1 November 2021 | 9 min read

How IPXO Enables Revenue for Businesses

As IPv4 addresses gain a commodity status and the demand for this resource grows, businesses uncover a new revenue stream.

IPXO unlocks revenue for businesses.

IP addresses make the virtual world go round. They help identify our devices and make it possible to connect to one another on the global computer network. Unsurprisingly, as we discuss IP address revenue, it is evident that this resource offers interesting opportunities for businesses.

It’s a fact that we are running out of some of our IP addresses at an inordinate speed. While we will not deplete IPv6 addresses any time soon – if ever – we have already exhausted IPv4 addresses. What’s the difference between IPv4 and IPv6? There are 340 undecillion IPv6 addresses but only 4.29 billion IPv4 addresses. 

Although IPv6 is meant to replace IPv4, the infrastructure is not yet ready for the switch. In addition, we have found ways to cope with the exhaustion of Internet Protocol version 4 addresses. For example, thanks to Network Address Translation (NAT), we can consolidate IP addresses, which means we need fewer of them.  

All in all, more and more IPv4 addresses are in demand, and with IPv4 supporting the internet, we cannot function without this resource yet. Surprisingly, some 800 million IPv4 addresses remain unused, meaning business opportunities are hiding in plain sight. 

Pie chart representing 80% used IPv4 addresses and 20% unused.
Pie chart of unused and used IPv4 addresses (data by IPXO)

IPv4 addresses: a clear-cut business opportunity

The IPv4 address shortage has loomed upon us for decades now. Of course, when the Internet Protocol version 4 emerged in the 1980s, no one thought that we could run out of 4.29 billion addresses. However, with the internet explosion in the 1990s, it became evident that we would need a replacement soon. IPv6 emerged in 1995, but this version hasn’t replaced IPv4 yet.

The bottom line is we’re dependent on IPv4, and we’re likely to remain dependent on this version of the Internet Protocol for decades to come. This has led to IPv4 becoming a commodity. It is now comparable to gold, stocks and even cryptocurrency. Undeniably, as the demand for IPv4 addresses increases, the prices of a once free resource are climbing as well. 

While IANA (Internet Assigned Numbers Authority), in theory, is the owner of all IP resources, it officially distributed the last free IP addresses back in 2011. A decade ago. Since then, a secondary market has surfaced, in which buying and selling IP addresses is the new norm. 

Four Regional Internet Registries (RIRs) have also started facilitating inter-RIR transfers. While APNIC, ARIN, LACNIC and RIPE NCC RIRs freely transfer resources among themselves, AFRINIC doesn’t participate in this exchange.

Arrows pointing between RIRs that have inter-RIR transfer relationships.
Inter-RIR transfers between Regional Internet Registries

IPv4 brokers 

Ultimately, we all need IPv4 addresses to connect via the internet. Therefore, it is not surprising that the secondary market is booming. In fact, it’s no longer a new market. Microsoft has been buying IPv4 resources for at least a decade now. In 2011, for example, it purchased 666,624 IPv4 addresses from Nortel for 7.5 million USD using the services of an IP broker.

Numerous IP brokerages exist these days, and they assist both buyers and sellers of IPv4 resources. When it comes to selling IPs, brokers are responsible for finding prospective buyers and striking the best deals to make the most money for the IP holders. Those looking to buy IPs use brokers’ services to find reputable and usable resources at reasonable prices. 

Unfortunately, many IP addresses that are re-distributed have a poor reputation and plague IP blocklists. Brokers assist buyers in finding IPv4 resources that are clean. However, they are unlikely to help with delisting IPs from blocklists. 

IPv4 lease market

With IPv4 prices continuously going up, some IP holders are waiting for the best time to sell unused resources. At the same time, some small to mid-size companies are unable to invest in scarce and expensive IP addresses. Luckily, selling and buying IPs are no longer the only options. Leasing IPs is the new big thing.

How has the IPv4 market changed?

IANA allocated all 4.29 billion IPv4 addresses for free. The RIRs responsible for distributing the resources in their service regions did not charge for IP addresses either. 

In the 1980s, when IPv4 emerged, anyone with a legitimate reason to own IP addresses could easily request and obtain the resources. However, as we started running out of IPs, and especially after IANA allocated the last unused IP addresses, RIRs started implementing much stricter protocols. 

Timeline of RIRs running out of IPv4 addresses

Today, RIRs only allocate small blocks of IPv4 addresses. These are usually /24, /23 and, in some cases, /22 blocks that consist of 256, 512 and 1,024 IPs, respectively. RIRs also allocate resources more responsibly. For example, ARIN allocates IPs to critical infrastructure providers only, and LACNIC allocates IPs to members who have not received them yet. 

