IPv6-only hosting far off; a market for IPv4 addresses is sad, but likely

As has been predicted for years, the world is running out of IPv4 addresses. The Internet Assigned Numbers Authority (IANA), which manages global IP addresses, doled out the last five /8 blocks of IPv4 addresses in February to the five regional internet registries. Those regional registries are expected to run out soon after — indeed, APNIC, the Asian registry, are have already changed their policies to restrict allocation from their final /8 block. So what happens now?

Well, there are several possibilities, but our prediction is that

a brand new market will spring up in second-hand IPv4 addresses. Like the Wild West, it’s going to be lawless and unpredictable for a bit — and sadly the profits will go to the current IPv4 address hogs.

IPv4 exhaustion: a highly predictable surprise

The first thing to say is that the expiry of IPv4 is hardly a surprise: we’ve known it was doomed for a long time. The whole of IPv6 was developed to deal with the problem, with a giant 128-bit address space that simplifies routing. Indeed, IPv6 is the only long-term solution. The problem is that moving everyone to IPv6 isn’t simple. IPv6 isn’t backwardly-compatible with IPv4, and plenty of hardware still only supports IPv4, so companies will have to run both in tandem for a while. Rather chillingly, IPv6 still only accounts for 0.03% of the Internet’s traffic.

IPv6-only hosting: not useful yet

So, as a website owner, what can and should you be doing?

The sad truth is that it makes no sense for you to move your website from IPv4 to IPv6-only at present.

The problem is that as a website owner, you want to reach the largest possible audience for your site. This means that you will have to continue to run an IPv4 version of your site for as long as there are significant numbers of viewer with IPv4-only connections to access it. Which there are at present, and will be for years to come until every broadband provider has upgraded to IPv6. So, you’ll need an IPv4 address for your website and ElasticHosts will continue to provide IPv4 cloud servers for quite some time to come.

What we do plan is to introduce IPv6 support so that you can run IPv4 and IPv6 versions of your site in parallel. This parallel approach works for most but not all website viewers today. This coming Wednesday’s World IPv6 Day will highlight broken networks for fixing, hopefully making the parallel approach practical. However, very few customers will be able to switch to IPv6-only. In fact, we expect IPv6-only to start on the access side, with Carrier Grade NAT. This works since many broadband users only connect out to the web, which can work via IPv6 to IPv4 translation, but do not need the rest of the IPv4 web to be able to connect back to them.

Once IPv6 access is sufficiently widespread, only at that point will IPv6-only hosting start to make sense

Market in IPv4 space: sad but likely

Since you will still need IPv4 addresses for your website for some time, cloud hosting providers like ElasticHosts will have to continue to provide these for you. There are large numbers of unused IPv4 addresses, as earlier in the Internet’s history large companies were given address ranges that they didn’t fully use. With no IPv4 addresses left for allocation, high demand, and large numbers of unused but allocated addresses, these will surely be recycled.

We at ElasticHosts would love to see unused addresses simply reallocated to others. There are have been some generous moves, such as when Stanford returned a /8 block for reallocation. And perhaps the central registries could get tough and forcibly reclaim unused space, or start making annual charges per IP for allocated space to encourage returns. However, sadly and realistically a brand new market in second-hand IPv4 addresses is what we at ElasticHosts expect to see.

The first signs are already visible.

In March, Microsoft bought more than 650,000 IPV4 addresses in Nortel’s liquidation sale. Microsoft paid $7.5 million for these, or a remarkable $11 per IP address. When this market becomes more mainstream, the prime beneficaries will be the current IPv4 hogs, which is a sad state of affairs! We would love to see more voluntary returns of unused space, registries making forceable reclaims or even a registry charge on IP space to incentivise hogs to return it. Sadly, this isn’t what we expect.

There are difficult and testing times ahead for internet infrastructure — like the Wild West, new markets are not the most comfortable places to be. Nonetheless, we at ElasticHosts are monitoring the evolving situation carefully for our customers, will continue to provide IPv4 addresses for everyone who needs one, and will be introducing IPv6 options for you to run in parallel with IPv4. Rest assured that we will continue providing the scalable, usable cloud servers that you love!