North America to Run Out of Internet Addresses This Summer

The supply of new Internet Protocol addresses has almost run out, which means that companies will likely need to invest a significant amount of money to pay for pricier addresses and system upgrades. IP addresses are similar to telephone numbers that specify where data is going when it is transferred over the Internet. Companies may now have to spend millions of dollars switching to Internet Protocol version 6 (IPv6) to get more addresses for their various online operations.

connectionsCurrently, most of the Internet runs on Internet Protocol version 4 (IPv4). A limited number of the total 4.3 billion IP addresses were allotted to each continent. Asia ran out in 2011 and Europe exhausted its supply in 2012, according to The Wall Street Journal.

Experts predict the 3.4 million addresses left in the North America allotment will dry out this summer. In total, North America has 1.3 billion IP addresses, or about 30 percent of the world supply.

When the U.S. runs out, companies might have to pay higher prices for IP addresses. Currently, most companies pay about $11.25 per address. Some companies are trying to avoid higher prices by stocking up on IP addresses now. Salesforce.com acquired 262,144 addresses last November to fuel the growth of its Internet-based business apps.

Microsoft was reportedly shocked at the IP address shortage. In 2011, the company spent $7.5 million on over 650,000 IP addresses. Microsoft had also been using a provision known as RFC1918 that allowed the company to use duplicate IP addresses on different local networks, but RFC1918 space ran out earlier this year, notes The Wall Street Journal.

Now, the team is working on a regime of address translation, which is not only technically challenging, but it also slows down the network and has caused some network hiccups. Microsoft will also move towards shifting its system to IPv6.

IPv6 is a long-term, but expensive solution to the shortage of IP addresses. IPv6 offers a huge increase in the number of addresses available because the system supports 340 undecillion (340 followed by 36 zeroes) addresses. Only about 9 percent of the Internet has switched to IPv6.

Facebook is one of the companies that made the switch, so that it could continue building new data centers to support the growth of its user base. According to research firm Gartner, a companywide switch to IPv6 costs about 7 percent of the company’s annual IT budget.