Although RIRs no longer have unused IPs they can give away carelessly, plenty of IP holders are willing to sell and lease their resources. All in all, these resources are no longer free, which might be the biggest change in the market itself.

IPv4 prices keep climbing 

IPv4 prices continue to increase, and they have been accelerating more and more each year. While the average price per IPv4 address was around $15 in 2017, it went up to $20 in 2018 and 2019. In 2020, buyers were spending $25 per IP address on average. As you can see, the prices grew, but they grew in a predictable progression.

In 2021, IPv4 sale prices shot up to around $44-50 per IP. A significant increase compared to the previous years. What has influenced that? In short – the increasing demand. The explosion of IoT plays a huge role in this. As more and more people get connected to the internet and buy internet-connected devices, IPv4 addresses are becoming a desired commodity simply due to shortage and high demand.

Line graph of IPv4 address sale prices in 2011-2021 per IP address in USD.
IPv4 address sale price history throughout the decade

IPv4 lease prices have also been accelerating, and it is clear why. First of all, lease prices reflect the IP sale market, and if sale prices are going up, lease prices go up too. Second, IPv4 leasing has become more popular. Not only among those who may be unable to buy the resources they need but also those who have unused IPs that can be monetized.

Selling IPv4 vs. buying IPv4: which is better for business?

According to our data, IPv4 lease prices range from $0.37 to 0.90 per IP (per month), depending on the address block. This is not a costly option, even if you need a larger IP block. 

Of course, a /16 block consisting of 65,536 IPs would cost around $38,000 per month at the average price of $0.59 per IP. However, not all companies need this volume of IP addresses. The /24 block is one of the more popular in the lease market. There are 254 usable IP addresses in this block that goes for around $200 per month, and that is plenty for many small to mid-size businesses. 

What about IP holders? Is it better to sell the assets you’re not using? Perhaps, you should keep them safe until you are ready to sell? Maybe leasing is the right move? If you want to base your decision on numbers, use our free Leasing vs. Selling Calculator. The tool shows how you can make more money by leasing IPv4 addresses for a single year than by selling once. 

IPXO IPv4 address Leasing vs Selling Calculator example.
Comparing leasing vs. selling revenue of a /24 address block

In a recent webinar hosted by IPXO, Dan Handy, working at the Ace Data Centers and Alex Latzko, the Principal Network Architect at Deft, shared their experiences with leasing IPv4 addresses via the IPXO Marketplace.

The leasing prices have increased over the last year and a half significantly and…our average lease price is $0.57 per month…[IP monetization] turned into a really good revenue stream and IPXO has been a great partner.
Dan Handy
Ace Data Centers
We put [IP addresses] in, priced them, set up a payment…and we just started sitting back and watching the money come in.
Alex Latzko
Principal Network Architect, Deft

What does the IPXO Marketplace offer?

The IPXO Marketplace is the first fully automated IP address lease and monetization platform. In 2020, the service was developed as the IP Address Market under the Heficed brand. In August 2021, the Marketplace emerged as a standalone service under the IPXO brand.

The IP monetization service offered by the IPXO Marketplace enables IP holders to import their resources, set their own prices and lease IPv4 addresses to reputable parties.

IPXO Marketplace IP monetization steps.
IP monetization at the IPXO Marketplace

The IP lease service enables those looking for clean and reputable IPv4 resources to filter subnets by CIDR (Classless Inter-Domain Routing), pay for the resources they need in just a few clicks and also assign IPs to any network.

IPXO Marketplace IP lease steps.
IP lease at the IPXO Marketplace

IPXO features

The IPXO Marketplace offers a suite of amazing services that can help both lessors and lessees get exactly what they need, without a fuss. These services include:

  • Full automation
  • IPAM (IP address management)
  • IP reputation management
  • Abuse management
  • DNS management
  • Delegated RPKI (coming soon)
  • IP geolocation (coming soon)

The IPXO Marketplace offers fully automated services, and clients can start monetizing or leasing pretty much as soon as they create their accounts, validate resource ownership and meet compliance requirements. All payouts are automated, which means that earnings are transferred automatically at the chosen payout cycle.

IPXO takes IP reputation extremely seriously. Disreputable IPs that exist in IP blocklists cannot be added to the platform, which ensures that clients only monetize and lease clean IPv4 addresses. Once IPs are in the marketplace, we continue monitoring them to ensure a stable IP reputation and to maintain the value of the resources.

