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The IP Address Panic of 2015

What if the U.S. telephone companies suddenly ran out of phone numbers? What kind of panic, if any, would it cause?

Though nowhere near as dramatic, that was somewhat the situation facing many North American companies in the summer of 2015…mostly large technical companies that rely on the Internet and networks to survive.

But it wasn’t telephone numbers that had some people worried. The numbers we’re talking about are known as IP addresses (“IP” for “Internet Protocol”). And for decades they were readily available and handed out in bulk (allocated) to big companies (business, government and technology) that needed them for their networks…or for their customers.

Your Internet Service Provider (ISP) was one of those organizations. They let you borrow one of their IP addresses so you could connect to the Internet. You and everyone else in the world.

There seemed to be plenty of IP addresses for everyone. Nobody expected that the world would some day run out of them.

How did that happen?

The IPv4 address format that was supposed to last forever didn’t make it past 2015 (a typical address looks like this: 198.51.100.40. IPv4 was the IP addressing protocol that virtually every Internet-connected device used to connect to the Internet: desktops, laptops, smartphones, printers, scanners, iPads, tablets, gaming devices and more.

And that was the problem. All the addresses were gobbled up—all four billion of them. According to The Wall Street Journal, Asia ran out of IP addresses a few years ago. Europe was right behind them by a year. North America (the U.S., Canada, Mexico) was next.

A lot of the CEOs and boards of directors have been asking their IT departments, “What happened?” This is big news for big companies, especially technology companies with large numbers of business customers and others with consumer-customers. Although IPv4 networks are the backbone of the Internet today, any company that is hoping to grow, increase its services, increase its customer base or expand its horizons is in trouble if:

They will be requiring more IP addresses to assign to devices they own

They haven’t been planning ahead for this

The number of IP addresses that companies may need isn’t in the tens or hundreds range…it’s in the high thousands—large numbers because the companies needing them are big and they realize this is the end of getting available IPv4 addresses.

Get ’em while they last.

Here’s how a couple of those large companies took care of their IP address requirements as the IP drought approached:

Salesforce.com has an aggressive goal to expand its business. They realised they would need more IP addresses for their new data centers that deliver its ever-growing suite of Internet-based business-to-business applications. In November of 2014, Salesforce.com acquired slightly more than 250 million IP addresses…although even the WSJ didn’t report on how they did it or where the IP addresses came from.

In 2011, Microsoft spent $7.5 million on almost 670,000 IP addresses, which had been previously allocated to a networking company (Nortel) that had gone bankrupt. The math works out to a little more than $11 per IP address.

About Facebook.

There were plenty of companies that had been looking ahead and had taken measures to be ready for the IP shortage. Facebook was one of them.

According to the WSJ, Facebook transitioned the majority of its networking to IPv6, which offers a virtually unending number of new IP addresses. As one of Facebook’s IT executives said, if they had not been prepared, “We would not have been able to build new data centers.” Business translation? They would have been in a bad position in terms of business growth, unable to strive for their goals, due to the IP address shortage.

The truth of the matter comes down to this: Sooner or later the Microsofts of the world—the large technical companies who aren’t fully ready for IPv6—will have to face the music, and the high costs, of fitting the transition to IPv6 into their IT budgets.

And that will be the price to pay for waiting until the last minute.

The IPv4 Address Shortage Problem Has Arrived

How Many IP Addresses Are Left? Almost None.

When a company like Microsoft starts running into some technical problems with IP addresses, you know that trouble is brewing. In early 2015, a network expert at Microsoft said to an audience at a vast networking industry conference, “We’ve been having a hard time.”

The problem seems to have somewhat crept up on them. What is it? The dwindling supply of the common everyday IP addresses that have been around for decades.

It was going to happen someday.

Nearly all the IP addresses in use today are IPv4, for “version 4.” The number is a unique code the Internet uses to connect us all. Your IP address identifies both the type of network you’re part of as well as your individual “host” or computer. Every computer that’s online at any one time has a unique IP address. (The exception is small home networks that share the router’s IP address; however, all the individual computers still have a unique connection number.) There are four parts of IPv4 that compose this address. As we transition to the future IPv6 address, which includes eight parts, the ability to accommodate more devices and enhanced security features will become increasingly important.

If you are on the “WhatIsMyIPAddress.com” home page (MyIP), you’ll see your current IP address. It can change depending on whether you’re connected at home or some other location.

In any case, years ago the IP addressing system was set up to accommodate millions of IP addresses that might be needed one day. In fact, there are today about 4.3 billion IPv4-type IP addresses throughout the entire world.

But the Internet has grown—or rather, exploded—over the past 30 years, perhaps far more than anyone ever expected. And now, some experts are predicting that the number of new available IPv4 addresses could dwindle to nothing as early as this summer.

Think of it like the telephone numbers system in the U.S. decades ago, before there were prefixes and area codes. At one point, phone companies realized that they would soon run out of phone numbers, so they created the area code concept to solve the problem. Today, new prefixes are still being introduced to handle all of the numbers needed.

That’s pretty much the same thing for the Internet and the IP addresses we all need if we want to connect—except that the solution isn’t as simple.

Supply and demand.

Microsoft ran into a problem with “private IP addresses,” which are special addresses that were set aside for companies to use for internal networks. A company like Microsoft can use the same IP address for different company networks and still connect hundreds of computers with no problem.

Millions of these private addresses were set aside in the mid-1990s, but no one could have predicted all the technological advances that would soon begin to drain that supply of private addresses. It caught Microsoft by surprise—their growth in cloud technology and other business products and services gobbled up the available private addresses that had been allocated.

It’s time to be proactive.

Of course, Microsoft isn’t (and won’t be) the only company that will have to address this issue. Facebook had a similar issue with private IP addresses, but they decided to transition to the future of IP addresses—IPv6. That’s the next generation of Internet Protocol addressing, which will supply an incredible number of IP addresses for the entire world.

According to a report in The Wall Street Journal, Facebook “outfitted its public-facing website for IPv6 at an expense that…could cost 7% of most companies’ IT budget.”

And now that’s what Microsoft is deciding to do. The person in charge of IP addressing for Microsoft said, “…we moved into the action of making the shift from IPv4 to IPv6 so that we didn’t run into problems internally or externally.”

That’s the right thing to say for a company that’s 1) supposed to be a technology leader and 2) experiencing some embarrassing technical difficulties. However, talk is cheap and implementing IPv6 isn’t, which is likely why they’ve delayed making it a company-wide initiative.

Along the way, however, that solution may cause some problems and headaches.

Everything runs on IPv4.

Any device that connects to an Internet-connected network needs an IP address, and for almost all companies, those IP addresses are still IPv4. For a large company like Microsoft, that means there are thousands of devices they own worldwide that would need to be converted to the new protocol…eventually.

But until all those devices are replaced by new ones configured to IPv6, they’ll continue to be connected by the IPv4 protocols. And if Microsoft’s growth requires them to add more devices, it’s likely they’ll want to use the new IPv6 protocol and not the older version.

Overall, it simply means that “someday” has arrived. As a network architect at Microsoft said at a recent World IPv6 Forum conference for networking engineers, “I’m only interested in IPv6 because I am tired of people trying to get IPv4 addresses out of me that I don’t have.”

Source: The Wall Street Journal, Corporate News, May 20, 2015