Home / Blogs

The IPv4 Market - Looking Back and Forward

Janine Goodman

In September 2015, the free pool of IPv4 numbers available through the American Registry for Internet Numbers (ARIN) ran dry. In 2016, the IPv4 market was the only reliable source of IPv4 numbers, globally, and the pattern of activity changed dramatically. So far in 2017, we have seen the trends in the last half of 2016 continue.

Throughout 2015, IPv4 transactions were trending steadily upward and the volume of transferred numbers had reached an all time high as several /8 holders sold off their excess supply of IPv4 numbers to large buyers with available liquidity to purchase large amounts of address space. In 2016, the monthly rate of transactions climbed sharply to nearly double the average monthly number of transactions in Q4 2015. The volume of transferred numbers took a different turn. Nearly 40 million IPv4 numbers were transferred via the ARIN transfer approval process in 2015. In 2016, that number dropped by nearly 50%, to just over 20.75 million.

North American IPv4 Market Activity in 2016 – In the latter half of 2016, the volume of numbers transferred grew from just shy of 5.8 million numbers in the first half of 2016 to nearly 15 million numbers in the last 6 months of 2016 (left chart). Expanding the view to all purchases in 2016, a full 50% of all numbers were transferred as /16 blocks. The chart on the right shows that /16 block trades produced more transferred numbers in 2016 than any other block size. (Click to Enlarge)

There are several key explanations for the market shift. One, the depletion of large block supply. Whereas 14 /12+ (1,048,576 numbers) blocks transferred via the ARIN transfer approval process in 2015, only 3 such blocks were transferred in 2016. Also, the decision by some large block holders either to sell their blocks in smaller sizes to realize higher unit prices or hold off entering the market altogether until large block pricing improved.

Market indicators show that the higher trading volumes in 2016 are holding steady in 2017, both in the ARIN domestic market and in the InterRIR market where transfers more than doubled in part due to RIPE NCC's inter-RIR transfer policy which was now in full swing. With hints that AFRINIC and LACNIC may open their doors to InterRIR transfers, we expect this number to grow.

We also expect more supply to enter the market — but not necessarily in the volumes we experienced in 2015. In the first half of 2016, just 5.8 million numbers were transferred. That number more than doubled to nearly 15 million numbers in the last half of the year as prices have risen, sellers have been able to take advantage of more flexible contract structures that allow them to fund renumbering projects, and large buyers are more willing to accept numbers over a more flexible and extended schedule and in smaller block sizes. In 2016, the /16 (65,536 numbers) was a dominant block size in the market, accounting for 50% of all numbers transferred.

As in 2015, pricing trends have continued to mirror the shift in supply and demand. Pricing was at its lowest in Q1 2015, when there was a glut of supply in the marketplace. With tightening of supply in 2016, prices escalated. The average price of small to mid-size blocks grew by just over 30%. Large block pricing nearly doubled, substantially narrowing the gap between small and large block pricing. We expect prices to escalate further as we head toward the last half of 2017.

IPv6 migration has not yet materially impacted the IPv4 marketplace. Tech companies continue to invest in their IPv4 infrastructure while building out their IPv6 network, making some significant IPv4 purchases to meet their needs. Companies appear to be settling into their reliance on the IPv4 market, at least over the next 2-3 years, to bridge the gap between IPv4 and IPv6 as companies recognize that IPv6 migration will happen eventually but not soon enough.

A full analysis of the IPv4 market, with additional data, can be found in Avenue4's 2016 Annual State of the Market Report.

By Janine Goodman, Vice President and Co-founder at Avenue4 LLC. Janine advises clients on their purchase and sale of IPv4 assets, with an emphasis on helping clients navigate applicable regional Internet registry policies when structuring and executing their transactions.

Related topics: IP Addressing, IPv6

 
   

Don't miss a thing – get the Weekly Wrap delivered to your inbox.

Comments

To post comments, please login or create an account.

Related Blogs

Related News

Explore Topics

Dig Deeper

DNS Security

Sponsored by Afilias

Cybersecurity

Sponsored by Verisign

Mobile Internet

Sponsored by Afilias Mobile & Web Services

IP Addressing

Sponsored by Avenue4 LLC

Promoted Posts

Buying or Selling IPv4 Addresses?

ACCELR/8 is a transformative IPv4 market solution developed by industry veterans Marc Lindsey and Janine Goodman that enables organizations buying or selling blocks as small as /20s to keep pace with the evolving demands of the market by applying processes that have delivered value for many of the largest market participants. more»

Industry Updates – Sponsored Posts

Avenue4 Helps IPv4 Sellers and Buyers Gain Market Access, Overcome Complexities

Introduction to ACCELR/8 - Fast Lane to the IPv4 Market

Avenue4 Launches ACCELR/8, Transforming the IPv4 Market with Automated Order-Driven Trading

Afilias Partners With Internet Society to Sponsor Deploy360 ION Conference Series Through 2016

Dyn Adds Chris Griffiths As New VP of Labs

IP Geolocation: Four Reasons It Beats the Alternatives

Nominum Releases New Security Intelligence Application

New Nixu NameSurfer 7.3 Series Powers the Software-Defined Data Centre

New Nixu Solution Slashes Cloud Application Delivery Times from Weeks to Milliseconds

Domain Name Registrations Pass 233 Million in the First Quarter Of 2012

Automate IPAM Set-up with Nixu NEE 1.3 Series

Nominum selected as 2012 AlwaysOn Global 250 Top Private Company

Streamline Application Delivery Processes with Nixu NameSurfer 7.2.2

Nominum Releases New Version of Carrier-Grade DHCP Software for Telecom Providers

Nominum Survey of World's Leading ISPs Shows Nearly 60% of ISPs Plan to Roll-Out IPv6 by End of 2012

Frontline and Nominum Deliver Integrated DNS-Based Platform to Enhance Enterprise Security

Nominum Sets New Record for Network Speed and Efficiency

Implementing a Cyber-Security Code of Conduct: Real-Life Lessons From Australia (Webinar)

Nominum and Nixu Software to Deliver Centralized DNS and DHCP Management Solution

Nixu NameSurfer 7.2 Strikes Rich at Dojo