After bagging one million users in India, cloud computing provider GoDaddy plans to go into tier II and smaller cities for the next million users. The US-based company said that it took five years to get a million customers to use its products such as website creation, hosting, domain name registration and e-mail.
While that may sound good in theory, on the ground things are different.
“The average revenue per user is not significant in this business, the margins are thin and keep in mind that the Indian customer is very price conscious,” said Sanchit Vir Gogia, Founder, Greyhound Research.
Cost of servicing a customer can often be higher than the actual business it gets, which puts a question mark around business viability over time.
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Analyst:
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.