customers on its globally deployed Dynect Platform. The company has moved beyond offering DNS exclusively and now offers e-mail delivery services through its SendLabs brand. The days of simple word-of-mouth growth are long gone, and Dyn has become a much more proactive player.

Not only does it provide services to consumers and corporations, it also provides services to the government. All federal government agencies that have the .gov designation were given until December 2009 to deploy DNS Security Extensions (DNSSEC) for their domains. DNSSEC adds a layer of security to DNS so that computers can verify that they have been directed to the proper server, preventing the most dangerous types of DNS attacks and cyber-hacking. Implementing DNSSEC is especially critical for high-risk government sites because they are often targeted by cyberattackers and are expected by users to be safe.

DNS is the backbone of the Internet's infrastructure. Without it, websites won't work, period. Once hackers have control over a DNS server, they have free reign to mislead and redirect Web users to unsafe territory. Due to the increase of companies reporting attacks of this nature, it has now become more critical than ever to implement this additional layer of security at the DNS level. Government and other critical industries such as banking, online retail, healthcare, and education are also prime candidates for DNSSEC, as they may be a larger target for potential attackers.

Because technology changes rapidly from day to day. Dyn experiences shorter product cycles than do companies that deal with tangible products_ In a noncommoditized scenario. the company finds it easier to be flexible with pricing. As a result. each customer requires different pricing strategies. Outliers—those who are not the average customer—can be more demanding of services. but are not more costly to the company because Dyn's costs are fixed. Customers. however. are willing to pay a different rate when traffic and consistency are different. When demand goes up. prices go up

The company does expense analyses to determine pricing_ In the beginning. pricing structure was evaluated monthly. but now that Dyn is more established. forecasting is done quarterly or semi-annually. depending on client needs. Its invoice structure is annual—one year in advance—so the greatest risk to Dyn is credit card fraud_ Before answering the questions below. reread Chapter 16. and watch the Dyn Inc video for this chapter

Q Explain the importance of fixed and variable costs to Dyn's pricing decisions.

Answer rating: 100% (QA)

Summary D is a tech startup involved in building websites It serves small businesses homes and ente... View the full answer