At the end of 2019, the US government passed a new bill authorising 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

[news release] 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

Heficed last week launched what the network infrastructure solutions provider is describing as a game-changing platform within the field of IPv4 addresses – the IP Address Market. The platform lets businesses and organisations to monetise their IPv4 address resources by merely listing them, while lessees can easily choose the needed IPv4 addresses and lease them in a simplified and secure way.

The new platform replaces what was Heficed’s main product, Switch, aims at increasing transparency of the IPv4 market space, and it starts with transparent pricing.

“Our new platform will offer a transparent way of monetising and leasing IP addresses,” said Vincentas Grinius, CEO of Heficed. “IP registrants do get charged a commission fee, but it is always visible what percentage goes to them, and what part of the price is the commission. Those listing their resources are only charged when a transaction is successful.”

Currently, the Internet is experiencing IPv4 address shortages. Most of the Regional Internet Registries (RIRs), the entities governing IP address allocation processes in different continents, have exhausted their pools of IPv4s to allocate.

IPv4 addresses, originally a free resource, have become a commodity and a strategic asset for businesses because a single IPv4 address in the second-hand market now costs around twenty dollars. However, the market is hardly regulated and scattered throughout countless IP address brokers, leading to murky practices and pricing.

Users of Heficed’s IP address market are able to set their listing price, but the platform will suggest a likely price range, too, which is based on the current market situation. This way, Heficed hopes to level the playing field for everyone having IPv4 resources to lease, empowering organisations that have pools of unused IP addresses but lack the know-how or time to monetise them.

Only organisations can do business on the IP Address Market, and this is one of the anti-abuse safeguards present within the platform. Additionally, entities joining the platform will go through the verification process. Before being approved for listing on the platform, the ownership of each IP address is also verified – either with RPKI (Resource Public Key Infrastructure) or LoA (Letter of Authorisation). A dedicated Abuse Management team works to ensure no IPv4s are being misused for spam or over illicit activities, while Halon and Abusix are used as anti-spam filters. If a user wishes to use the IPs on their own infrastructure, they will only be able to do so with pre-approved IP transit providers who support RADb.com.

“Organisations using our platform can rest assured their IPs will remain clean while they are on our network,” added Grinius. “Preventing the abuse of IPs is our priority, and we have taken extensive measures to protect the resources of our clients. The abuse report system is present and straightforward to use, while we are transparent about our reaction time when reacting to abuse or spam reports.”

The new platform is open for IP address brokers to list their resources, too. While the brokers are selling the IPs via their own channels, they can also list the same resources on the market and lease it for a specific time to make extra commissions.

For more information on the Heficed IP-Address Market, click here.