Coming This Summer: U.S. Will Run Out of Internet Addresses savvy companies are stocking up.
May 12, 2015 22:39:30 #
http://www.wsj.com/articles/coming-this-summer-u-s-will-run-out-of-internet-addresses-1431479401
The growth of corporate data centers has fueled demand for new Internet Protocol addresses. Nearly all the 4.3 billion addresses created in 1981 are already in use. PHOTO: MEG ROUSSOS/BLOOMBERG NEWS
By ROBERT MCMILLAN
May 12, 2015 9:10 p.m. ET
0 COMMENTS
Office space in Silicon Valley isnt the only real estate thats gotten scarce in the booming technology market. The U.S. organization that distributes some of the Internets most important virtual property is running out of inventory.
Some savvy companies have been stocking up, but the shortage could mean headachesand significant costsfor U.S. businesses looking to expand on the Internet.
The limited supply of new Internet Protocol addresses is nearly gone. Asia essentially ran out in 2011, and Europe a year later. North Americas allotment is due to dry up this summer.
Enterprises that dont have a plan for what to do with this will have this brought up by their board, said James Cowie, chief scientist at Dyn, an Internet consulting firm.
IP addresses are the Internets equivalent of telephone numbers. These numerical codes are different from the familiar top-level domain names that end in .com or .org. They are used behind the scenes anytime data moves over the Netwhen a laptop requests a Web page, a smartphone posts an Instagram photo or a Nest thermostat downloads a software update.
The shortage puts companies that maintain their own large and growing Internet presence at the biggest risk, especially providers of cloud-computing services. Such companies could find themselves saddled with unexpected costs, technical problems or simply an inability to serve new customers. Those that arent building out their own data centers wont face the shortage directly, but their online providers likely will.
Last November, Salesforce.com Inc. picked up 262,144 addresses. Salesforce declined to comment. But the company needs new IP addresses to fuel continuing expansion of the data centers that deliver its growing suite of Internet-based business apps.
Microsoft Corp. spent $7.5 million in 2011 on 666,624 addresses formerly owned by the bankrupt networking company Nortel Networks.
The priceroughly $11.25 per addressis what many companies are paying today, according to Sandra Brown, president of IPv4 Market Group, which brokers such sales. Prices are going to rise, she said.
Facebook Inc. took a different tack. The social network moved 90% of its network from the old-school IPv4 system to the next-generation IPv6, which offers a much larger number of addresses.
If we had done nothing for our internal services, then we would not have been able to build new data centers, said Paul Saab, the Facebook engineer responsible for this work. In other words, the breakneck growth of the networks user base would have skidded to a halt.
The volunteer engineers who invented the Internet created 4.3 billion addresses in 1981 as part of the IPv4 specification. IPv4 was the first version of the Internet protocol; there were no versions 1, 2, or 3.
The billions of addresses seemed like plenty at the time. Five regional affiliates took on the job of doling them out, free for the asking, to anyone who could prove a need.
Now those IP addresses are nearly all in use. Only about 3.4 million are available in the American Registry for Internet Numbers, said John Curran, the groups president and chief executive. ARIN manages the about 1.3 billion addresses assigned to North America. Thats about 30% of the world supply. Mr. Curran predicts his organization will stop handing them out by the end of summer.
The shortage isnt as dire as it may appear. The 4.3 billion limit applies to IPv4. But IPv6, approved in 1998IPv5 never caught onallows for a mind-boggling increase in addresses to 340 undecillion, or 340 followed by 36 zeroes, enough to assign an IP address to every atom on Earth.
Companies that run out of IPv4 addresses can upgrade to IPv6 by purchasing new network switches and routers. About 9% of the Internet has done that so far, says Facebooks Mr. Saab.
But the upgrade isnt cheap. Research firm Gartner says a companywide migration costs about 7% of the companys annual IT budget. Companies spent $2.2 trillion on IT in 2014, according to the researchers at Forrester.
Eventually everyone on the Internet will have to make the leap, but businesses with a big Internet presence have an incentive to put it off for as long as possible. Meanwhile, companies that arent ready for the big upgrade must find addresses wherever they can, often from companies that took advantage of early giveaways and got far more than they could ever use.
In January, Amazon.com Inc. bought four million IP addresses from DuPont Co. In February, Microsoft acquired 4 million from Eli Lilly & Co. A month later, it picked up another two million from Xerox Corp.
Merck & Co. has unloaded seven million over several years, according to an analysis of publicly available data by IPv4 Market Group.
Xerox spokesman Sean Collins said his company recently began to identify and free up IPv4 addresses it controls.
No one involved in the deals would say how much the companies paid.
Microsoft declined to comment for this article. But David Huberman, a former ARIN staffer who Microsoft hired two years ago to manage IP growth, said he expects IP prices to remain closely guarded secrets. Buyers and sellers arent going to tell, he said, because in a postexhaustion world, its dog eat dog.
The hot market for IP addresses has made space for smaller operators as well. Last year entrepreneur Elvis Velea brokered $22 million of IP transfers, totaling 2.5 million IP addresses. The Microsoft cloud service is eating up IP addresses like candies, he said.
Mr. Velea got into the Internet business more than a decade ago in his native Romania, buying a fiber-optic link from a local telecommunications company and stringing network cables over his balcony to bring his neighbors online. Now, he sees opportunities to make money transferring IP addresses from the U.S. to Europe and the Middle East, where demand is much higher.
