At the end of 2019, the US government passed a new bill authorizing the Department of Defence to sell around 200 million Internet Protocol 4th version addresses. Several blocks of IPv4 addresses are planned to be sold out in ten years. Vincentas Grinius, CEO of Heficed, explains how these changes might affect the IP address market
January 22, 2020. The US Department of Defence announced the sale of around 200 million IPv4 addresses in multiple large and medium blocks. According to Vincentas Grinius, CEO of Heficed – the IP address infrastructure service provider, the new addresses would decrease the current IPv4 pricing, but would not solve the IPv4 shortage for certain market players.
How would this Department of Defence sale affect the IP address market in the upcoming years?
Potential Buyers – Do Small Companies Stand a Chance?
New release of IPv4 addresses will be sold in big and medium-sized blocks, and since the Department of Defence has a deadline, they are focusing on large buyers. Large companies such as Amazon, Microsoft, or Google are always looking to grow their IP address databases, which would make them potential buyers.
“The biggest incumbents in the market are always looking to buy more IP addresses. As the number of IPv4 addresses is facing depletion, and we are slowly transitioning to IPv6, corporations are more eager to collect as many IPv4s as possible. At the same time, released addresses are contained in large bulks, which doesn’t give many chances for smaller buyers and brokers to obtain their fair share. Therefore, I believe that we will end up with a few major corporations acquiring everything.” – Vincentas Grinius expressed his concerns.
Do More Addresses Mean Lower Prices?
With new releases entering the market, companies are promised to see lower IPv4 prices. However, if only a few major buyers acquire it, the market might not face significant price changes.
“Due to IPv4 address exhaustion, prices have been rising for a while now. As the average price in 2015 was around 6 dollars, in 2018, the price for a single IPv4 address reached 17 dollars, and it’s predicted that this number will only grow and double in upcoming years. It’s possible that the Department of Defence bill could bring positive changes and lower IPv4 prices, yet if these addresses are shared only among a few big corporations, we probably wouldn’t even notice it.” – said Vincentas Grinius.
Risks of IP Address Abuse
Many IP addresses are linked to spamming, hacking, and similar vicious activities. Companies create blacklists to contain abuse, but the more addresses enter the internet, the more difficult it gets. Vincentas Grinius believes that potential buyers – large corporations could help solve the issue, “Although every address holder can abuse their usage rights, it becomes more challenging to control it with the surge of new addresses. However, if only large and well-known corporations obtain new IPv4 addresses, the chances of IP address abuse can be monitored easier.”
New IPv4 release might shake up the market. However, it possesses both positive and negative outcomes. New IPv4 addresses postpone the transition to IPv6 and give us more time to prepare. Yet with more affordable and accessible options, the chances of IP address abuse might increase. And if large incumbents acquire most of the blocks, we might not see significant changes.
ABOUT HEFICED
With its headquarters in London and server locations in every continent, Heficed is a network engineering and infrastructure service offering IP Address Market platform, including cloud solutions and bare-metal servers. At the core of Heficed‘s business is its world‘s first automated IPv4 address infrastructure engineering platform, which streamlines the process of leasing and managing IP addresses. www.heficed.com
