AWS Increases Charges for IPv4 Address Use - A Closer Look

Amazon Web Services or AWS recently made a very important announcement to their customers with regards to their public IPv4 use. Starting February 1, 2024 AWS will start charging their customers $0.005 per hour for every public IPv4 address affecting anyone except those who own their IPv4 addresses or those who utilize Amazon BYOIP.

The new rates mean that their customers should expect an estimated increase of $43 per IPv4 address acquired through AWS. According to their announcement, the charge is being implemented due to the massive increase of IPv4 price in the open market. AWS claimed an increase of 300% since 2018 was the reason for this decision.

The Increasingly Tight Market of IPv4

Online connectivity will only grow larger and there will be more connected devices thanks to the increasing use of IoT. The increase of demand in services and devices also increases the demands of connectivity - and IPv4 is a requirement for that connection.

AWS's announcement virtually confirms their speculation that IPv4 could head into scarcity. Because of the increase in demand for interconnectivity, it is possible that IPv4 could increase in demand as more online services are being set up.

Curiously, the demand and supply that dictates the market for IPv4 has actually stabilized. While it's true there's been a massive uptick in pricing years ago especially in 2021, prices have stabilized as it has since then according to CircleID.

Time to Shift to IPv6?

Budget conscious businesses will naturally see this as another overhead cost that could have ramifications later even in just a very small scale. But there's already a ready alternative that could handle this challenge with an even better technology: IPv6 addresses. It comes with a lot of improved features compared to IPv4 as well as increase in internet connectivity. IPv6 addresses are already available in some devices and services.

IPv6 continues to grow and there's a migration towards this technology. Google monitors IPv6 use worldwide and according to their latest data, adoption is currently at 40.4%.

IPv6 use chart worldwide

There's still a long way to go before there is a massive adoption of IPv6. Analysis of use per country also shows a staggering difference of adoption. Only a handful of countries have more than 40% adoption of IPv6 with European countries leading the way. The US is currently at 49.76% adoption.

AWS's announcement of charging their customers on their users of IPv4 also comes with their support to push towards IPv6. Even Google's IPv6 adoption monitoring is set up as a way to show their support towards migration.

But migration to IPv6 is easier said than done. From legislation to hardware and training requirements for network administrators, complete adoption and possible complete migration to IPv6 is still years away.

Alternative to AWS Pricing

Amazon has clearly set the tone for IPv4 pricing with possible ramifications in the future. While prices are still stable, a big move from an internet giant such as Amazon will definitely have some effect on the market.

Fortunately, there are still alternatives to AWS pricing options. Fortunately, a free market means competition and there are providers that aggressively offer IPv4 addresses at a very good price point compared to AWS. These IPv4 addresses can still be used with AWS through BYOIP.

Businesses with robust online presence have to take note of this news. Even if they are not using an AWS IPv4 address, their announcement will definitely have an effect due to their perceived scarcity. While everyone is still waiting for mass adoption and eventual migration to IPv6, there are still alternatives to AWS that offer aggressive pricing with the same benefits.

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