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2014 IPv4 Market in Review

Published on January 5th, 2015

Well, another year has gone by, and ARIN has not run out of free IP’s! In my 2014 year end review, I will begin by talking about ARIN runout, summarize the transfer markets and pricing, and close with projections on the future for the transfer market.

ARIN’s continuing free supply is relatively good for companies in need of IP’s and relatively bad for sellers. The end of free IP’s is fast approaching however, as shown in the graph below.

I decided not to create a complicated model of run out as there are so many factors that could change the date of exhaustion. The simple linear trend between June and December of 2014 suggests that, if the same straight line continues, ARIN will run out on July 23, 2015. The reality is that there will probably be some large request that creates a large blip toward depletion. Also, some requests for large blocks will exceed available supplies at some point, and supplies may not go exactly to zero at the end as the final IPv4 policy clicks in.

The IPv4 markets were active in 2014:
• 3.75 Million IPs were transferred in APNIC region

• 9.8 Million IP’s were transferred in RIPE Region

• 3.0 Million IP’s were transferred in ARIN region through the end of October, with 2.1 Million of these between Merck and Amazon.

One trend we have seen throughout 2014 is a decline in prices to $7 to $8 per IP for a /16, as ARIN region sellers get tired of waiting for a free market to form in ARIN region. Neither APNIC nor RIPE regions have seen this trend as strongly, as their supplies are lessening. Offsetting this is anticipation of inter-RIR capability pressuring prices.

The ARIN region price decrease, I believe, is caused by continuation of the free pool dragging on, with the long promised ability to sell IP’s making sellers anxious. Some sellers are now unloading at prices lower than they originally planned. My advice to buyers is to buy now, because once the ARIN market demand begins, those anxious to sell will dwindle, and prices will again rise to a range in the neighborhood of $10/IP for a /16 in ARIN region.

After ARIN initially rejected the RIPE NCC inter-RIR transfer policy due to lack of compatible needs justification requirements, the RIPE NCC has put forward a new version to allow ARIN region IP’s to be transferred to RIPE region. It is expected to be passed in 1Q15. This should result in price equalization throughout RIPE, APNIC and ARIN regions.

There is no end in sight for the IPv4 market. IPv6 adoption is insignificant by any measurement at this time. The percentage of users that access Google over IPv6 is at 5.34% (Reference http://www.google.com/intl/en/ipv6/statistics.html#tab=ipv6-adoption). The World IPv6 Launch organization presents that only 13.7% of the top 1000 websites are accessible using IPv6 (http://www.worldipv6launch.org/measurements/). The AMS Internet Exchange sees an average of only 0.8% of traffic through the exchange on IPv6. This surely implies an IPv4 market which may last at least 10 more years.

In summary, while prices have fallen in 2014, we expect them to rise in 2015 as ARIN runs out of free IP’s. As shown in the charts, transfers increased in all three regions, and we expect these increases in demand to continue, and for this increase in demand to also support higher prices.