Microsoft spends $7.5m on IP addresses | Hacker News Reader

Microsoft spends $7.5m on IP addresses

theregister.co.uk

49 pointsparan40 comments

How can Nortel sell something they do not own?

http://en.wikipedia.org/wiki/IPv4_address_exhaustion#Markets...

"The concept of legal "ownership" of IP addresses as property is explicitly denied by ARIN and RIPE NCC policy documents and by the ARIN Registration Services Agreement. It is not even clear in which country's legal system the lawsuits would be resolved."

These are "Legacy" IPv4 addresses, that were allocated before the formation of any RIR

So, $7.5 million for 666,624 IP addresses. Now the question is, how much is the 16,777,214 IP addresses that Apple owns worth? (Apple owns the entire 17.0.0.0 Class A subnet) Was this factored into Apple's valuation?

I would love to hear the story behind how Apple got the 17.0.0.0 subnet.

I have no idea, but I think it is even more ridiculous that Ford Motor Company has 19.0.0.0 At some price, I am sure Ford would be willing to sell, but I am not sure it would be worth the hassle for $150M.

If you want to be optimistic you could carry a /8 on your books at ~$150M. That's a drop in the bucket for most companies that hold /8s, so it's probably not worth arguing about.

The legacy class As were given out by Jon Postel just for asking; if you would ever need more than 256 subnets then a class B wouldn't be big enough so you got a class A.

HP has both 15/8 and 16/8, the latter originally from Compaq. You can see the other "legacy" allocations here:

http://www.iana.org/assignments/ipv4-address-space/ipv4-addr...

Nicely tabulated http://royal.pingdom.com/2008/02/13/where-did-all-the-ip-num...

the story is "they asked for it and were allocated it under the allocation rules at the time". pre-CIDR, you could get a class A, B or C (mostly), and a class-B isn't /that/ many IPs for a large and growing company when effectively no one else used the Internet at all.

It could be an investment on the formation of a black market, or insurance against the exhaustion of the IPv4 space. Now, since they make the IPv6 stack of the most popular desktop OS in the world, I'm not sure what this means.

Microsoft probably spends $7.5m on toilet paper too. They're a large company. Is this really that big of a deal?

There's something missing in this article. Why do Microsoft need all these IP-adresses? I'm sure someone here can give me a clever answer.

I'm guessing it's related to their cloud offering. The ability to have a big pool of IP addresses that they can offer to people using their cloud means they don't have to ration them quite as strictly. Amazon already limits you in the amount of elastic IPs that you get out of the box (you can request more http://aws.amazon.com/contact-us/eip_limit_request/ but you need to fill out a form). As things get more scarce, this could become a much bigger issue. Microsoft is hoarding early so that when things really get tight, their users don't have the same pressure.

What about IPv6?

How many ISPs and consumers are set up to use it? I think it's still a while before IPv6 will be viable.

The one I work for is. The one that provides my cable modem is too. I don't know how others are, but if those two are, I should assume it's more common than you think.

I think strategically it's a wise move. For MS 7.5m is a small sum. In case IPv6 will not be deployed at the speed we all want their investment will pay off tenfold because IPv4 addresses will be gold. They try to hedge the address exhaustion risk.

They probably can measure the adoption of IPv6 from the usage data Windows desktops volunteer back to MS. That said, I would guess they predicted (at least in March) a scarcity of addresses for their cloud offering before IPv6 becomes widespread.

One company sold an asset to another company, and kept normal records of the sale. I don't consider that the "black market." It's just the natural secondary market. (Yes, I'm only making a semantic distinction, but I think it's misleading to use the same term to refer to, say, the cocaine economy and the above-board sale of IP addresses.)

I think the implied point in the article is that in this case Microsoft and Nortel had to disclose the sale details, but in most other circumstances, the would not have done that. It seems that the author implies that this sale is an indication that a black market is forming, not that this was a black market transaction.

The sale was a part of the normal economy. One company paid another company for something, and the sale was recorded in their books. The "something" is not illegal. The term "black market" is usually reserved for transactions that happen outside of the regular economy, usually because they are illegal.

The powers that be have been saying for about 20 years that IP addresses are not assets, cannot be owned, and cannot be sold. That's why people are talking about black markets.

It's not clear if IP addresses are 'assets'. The only thing keeping Microsoft from picking up IPs arbitrarily is the fact that their BGP peers will blacklist those ranges if they do something disruptive like that. If ARIN or the IANA declares the transfer invalid... well, who knows what will happen?

From March. It is a little curious that MS is buying something that ARIN is giving away for free.

Microsoft bought 666K addresses. How many addresses does ARIN even have now, and how likely are they to assign such a large block to a single entity at this point?

Zero, and thus zero. No more IPv4 addresses exist; anyone wanting a new block of them would have to get them on the secondary market like this.

Edit: I stand corrected; while the root IPv4 namespace has no more available addresses to distribute to the regional registries like ARIN, the regional registries themselves still have some addresses left.

ARIN has 5.7 /8 equivalents, or 95M addresses available. Their policy is (roughly) to satisfy any requests where the addresses will actually be used in the near future ("50% utilization rate within one year").

http://www.potaroo.net/tools/ipv4/index.html https://www.arin.net/resources/request/ipv4_depletion.html https://www.arin.net/policy/nrpm.html#four

Hmm, that is interesting. I'm surprised that ARIN has that much available at this point.

How does one go about acquiring IPV4 addresses as an investment? Thoughts on viability of ROI?

Bad ROI. For Microsoft, this is more like insurance. Pay now a little to avoid a potential, small probability, high future loss.

http://www.hbs.edu/research/pdf/12-020.pdf See graphs on p. 10. Discussion: http://thread.gmane.org/gmane.org.arin.ppml/14144

Hopefully whoever/whatever has my old Nortel IPs has better luck that I did - redundant Nortel Engineer.

Posted back in march?

This is artificial scarcity for you. Numbers. They're paying millions of dollars for a set of numbers.

This sounds clever but actually bespeaks a lack of understanding what an IP address is. Microsoft didn't buy a "set of numbers"; they bought the rights, previously secured by another company, to insert prefixes into hundreds of thousands of routers operated (at galactic levels of expense) by hundreds of companies around the world.

So they're paying for the rights for other people to access their systems via a set of numbers. And how is that not making arbitrary numbers artificially scarce and collecting payment for them?

IPV6 really can't come soon enough.

FIB sizes in core routers (operated at great expense by people you do not pay) are not an artificial scarcity.

IPv4 was designed in the early 1980s. Are you saying Cerf et al. made IP addresses only 32 bits so they could cash in 30 years later? Or are you saying that almost all ISPs are delaying IPv6 so they can cash in (fairly small amounts of money) on IPv4 addresses?

I guess I'm making a more broad statement that IP addresses are rare when, once we migrate to IPV6, they will be free, so we should migrate asap.

They won't be free. They're not just numbers.

Why is this on the front page of Hacker news when the article is from march?

Because it's new to somebody (sigh).

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