Amazon Web Services has officially started charging for their public IPv4 address rentals. Here’s what you need to know about this business decision from Amazon.
Amazon is one of the world’s biggest companies and it's sitting on another goldmine that would make it richer. They may have created a lot of money through various ventures since they started out as a simple online book store but this time, they are ready to reap what they started out. It’s something they have built on for many years and they are planning to cash it in a big way this year and beyond.
IPv4 as the Backbone of the Internet and Amazon’s Business Strategy
The internet we know today would not exist without IPv4 as it is practically the backbone of every website. IPv4 in gist is a set of numbers that help identify a specific website. An online user may type in a specific website to visit but calling out the website to load in a browser requires a digital address - the IPv4 is that digital address. It is a set of four numbers from 0 to 255 separated by a dot and a combination of those numbers is a representation of a website. Each IPv4 should be unique because an IP conflict would occur and could cause problems to both sites that share the same IP address.
Amazon through their AWS (Amazon Web Services) has been collecting IP addresses over the years for business use. While Amazon has made a lot of news on their various business ventures, AWS is quietly their most profitable business according to Forrester and their IP collection over the years is not part of their increasing process.
But that is about to change this year and beyond.
In a blog post dated July 28, 2023 Amazon announced that they will start charging for the use of public IPv4 addresses starting February 1, 2024. The reason? Acquisition cost has skyrocketed in the past years up to 300% and they have no choice but to eventually start charging with the use of public IPv4 addresses.
The charge, fortunately, will hardly make a dent to websites since it will only charge up to $0.005 per hour which would ultimately cost nearly $43 annually. Still, millions of public IPv4 addresses are being used every year which means an increase of profit to the internet giant.
The Move from IPv4 to IPv6
The increase in scarcity of IPv4 highlights the need to move to a more robust IPv6. While there are some challenges along the way as it will require hardware changes and even network configuration to the base level, moving forward to IPv6 is a smarter business choice to prevent additional cost in operating business. Even Amazon is encouraging the transfer to IPv6 on the same blog post when they announced the charge for the use of public IPv4 addresses because of the advantages of IPv6 aside from the increasing scarcity of public IPv4 addresses.
Amazon’s decision to charge for IPv4 addresses is a small but significant change in the business of the internet. The charges to a unique IPv4 address rental per year is small but signifies the increasing demand and there’s no indication it will stop soon.