The cost of buying or leasing IPv4 addresses continues to increase. Why?
It’s a simple matter of supply and demand. The supply of IPv4 addresses is capped, since there are no new IPv4 addresses being created. So supply stays the same, regardless of demand.
Demand for IPv4 addresses is anything but stagnant, as broadband providers continually sign up new subscribers and subscribers add more internet-connected devices. And we all know what happens when demand increases while supply doesn’t…prices go up!
The Cost of IPv4 Addresses
It’s no surprise the cost of IPv4 addresses has been increasing. What may be surprising is how dramatic those price increases have recently been.
According to data from an IPv4 marketplace (broker), prices for IPv4 addresses have grown almost 250% in the past two years. Another IPv4 marketplace stated that IPv4 prices more than doubled in the last year alone, going from $27 per IPv4 address at the end of 2020, to around $55 per address in December, 2021.
Network Address Translation
One solution to the high cost of purchasing or leasing IP addresses is to share the remaining IPv4 addresses among larger numbers of customers. To accomplish this, Network Address Translation (NAT) enables a single router to act as an agent between the internet and a local private network, so that one public IP address can represent hundreds, or even thousands of devices within the private network.
By sharing a public IP address among many private IP addresses, NAT limits the number of public IP addresses an organization has to use, conserving its IPv4 addresses. As a result, NAT has become a very valuable technology to extend the use of IPv4 addresses and successfully transition to IPv6.
Carrier Grade Network Address Translation (CGNAT) is a large-scale NAT that translates private IPv4 addresses into public IPv4 addresses. CGNAT employs Network Address and Port Translation methods to aggregate multiple private IPv4 addresses into fewer public IPv4 addresses.
CGNAT Solutions
Traditional CGNAT solutions run on proprietary hardware and were developed for large carriers with large budgets. However, many smaller broadband providers and those located in emerging markets can’t afford the high price tag associated with most CGNAT solutions.
For traditional CGNAT solutions, studies have shown that CapEx costs are typically 90% of the overall costs and hardware comprises over 70% of the overall costs. To reduce the cost of CGNAT solutions, broadband providers need to look closely at the hardware costs. With hardware accounting for such a large percentage of the overall costs, lowering the costs of CGNAT hardware will significantly impact the total cost of ownership (TCO).
netElastic CGNAT
Unlike legacy CGNAT solutions, netElastic CGNAT software runs on commodity white box servers. This makes netElastic CGNAT a cost-effective alternative to higher priced solutions and perfectly suited for regional and rural broadband providers.
netElastic’s software-based CGNAT is built on netElastic’s high-performance virtual router technology, which is a very scalable software architecture that delivers high translation performance while supporting a broad range of additional routing capabilities.
netElastic CGNAT also has built-in support for application gateways to ensure applications will run continuously and transparently with CGNAT. Using DPDK and advanced packet processing, netElastic CGNAT can achieve near line-rate throughput on 10G, 25G, 40G, and 100G interfaces. It’s also highly scalable (scales by cores) and can deliver 5 Gbps to well over 360 Gbps per server. CGNAT also supports up to 6 million NAT sessions, enough for over 60,000 subscribers.
A Pricing Example
The cost of purchasing or leasing IPv4 addresses can add up very quickly. The infographic below illustrates the costs for:
- Buying IPv4 addresses
- Leasing IPv4 addresses
- Purchasing a netElastic CGNAT solution
netElastic CGNAT provides an easy way to conserve IPv4 addresses while ensuring a smooth transition to IPv6. And netElastic’s software-based CGNAT offers the lowest Total Cost of Ownership (TCO) in the industry.
To learn more, please read the white paper Can Implementing CGNAT be Easy and Affordable?
