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Retail Giant Amazon Amassed Large Amounts Of IPv4 Addresses. Why Are They Doing It?

  • Posted at 2020-12-17 16:37:46
  • By Prefixx Team

Retail Giant Amazon Amassed Large Amounts Of IPv4 Addresses. Why Are They Doing It?

Owning multiple IP addresses by no means is a cheap proposition.

Recent reports by credible internet watchdog's reveal that the retail giant Amazon has bought billions of dollars worth of IPv4 addresses. The exact reason for the same is not very clear among experts.

Andree Tonk, who is an internet infrastructure expert and had been following Amazon for a while now says it is just a teaser of the complete picture. The total collection of IPv4 addresses bought by Amazon is well beyond our imagination. Andree adds that over last few years, Amazon has been buying scores of IPv4 addresses that are yet to be circulated. They are basically hoarding them. He further adds that in 2017, Amazon made purchases worth 8 million from Massachusetts Institute of Technology. It was followed up with similar purchases in 2019, worth 16 Million and 4 Million from General Electric and AMPRNet respectively.

Upon further investigation of IP registries by Andree Tonk, he further discovered that in total, Amazon possessed over 100 million unique and unused IPV4 addresses.

The Splurge Of Cash By Amazon

Technically it is not possible to estimate the exact amount Amazon had to cough up to hoard such an extravagant number of IPv4 addresses. However, Andree Tonk adds to have made a rough estimate as to the approximate figure Amazon may have chosen to invest for the surplus addresses. A simple calculation based upon a standard cost price of around $25 per IPv4 address, the total amount would amass in Billions.

According to Tonk, Amazon posses about 100,750,168 of such IPv4 addresses which they have bought over the years. This totals to a whopping $2.5 Billion as a cost to the company at the base price of $25. That's a lot of money considering IPv4 is considered obsolete by major service providers.

What Amazon Web Services Plans To Do With IPv4 Addresses?

A question we all would have would be why Amazon is hoarding such ridiculous amounts of IPv4 addresses in the first place? But Amazon Web Services seems to have a plan of their own. Various Amazon Web Services internal directory reveals that out of the total of 100,750,168 IPv4 addresses that they own, the company has already allocated close to 53 Million of them. That leaves them with approximately 47 Million more in hand. That number is still a big one, but if we consider the active IPv4 market, the probability of the remaining 47 Million to be taken up soon is pretty high.
So although the initial purchase of the IPv4 addresses in millions rather seemed pointless, but Amazon does have a plan up its sleeve.

What Is The Future Of IPv4?

Many experts believe the IPv4 is at the end of its journey and would soon become completely obsolete. Many new service providers and internet networks have initiated the process to migrate towards the IPv6 network which provides better security and efficiency. The IPv6 uses a 128 Bit address which carry various advantages over IPv4 such as:
•No need for Network Address Translation
•Is auto-configured
•Does not face any private addresses collision
•Has a better routing in multicast setup
•Employs a simple header format
•Has a more efficient and simplified overall routing
•Has something called "Flow Labeling" which is basically an efficient quality of service
•Has inbuilt privacy and authentication service
•Provides more flexible extension, option
•No need for dynamic host configuration protocol, easily administered

Although the future belongs to IPv6, there are still a number of online applications and websites which still employ the use of IPv4. For such businesses, Amazon's "kitty" of millions of unused and unique IPv4 addresses will always come in handy. The very common business practice of buying in bulk and selling in retail could just be the business model at play here.

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