Microsoft has offered to pay bankrupt telecoms firm Nortel £4.7m for older versions of net addresses:
It was predicted that a market in IPv4 would appear amongst companies facing a costly migration to the newer IPv6 and following this, 666,624 IP version 4 (IPv4), net addresses were put up for auction as part of the sell-off of Nortel’s assets at the end of March.
If this sale goes through (as is expected), Microsoft will get hold of some 470,016 IP addresses instantly, with the remaining 196,608 being released to former customers of Nortel as they move to other telecoms firms. The question remains however, what is Microsoft planning to do with the IP addresses?
With the last big blocks of IPv4 addresses handed out in February and these expected to be used up by late 2011, it has become apparent that blocks of IPv4 are becoming more and more valuable as the pool of this generation of address comes closer to running dry. Will Microsoft use the IP addresses internally or will they look to sell them on at a profit as they become an even rarer commodity? For now it is difficult to say, but the speculation and interest in Microsoft’s purchase will only increase.
IP addresses are used to identify individual computing devices on the Internet and private networks, and IPv4 allows for a maximum of 4.3 billion devices – this number seemed enough in the early 1980s when the standard was first proposed, however the rapid growth in personal computers, smartphones, tablets and other internet connected devices over the last five years means that addresses have been rapidly running out.
Net firms are, and have been in the process of moving to version 6 of the IP addressing scheme for sometime now. IPv6 offers more than 3 undecillion individual numbers (3 with 38 noughts), of addresses, however, the migration is happening rather haphazardly and slowly at present – in the interim however, it is expected that IPv4 addresses will become increasingly valuable; could this herald the start of an IPv4 black market? Far fetched some might say, but equally, it’s not out of the question…
As mentioned, it is not completely clear why Microsoft wants to buy Nortel’s supply of IPv4 addresses, however, with many companies keen to avoid the immediate cost of changing their networking systems over to IPv6 compatible equipment during these economically fragile times, cost could certainly be one of the key reasons.
There are three options open to companies when it comes to IPv6 migration and uptake: First, there is the option of doing nothing and waiting to see what happens when all IPv4 addresses and capabilities are exhausted. Secondly, to invest in new technology that enables compatibility between IPv4 and IPv6 equipment, and thirdly to completely rip and replace IPv4 technology for new specifically designed IPv6 technology – costly to say the least.
The Microsoft-Nortel deal values the IPv4 address blocks at £7 each, higher than the price many firms charge for a ‘.com domain’ – a clear indication that the market for IPv4 addresses is heating up. Registries are overseeing the allocation of net addresses and also working on plans for a re-location system that will take IPv4 addresses from firms that are using IPv6 and release them for use by others.
One way or another, IPv6 is on its way, and sooner or later it will have to be adopted by all – it will no longer do to bury our heads in the sand. The sooner companies come to terms with this and take the appropriate measures needed to adopt IPv6, the more prosperous they will be in the long term.