Human figure pushing IP abuse gauge lever to green.
Daily monitoring at IPXO ensures maintained IP reputation

Managing IP resources is extremely easy with IPXO’s IPAM dashboard. This ensures that all clients have full control. Even more control will come soon once delegated RPKI and IP geolocation services become available. To learn more, we invite you to watch the recording of a webinar introducing the IPXO platform

How does IPXO handle abuse?

Experienced anti-abuse professionals employ automated abuse reporting and real-time monitoring to catch and mitigate abuse incidents in time. Our team also works hard to make sure that all clients are audited before they can access the Marketplace to ensure security for everyone on the platform.

Whenever IP holders add their subnets to the Marketplace, we perform a thorough background check on IP addresses. With the help of almost 200 different blocklists, anti-abuse experts can make sure that only clean IP addresses are listed on the IPXO Marketplace. Even if a single IP address fails the check, the entire subnet cannot be added until it is clean. 

Once the subnets are in the Marketplace, IPXO takes the responsibility to ensure that the IP addresses are utilized safely. A major undertaking for the anti-abuse team. Besides inventory control and screening, additional procedures include:

  • Business verification
  • KYC (Know Your Customer)
  • ASN blocklist maintenance

At IPXO, every new business is verified manually so that only legal business entities monetize and lease IP addresses via the Marketplace. Businesses also need to fill out the declaration of usage form, which is one of the steps in the KYC process. This allows collecting data on the client’s GDPR compliance, mailing activities, the size of the company, etc. This enables to block unreliable parties from joining the Marketplace. 

IPXO also maintains a blocklist of malicious autonomous system numbers, or ASNs. This list combines the unique database created by IPXO and Spamhaus’ ASN blocklist. Paulius Judickas, the Head of Sales at IPXO, explains the importance of ASN blocklisting:

Whenever a client chooses to lease a subnet via the Marketplace, getting an announcement on their autonomous system is easy. All they need to do is enter the ASN. However, if the number is listed in our ASN blocklist, the inquiry to get the subnet announced is declined. Simultaneously, our teams are warned that someone is trying to take IPs to a malicious network, which may lead to the closure of the account.

You can learn more about how IPXO combats abuse and how businesses can unlock new revenue streams using the Marketplace by watching our recent webinar. 

IPXO Webinar: How does IPXO Enable Revenue for Businesses?

IPXO partnership opportunities 

Right from the get-go, IPXO’s vision was to build a secure and open internet that guarantees equal opportunities for all. Undoubtedly, the more idle IP resources are put to use, the more sustainable the internet becomes. Internet sustainability is crucial for creating an ecosystem that can support businesses around the world and, hopefully, slow down the depletion of IPv4 addresses.

While IPXO introduces an easy and sure way to monetize IP resources, businesses have more opportunities to unlock new revenue streams. IPXO supports over 75 industries and offers several different Partnership Programs, including:

  • Ecosystem partnership
  • Referral partnership
  • Integration partnership

IPXO’s Ecosystem partners can benefit from access to thousands of clients and use that to increase brand visibility. Referral partners can earn money just by referring their valued customers to the unique IPXO Marketplace. 

Integration partners will soon have the opportunity to significantly expand their toolsets by bringing IP management directly to their customers. You can fill a partnership form on our Partners page to contact our Sales team and get more information. 

IPXO partnership opportunities.
IPXO offers numerous partnership opportunities

Scale and unlock a stable revenue stream using IPv4 addresses 

IP addresses help build and scale businesses. Unfortunately, at this time, there aren’t enough IPv4 addresses to support everyone. This is, in part, due to IP holders keeping their resources unused. In fact, nearly 20% (around 800 million) of all IPv4 addresses are not serving anyone.

This is great news! That means that new businesses are not locked in and can continue to scale as long as we can put the unused IPs back into the market. This is easy to do using the IPXO’s Marketplace, a platform designed to help monetize and lease clean IP addresses in a safe, transparent and automated way. 

Monetizing IPs is a great alternative to selling. While some IP holders choose to sell their resources, this is not always the best option. First and foremost, monetizing IPv4 addresses is more profitable in the long run. Second, with IPv4 sale and lease prices steadily going up every year, selling now might not be the best use of the resources. Finally, if a business is thinking about selling IPs in the future, leasing can offer a steady revenue stream until the final sale.

For businesses that need IPs, leasing offers an opportunity to scale without huge investments. Buying IP addresses requires a lot of money upfront. On the other hand, IPv4 leasing provides an opportunity to scale at low upfront costs. 

To sum up, IP leasing helps build a sustainable internet that supports businesses of all sizes in dozens of unique industries. The doors are open.