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Is There a Positive Business Case for IPv6? We Are About to Find Out, If You Help Us…

Marco Hogewoning

Large-scale IPv6 deployments suggest that IPv6 is at least a technical success, the technology works. Time to visit the other important question: does it work commercially. Does IPv6 really come with a positive business case? We are about to find out, if you help us...

The Internet technical community has spent about two decades making IPv6 work on a technical level. We have developed the protocol, modified and expanded a few others; we set up the registry system and distributed the addresses. In addition, over the last 10 years we have invented pretty much any possible way to encapsulate or translate IPv6, making it easier to integrate with the IPv4-based world we still live in. And we have succeeded: when in Belgium, there is about a one-in-two chance your Internet connection supports IPv6; on a global scale, Google (on a good day) sees one-in-eight customers connecting via IPv6.

Are we done then? After all, we can show that IPv6 works, even on a massive scale with millions of users. We have written all the documentation there is to write, we have educated and trained all of our colleagues and even created awareness outside of our own community about the need to transition the Internet to use IPv6. Meanwhile the IETF has already taken steps to investigate and discuss the consequences of the inevitable "shutdown" of IPv4. All we need to do is sit back, relax and wait for the IPv6 transition to complete, which is just a matter of time.

Or is it?

As part of my job, I spend a lot of time talking to people about making the Internet better, and the need to deploy IPv6 is part of that conversation. I have had such talks with small operators who came seeking some more IPv4 addresses. We have had similar talks at the highest level of the United Nations, where the question on the table is about getting the rest of the world connected. Lately, with the Internet of Things at the top of the expectation curve, talks have shifted from connecting people back to connecting machines, and again IPv6 is flagged as a basic requirement to make it all work.

"Why haven't you enabled something on IPv6 today?" I am paraphrasing here, but essentially that is the question we mostly struggle with today. The awareness is certainly there and there is, with a few exceptions, quick agreement that IPv6 is the only way to continue expanding the Internet and protect the values we all cherish so much. Yet in many countries and countless networks there are few if any signs of IPv6 use.

Why are you not deploying IPv6? We can pretty much rule out technology. We can show cases with millions of users active on every mainstream technology out there. If IPv6 works for them, why doesn't it work for you? The other thing often cited is business risk, for instance an increased level of support calls. Admittedly all new beginnings are hard and while it might be proven technology, you still need a solid plan for your IPv6 roll out, which should include lab tests and a slow start to be able to handle any unforeseen circumstances. But the bottom line is, if one-in-eight visitors to Google use IPv6, it certainly can't be that bad. If IPv6 were that fragile, I would probably not be writing this article, but more likely be out somewhere explaining what went wrong.

That leaves me with the most commonly cited reason: money. Just as with any other change, there is always some cost involved. Any well-thought-out plan takes time to write; test and implement. And you probably won't do it for free. Which leaves the question: how much does it cost to deploy IPv6? That is a really tough question to answer, and there is hardly any reliable data available that can help us.

From what is available, it seems unlikely that there is a correlation between a country's economic performance indicators (such as the GDP) and the level of IPv6 deployment. Certainly we see a higher IPv6 adoption rate in the developed world than we see in the developing nations of the Global South. But there are outliers there, especially in South America. Even within the European Union there is a large difference between adoption levels in countries, and it doesn't line up with the size or strength of economy.

At the carrier level it is near impossible to determine the actual operational and capital expenses that are involved. Such figures in general are considered company confidential and all I can say is that I am not aware of any publicly-listed company detailing the costs in one of their annual or quarterly reports. Which makes me think it can't be that high. Those operators who have deployed IPv6 at a large scale are still all in business and are still accountable to their shareholders, so I suspect that a positive business case can be made.

Others have tried this in the past, but what we can do is create an estimate of the cost of not deploying IPv4. After all, we have a rough indication of how much IPv4 addresses are traded for in the secondary market (around 10 USD). And we can take an educated guess on the cost of sharing such an address among multiple customers using a NAT (which on a very conservative estimate over a 3-year period is also about 10 USD per customer). Judging by the transaction volume of IPv4 transfers, for a lot of companies these costs are manageable from a business case perspective. Arguments that expanding business on IPv4 is a short-term affair and not very future proof notwithstanding, the fact that these transactions are taking place is a firm signal that there still appears to be a business case for IPv4.

