Why Lease IPv4 Instead of Buying It?

Internet Protocol (IP) addresses were designed to identify each device on an IP network, such as the public Internet, uniquely. An IPv4 address is a 32-bit number divided into four octets (1 octet = 8 bits), so IPv4 offers roughly 4.3 billion (B) unique addresses.

In 1994, the Internet Engineering Task Force (IETF), knowing that IPv4 addresses would run out, began developing a new version of the Internet Protocol: IPv6. While 32-bit IPv4 addressing provides about 4.3 B addresses, the 128 bits of IPv6 provide about 340 undecillion (340 trillion trillion trillion, or 3.4 × 10³⁸) unique addresses. The sheer size of this number is practically unimaginable.

The rising price of IPv4

In 2021, the prices of IPv4 addresses rose sharply, by 35% in one year. A single IP address cost around $25, a price that applied only to blocks of specific sizes such as /19, /20 and /21. The more you buy, the bigger the discount, but prices are not falling: they keep rising with demand and limited supply.

Buying IPv4 addresses

Buying IPv4 addresses is becoming more expensive, so it may not be the best option for SMEs: buying turns the cost of IPv4 into capital expenditure (CapEx) rather than operating expenditure (OpEx). For large enterprises, buying IPv4 may still be affordable, but leasing remains an extra option that brings agility to their business. Either way, buying IPv4 is not like buying anything on Amazon. A careful verification process and an IP transfer are compulsory, so it is better to work with an experienced IP broker. A complete IPv4 transfer generally takes one to two months within one regional Internet registry (intra-RIR), and more than three months between two (inter-RIR).

Leasing IPv4 addresses

Leasing IPv4 is therefore a more effective way for companies that need IPv4 immediately. Today, delegating an IPv4 block from /24 up to /16 can take just around 24 hours. A letter of authorization (LOA) is sent to the client once the IPv4 block is allocated. The lessor also helps the lessee update the WHOIS record at the RIR, register route objects in the IRR and create ROAs in the RIR’s RPKI, so that no one else can hijack the addresses. Finally, the lessor notifies other third-party databases to update the block’s information.

Lease prices have risen quickly over the past few years, but leasing still costs no more than 15% of buying an IPv4 address. This lets clients put their capital into other urgent investments, and the return on that capital offsets the cost of the lease.

With IP leasing, you can get the IPv4 addresses you need to keep your in-house systems running smoothly and stay fully backward compatible in the new era of the Internet. And while you migrate to IPv6, leasing is the perfect way to obtain temporary IP addresses, rather than spending extra capital on IPv4 addresses you do not need.

Conclusion

Leasing IPv4 is easier than buying it, thanks to shorter processing times and lower prices. LARUS manages a large pool of IPv4 addresses that are ready to use at any time. If you are interested in leasing IPv4, talk to our specialists in the chat at the bottom right of this page.

- Written by Jo Cheung, Business Development Specialist at LARUS