Peter Newton, Director of Product Management, Business Products, NETGEAR, focuses on the computer networking, security and wireless needs of business customers.
It has been widely reported that addresses for the current version of the routing used on the Internet have recently run out. IPv4 has been the standard for connecting computers, servers and networks on the Internet for decades. As new devices connect to the Internet, service providers or companies have always been able to issue new IP addresses to enable them to join. The limited size of the IPv4 address pool has been known for some time, which has lead to the creation of IPv6.
IPv6 is the next generation of routing and offers many improvements over IPv4, including a virtually unlimited number of addresses. Unfortunately, there exists a huge installed base of networking equipment that is not capable of communicating via the IPv6 protocol. As reports of the exhaustion of IPv4 addresses sound the alarm about a coming catastrophe, let’s examine the issue and how it will impact small and mid-size businesses. Will this be another Y2K issue that is widely viewed as a mountain but ultimately turns out to be a molehill? Or will this be the end of network communication as we know it?
What does it mean that IP addresses have run out?
IPv4 addresses are allocated by the Internet Assigned Numbers Authority (IANA) which hands blocks of addresses out to Regional Internet Registries (RIR), who in turn provides them to service providers and end user organizations. Service providers then give them to their customers. What has recently happened is that the IANA has given out its last block of IPv4 addresses. Keep in mind that there are still millions of IPv4 addresses available at the lower levels, so this is not an immediate threat. However, we have passed a significant milestone on the path away from IPv4 and we should be clear that eventually everyone will need to shift away from IPv4 to IPv6. The only issue is how fast that transition will take place and how painful will it be.
How does this affect small and mid-size businesses?
The reality is that it should have almost no impact in 2011. Most businesses use a router that provides Network Address Translation (NAT) capability that takes a single or limited number of external addresses and creates as many internal addresses as the company needs. Since these companies can create as many internal IPv4 addresses as they need, they can continue to hire and expand their infrastructure as needed. Looking further into the future, these businesses will need to be able to accommodate external IPv6 addresses. During this transition, these businesses can continue to operate internally on IPv4 as they manage their infrastructure to shift to IPv6.
Who will the winners and losers be in this transition?
In the short term, service providers will feel the most pain as they need to procure more IPv4 addresses and convert their install base of modems and networking gear to IPv6 capable gear. Even with all of the IPv4 addresses being assigned, only a small fraction are actually in use. It is reported that only 14 percent of issued IPv4 addresses are in use, which leads to the possibility of a market being set up for those who have excess addresses to sell to service providers that need more time to transition to IPv6. However, that will only be a stop-gap measure to buy time. The winners in this transition will be those companies that take a forward leaning strategy toward IPv6 implementation, purchasing gear that is both IPv4 and IPv6 capable. These dual-stack products will simplify the transition when the time comes. More importantly, it will enable those companies to select the right time for them to make the change. The real winners of this change will take advantage of the latest generation of networking gear to improve their efficiency and operational capabilities, giving them an advantage over their slower competitors.
What are the opportunities in this transition?
The transition from IPv4 to IPv6 does share some similarities to the Y2K bug -- companies will need to put in the effort and spend the money to bring their systems up to specification. However, the two differ more than they are similar. The transition to IPv6 is not a potential issue, but a guaranteed reality. We will eventually completely run out of IPv4 addresses. More importantly, the IPv6 transition is not the ticking time bomb with a hard deadline. Companies will be able manage their transition from IPv4 to IPv6 with NAT translation and dual-stack capable equipment to create an orderly, productive shift. Also, companies will be able to upgrade their networks to the latest speeds and capabilities within their CAPEX budgets and take advantage of new capabilities. Businesses that move fast and embrace the future will take the lead over their competition and potentially deliver long term gains.
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