As part of this year's inter-sessional work for the Internet Governance Forum (whose 2016 event will be held in Mexico this December), a group of volunteers has picked up the daring task of trying to describe the commercial and economic reality that underpins a successful deployment of IPv6. As part of the project to document IPv6 best practices, we are hoping to gather some input on the costs and (hidden) benefits of IPv6 deployment that lead to a positive business case and that will convince the product managers and boardrooms who are now stuck with the challenge of expanding their business using a finite and very much exhausted resource, to deploy IPv6 within their products and services.

Can you help us? Share how you make IPv6 work in a competitive market, share the arguments behind your business case — maybe it was just a matter of your competitor deploying it? Even if you haven't deployed IPv6, please share your arguments or business case, as this would also help us to gain insight in what is happening here.

More information about the IGF Best Practices Forum will soon be posted from where you can also subscribe to a dedicated mailing list. Of course, at the RIPE NCC, we are also happy to collect and take forward any feedback you might have.

By Marco Hogewoning, External Relations Officer, Technical Adviser at RIPE NCC
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I'd say the business case is simple: Todd Knarr  –  Jul 07, 2016 11:15 AM PST

I'd say the business case is simple: do you want to stay in business long-term?

IPv4 addresses are exhausted. At ARIN there are 363 requests for IPv4 address space waiting to be fulfilled, and at RIPE they're on the last /8 and the most any entity can get is a single additional 1K block. I expect that it's going to start to be more and more expensive to get capacity in data centers with IPv4 addresses assigned as data centers exhaust locally-assignable addresses and prices on the secondary market go up with increasing demand. Even if that doesn't hit you directly, or if it makes business sense to you to pay for the addresses, what happens when the entities (consumers, vendors, other organizations) you need to connect with *don't* consider the extra cost worth it? And remember that this is asymmetric: an IPv6-only shop can communicate with an IPv4-only destination with a simple translating gateway that works similarly to NAT, but an IPv4-only shop can only initiate connections to an IPv6-only destination if the IPv6-only end sets up a considerably more involved inbound gateway. I wouldn't bet the company on other people being willing to do that for me unless I planned to not be on the Internet for more than another 2-3 years. Better and less expensive to get IPv6 working now while it can be done at my pace than to wait for a crisis situation.

Tentative conclusions Ross Chandler  –  Jul 07, 2016 11:52 AM PST

As the article suggests we can tentatively conclude that IPv6 deployment does scale up for deployment on the public surface of the Internet. i.e. Large residential, 3GPP mobile, and large content providers and CDN operators.

A compelling application with immediate benefit to end-users will not emerge before we're already approaching the summit of deployment.  Unlike climbing a mountain IPv6 deployment is hard in the foothills and will be easy at the summit.

IPv6 is Internet broccoli. Good for us in the long run but no immediate sugar rush from deploying it, except in special cases particular to the circumstances of the organisation deploying it.

IPv6 deployment on the public surface of the Internet is growing steadily but not spectacularly. With existing trends the majority of this will support IPv6 within a reasonable time frame measured in units of time such as equipment refresh cycles.

When considering business cases for IPv6 remember that it is often being displaced by better business cases in the sense that other cases may generate or preserve revenue streams more immediately.

IPv6 is going to be the majority of traffic by volume on the public surface of the Internet fairly quickly.
As measured by importance of traffic (i.e. services that businesses and people are willing to pay for) it will take longer. As the volume of IPv6 grows there should be a parallel focus on genuine feature parity so that IPv6 can replace IPv4.

IPv6 Return of Investment Poll Mirjam Kuehne  –  Jul 08, 2016 2:30 AM PST

Great comments. Thank you!

You can also provide feedback by filling in this short poll posted next to the original article on RIPE Labs:

https://labs.ripe.net/Members/marco_hogewoning/can-you-make-ipv6-work-commercially

Costs, incentives Michael Elling  –  Jul 12, 2016 10:18 AM PST

1) "At the carrier level it is near impossible to determine the actual operational and capital expenses that are involved. Such figures in general are considered company confidential and all I can say is that I am not aware of any publicly-listed company detailing the costs in one of their annual or quarterly reports. Which makes me think it can't be that high."

Surely this is the first thing one must do to identify the problem?

2) perhaps it is time to rethink inter-network settlements, as not only is IPv6, but many other technologies and use-cases slowed down by lack of incentives (and disincentives) between networks and actors.

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Promoted Post

Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.