Once ARIN hands out its last 3.4 million addresses, brokers like Mr. Velea will be an important source for many big customers.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
The growth of corporate data centers has fueled demand for new Internet Protocol addresses. Nearly all the 4.3 billion addresses created in 1981 are already in use. PHOTO: MEG ROUSSOS/BLOOMBERG NEWS
By ROBERT MCMILLAN
May 12, 2015 9:10 p.m. ET
0 COMMENTS
Office space in Silicon Valley isnt the only real estate thats gotten scarce in the booming technology market. The U.S. organization that distributes some of the Internets most important virtual property is running out of inventory.
Some savvy companies have been stocking up, but the shortage could mean headachesand significant costsfor U.S. businesses looking to expand on the Internet.
The limited supply of new Internet Protocol addresses is nearly gone. Asia essentially ran out in 2011, and Europe a year later. North Americas allotment is due to dry up this summer.
Enterprises that dont have a plan for what to do with this will have this brought up by their board, said James Cowie, chief scientist at Dyn, an Internet consulting firm.
IP addresses are the Internets equivalent of telephone numbers. These numerical codes are different from the familiar top-level domain names that end in .com or .org. They are used behind the scenes anytime data moves over the Netwhen a laptop requests a Web page, a smartphone posts an Instagram photo or a Nest thermostat downloads a software update.
The shortage puts companies that maintain their own large and growing Internet presence at the biggest risk, especially providers of cloud-computing services. Such companies could find themselves saddled with unexpected costs, technical problems or simply an inability to serve new customers. Those that arent building out their own data centers wont face the shortage directly, but their online providers likely will.
Last November, Salesforce.com Inc. picked up 262,144 addresses. Salesforce declined to comment. But the company needs new IP addresses to fuel continuing expansion of the data centers that deliver its growing suite of Internet-based business apps.
Microsoft Corp. spent $7.5 million in 2011 on 666,624 addresses formerly owned by the bankrupt networking company Nortel Networks.
The priceroughly $11.25 per addressis what many companies are paying today, according to Sandra Brown, president of IPv4 Market Group, which brokers such sales. Prices are going to rise, she said.
Facebook Inc. took a different tack. The social network moved 90% of its network from the old-school IPv4 system to the next-generation IPv6, which offers a much larger number of addresses.
If we had done nothing for our internal services, then we would not have been able to build new data centers, said Paul Saab, the Facebook engineer responsible for this work. In other words, the breakneck growth of the networks user base would have skidded to a halt.
The volunteer engineers who invented the Internet created 4.3 billion addresses in 1981 as part of the IPv4 specification. IPv4 was the first version of the Internet protocol; there were no versions 1, 2, or 3.
The billions of addresses seemed like plenty at the time. Five regional affiliates took on the job of doling them out, free for the asking, to anyone who could prove a need.
Now those IP addresses are nearly all in use. Only about 3.4 million are available in the American Registry for Internet Numbers, said John Curran, the groups president and chief executive. ARIN manages the about 1.3 billion addresses assigned to North America. Thats about 30% of the world supply. Mr. Curran predicts his organization will stop handing them out by the end of summer.
The shortage isnt as dire as it may appear. The 4.3 billion limit applies to IPv4. But IPv6, approved in 1998IPv5 never caught onallows for a mind-boggling increase in addresses to 340 undecillion, or 340 followed by 36 zeroes, enough to assign an IP address to every atom on Earth.
Companies that run out of IPv4 addresses can upgrade to IPv6 by purchasing new network switches and routers. About 9% of the Internet has done that so far, says Facebooks Mr. Saab.
But the upgrade isnt cheap. Research firm Gartner says a companywide migration costs about 7% of the companys annual IT budget. Companies spent $2.2 trillion on IT in 2014, according to the researchers at Forrester.
Eventually everyone on the Internet will have to make the leap, but businesses with a big Internet presence have an incentive to put it off for as long as possible. Meanwhile, companies that arent ready for the big upgrade must find addresses wherever they can, often from companies that took advantage of early giveaways and got far more than they could ever use.
In January, Amazon.com Inc. bought four million IP addresses from DuPont Co. In February, Microsoft acquired 4 million from Eli Lilly & Co. A month later, it picked up another two million from Xerox Corp.
Merck & Co. has unloaded seven million over several years, according to an analysis of publicly available data by IPv4 Market Group.
Xerox spokesman Sean Collins said his company recently began to identify and free up IPv4 addresses it controls.
No one involved in the deals would say how much the companies paid.
Microsoft declined to comment for this article. But David Huberman, a former ARIN staffer who Microsoft hired two years ago to manage IP growth, said he expects IP prices to remain closely guarded secrets. Buyers and sellers arent going to tell, he said, because in a postexhaustion world, its dog eat dog.
The hot market for IP addresses has made space for smaller operators as well. Last year entrepreneur Elvis Velea brokered $22 million of IP transfers, totaling 2.5 million IP addresses. The Microsoft cloud service is eating up IP addresses like candies, he said.
Mr. Velea got into the Internet business more than a decade ago in his native Romania, buying a fiber-optic link from a local telecommunications company and stringing network cables over his balcony to bring his neighbors online. Now, he sees opportunities to make money transferring IP addresses from the U.S. to Europe and the Middle East, where demand is much higher.
Once ARIN hands out its last 3.4 million addresses, brokers like Mr. Velea will be an important source for many big customers.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
May 13, 2015 09:48:57 #
You are a little out of date. The IPv6 standard was introduced around 1982 as a way of expanding the numbering system. It has been an accepted fact that the IPv4 numbers are running out for almost two decades. By 2011 all major operating systems had the IPv6 protocols built in to them.
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