The IPocalypse struck the United States in 2015 and three years later – nobody cares. The end of IPv4 was going to mean the Internet Protocol version 6 (IPv6) takes over the world. Well, recent updates say IPv4 is still the dominant protocol on the Internet.
IPv4 number trading between private parties has proved to be an effective means of extending the life of IPv4 by redistributing previously allocated IPv4 numbers. Trading between private parties is very active in North America, Europe, and the Asia-Pacific regions. This has allowed IPv4 network operators to support and extend their IP networks with excess unused supply through the IPv4 market.
Janine Goodman, Vice President and co-founder of Avenue4 LLC., a Washington DC-based IPv4 broker and advisory firm posted a 2018 Q3 update on the IPv4 market for CircleID. In the update, the author noted that during Q3 of 2018 there is still a voracious appetite for IPv4 numbers – 18 million IPv4 numbers were transferred in the quarter. There were nearly 42 million IPv4 addresses changing hands in the 2018 year to date, a 160% jump compared to 2017
The article states that IPv6 adoption in the U.S. (based on Google user stats) fell after the beginning of the year and has yet to recover. Ms.Goodman cites predictive models which suggest that U.S. IPv6 adoption will not hit the 50% mark until sometime in 2020. Globally, IPv6 adoption has been slow, peaking at 21.5% during weekdays and 25% during weekends. The data from Avenue4 confirms that IPv4 continues to be the dominant Internet protocol.
For those firms purchasing IPv4 addresses, the most common IP block size is the /24 (256 addresses), followed by the /16 block (65,536 numbers). Nearly 90% of those /16 blocks were transferred to large block buyers. The /17 (32,768 addresses) and /18 (16,384 addresses) are also popular as large block buyers are increasingly willing to accept a collection of smaller non-contiguous ranges from sellers.
Block prices will rise over the next 6-12 months. The article reports that most block sizes are north of $17.00 / number with larger blocks reaching and occasionally exceeding $20.00 / number. Avenue4 says fierce competition among large block buyers is driving unit prices up. Until this demand is met, pricing should continue to escalate. IPv4 prices were $11.25 / address when I first wrote about Microsoft’s purchase of Nortel’s IPv4 addresses in 2011.
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The switch to IPv6 is being slowed by two factors. The first is network address translation (NAT) which has become better understood and implemented. The other is the evolution of the buying and selling of IPv4 addresses, led by firms like Avenue4 and IPv4 Brokers.
One of the knocks against moving to IPv6 is CAPEX and OPEX costs. But neither really holds water anymore. The data from Avenue4 says that firms are willing to pay over $1.3 million for a \16 block. Firms could leverage $1.3 million to update to IPv6. IPv6 is fully built into modern operating systems and networking hardware. Buy the right devices during your regular update cycles.
Microsoft (MSFT) recently decided to embark on the tricky transition from IPv6 and IPv4 or ‘dual stack’ to IPv6-only, which Microsoft believes will solve its problems with IPv4 shortages and enable simpler network management.
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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.
Mr. DeLong is not a fan of either brokerages or auction houses. He told DCK, “I’m old-school in this regard … I feel that the whole idea of treating address resources as a resale commodity is distasteful at best. These are a community resources that [were] handed out without charge on the basis of actual need for the addresses. It’s pretty clear to anyone who was around in the early days that if you had addresses you no longer needed, you were expected to return them to the community for use elsewhere. I regard these monetized transfers as being more of a necessary evil to bridge a (hopefully) short-term gap and not a desirable state of affairs.”