According to an article at CircleID, the value of IPv4 addresses is set to increase. IPv4 is the traditional way to address devices that attach to the Internet. The world has been running out of these addresses, leading to the development of its successor, IPv6, Despite being available on the public internet since 2011, the new protocol has not been widely implemented. Only about a third of the top 1000 websites globally support it. Meanwhile, existing IPv4 networks have become more efficient in their use of IPv4, reducing the drive to implement IPv6.
Impact of COVID-19 on the IPv4 Market
The COVID-19 pandemic brought significant changes to the IPv4 market. Many firms sold off their IPv4 addresses to raise capital. The article says the IPv4 prices have risen over the past three years. Another factor driving up the price of IPv4 networks is the cloud computing giant, Amazon.
Pricing Changes by Cloud Providers
AWS has announced that starting February 1, 2024, they will begin charging at least $40 per IPv4 address per year. It is anticipated that other cloud giants such as Alibaba, Cloudflare, Google, Microsoft, and Oracle will follow AWS with similar pricing structures. Notably, AWS’s new cost per address is 300% higher than what Microsoft paid for Nortel’s IPv4 address range in 2011.
IPv4 Arbitrage Opportunities
Given AWS’s price exceeding $40 per address per year, the author expects businesses to purchase addresses on the open market at less than AWS’s $40 and migrate them to the cloud. This will save them some of the AWS costs. This strategy is likely to increase demand for IPv4, further contributing to their value increase.
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Organizations holding even a small pool of IPv4 addresses could monetize this asset. By implementing Network Address Translation (NAT) or transitioning to IPV6 on their internal networks, they can free up IPv4 addresses. These addresses can then be sold to networks grappling with the cost increases imposed by the cloud providers.
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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.