Amazon applies a fee to those who use IPv4 addresses: what is it?

About six months ago, the leaders of Amazon Web Services (AWS) had announced the imminent introduction of a fee linked to the use of IPv4 addresses, in any of the many services offered and supported by the cloud provider. The company explained that IPv4 addresses are increasingly scarce and difficult to manage: the cost of acquiring a single public IPv4 address has increased by more than 300% in the last five years.

So, starting this early February 2024, AWS will begin to charge $0.005 (half a cent of a dollar) every hour for each single IP used. Only public IPv4 addresses are affected by the news, regardless of whether they are connected to a service or not. At the same time, Amazon urges its customers to accelerate the migration to IPv6.

Let’s do the math in Amazon’s pocket: how much the application of the new tariff is worth

The half cent of a dollar requested as a donation by Amazon may seem like a small amount. Calculator in hand, however, it comes to $43.80 per year for every single IPv4 address used within the Amazon platform.

Border0, however, wanted to delve deeper into the issue by estimating how the price change will impact Amazon’s global revenues. By processing the data relating to the number of IP addresses managed by Amazon and available by carrying out a few queries on them servizi WHOIS of the five regional IP address registration organizations in the world, the company led by Jeff Bezos is found to have nearly 132 million IPv4 addresses.

Since these addresses are in high demand and, at the same time, very scarce, it is reasonable to assume that a large part of the 132 million are actually used by customers.

By combining this data with the information shared by ipv4.globalwhich reports $35 as the average price of a single IPv4, the value of the addresses held by Amazon can be quantified in 4.6 billion dollars. An enormity.

It is therefore possible to estimate a additional income in AWS coffers of over $1 billion over the next year. The calculation comes from a conservative estimate that 30% of IPv4 addresses are used by paying customers.

Why should Amazon AWS users move to IPv6?

As we have often observed, IPv4 is a scheme of 32-bit addressing, therefore limited to 4.3 billion unique addresses. This “treasure” is no longer sufficient to manage the vast number of devices simultaneously connected, on a global scale, to the Internet. Just think of the explosion, in terms of diffusion, of mobile devices and devices for the Internet of Things (IoT).

Created in 1998, IPv6 implements 128-bit addressing to provide, overall, 2128 addresses. This is an immense quantity of IPv6 addresses, capable of satisfying current and future needs. Just reflect on the fact that for every single square meter of the earth’s surface, as many as 660,000 billion billion IPv6 addresses become available; in the case of IPv4, just 7 addresses are available for every million square meters.

For this reason, AWS does not charge an hourly fee for the use of IPv6 addresses and provides users with a set of tools to control where they can be used as a replacement for traditional IPv4.

To confirm how rare and important IPv4 addresses are, in October 2023 we published the news of the conviction suffered by an entrepreneur who had requested approximately 735,000 addresses without having any title.

Opening image credit: iStock.com – Peter Hansen

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