
Microsoft spends $7.5m on IP addresses - paran
http://www.theregister.co.uk/2011/03/24/microsoft_ip_spend/
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gravitronic
How can Nortel sell something they do not own?

[http://en.wikipedia.org/wiki/IPv4_address_exhaustion#Markets...](http://en.wikipedia.org/wiki/IPv4_address_exhaustion#Markets_in_IP_addresses)

"The concept of legal "ownership" of IP addresses as property is explicitly
denied by ARIN and RIPE NCC policy documents and by the ARIN Registration
Services Agreement. It is not even clear in which country's legal system the
lawsuits would be resolved."

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johnbatch
These are "Legacy" IPv4 addresses, that were allocated before the formation of
any RIR

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joshaidan
So, $7.5 million for 666,624 IP addresses. Now the question is, how much is
the 16,777,214 IP addresses that Apple owns worth? (Apple owns the entire
17.0.0.0 Class A subnet) Was this factored into Apple's valuation?

I would love to hear the story behind how Apple got the 17.0.0.0 subnet.

~~~
wmf
If you want to be optimistic you could carry a /8 on your books at ~$150M.
That's a drop in the bucket for most companies that hold /8s, so it's probably
not worth arguing about.

The legacy class As were given out by Jon Postel just for asking; if you would
ever need more than 256 subnets then a class B wouldn't be big enough so you
got a class A.

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rbanffy
It could be an investment on the formation of a black market, or insurance
against the exhaustion of the IPv4 space. Now, since they make the IPv6 stack
of the most popular desktop OS in the world, I'm not sure what this means.

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softbuilder
Microsoft probably spends $7.5m on toilet paper too. They're a large company.
Is this really that big of a deal?

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Zirro
There's something missing in this article. Why do Microsoft need all these IP-
adresses? I'm sure someone here can give me a clever answer.

~~~
tednaleid
I'm guessing it's related to their cloud offering. The ability to have a big
pool of IP addresses that they can offer to people using their cloud means
they don't have to ration them quite as strictly. Amazon already limits you in
the amount of elastic IPs that you get out of the box (you can request more
<http://aws.amazon.com/contact-us/eip_limit_request/> but you need to fill out
a form). As things get more scarce, this could become a much bigger issue.
Microsoft is hoarding early so that when things really get tight, their users
don't have the same pressure.

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rbanffy
What about IPv6?

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ori_b
How many ISPs and consumers are set up to use it? I think it's still a while
before IPv6 will be viable.

~~~
rbanffy
The one I work for is. The one that provides my cable modem is too. I don't
know how others are, but if those two are, I should assume it's more common
than you think.

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kia
I think strategically it's a wise move. For MS 7.5m is a small sum. In case
IPv6 will not be deployed at the speed we all want their investment will pay
off tenfold because IPv4 addresses will be gold. They try to hedge the address
exhaustion risk.

~~~
rbanffy
They probably can measure the adoption of IPv6 from the usage data Windows
desktops volunteer back to MS. That said, I would guess they predicted (at
least in March) a scarcity of addresses for their cloud offering before IPv6
becomes widespread.

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scott_s
One company sold an asset to another company, and kept normal records of the
sale. I don't consider that the "black market." It's just the natural
secondary market. (Yes, I'm only making a semantic distinction, but I think
it's misleading to use the same term to refer to, say, the cocaine economy and
the above-board sale of IP addresses.)

~~~
IgorPartola
I think the implied point in the article is that in this case Microsoft and
Nortel had to disclose the sale details, but in most other circumstances, the
would not have done that. It seems that the author implies that this sale is
an indication that a black market is forming, not that this was a black market
transaction.

~~~
scott_s
The sale was a part of the normal economy. One company paid another company
for something, and the sale was recorded in their books. The "something" is
not illegal. The term "black market" is usually reserved for transactions that
happen outside of the regular economy, usually because they are illegal.

~~~
wmf
The powers that be have been saying for about 20 years that IP addresses are
not assets, cannot be owned, and cannot be sold. That's why people are talking
about black markets.

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wmf
From March. It is a little curious that MS is buying something that ARIN is
giving away for free.

~~~
dpark
Microsoft bought 666K addresses. How many addresses does ARIN even have now,
and how likely are they to assign such a large block to a single entity at
this point?

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wmf
ARIN has 5.7 /8 equivalents, or 95M addresses available. Their policy is
(roughly) to satisfy any requests where the addresses will actually be used in
the near future ("50% utilization rate within one year").

<http://www.potaroo.net/tools/ipv4/index.html>
<https://www.arin.net/resources/request/ipv4_depletion.html>
<https://www.arin.net/policy/nrpm.html#four>

~~~
dpark
Hmm, that is interesting. I'm surprised that ARIN has that much available at
this point.

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brador
How does one go about acquiring IPV4 addresses as an investment? Thoughts on
viability of ROI?

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ovi256
Bad ROI. For Microsoft, this is more like insurance. Pay now a little to avoid
a potential, small probability, high future loss.

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pvitty
Hopefully whoever/whatever has my old Nortel IPs has better luck that I did -
redundant Nortel Engineer.

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swiecki
Posted back in march?

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wavephorm
This is artificial scarcity for you. Numbers. They're paying millions of
dollars for a set of numbers.

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tptacek
This sounds clever but actually bespeaks a lack of understanding what an IP
address is. Microsoft didn't buy a "set of numbers"; they bought the rights,
previously secured by another company, to insert prefixes into hundreds of
thousands of routers operated (at galactic levels of expense) by hundreds of
companies around the world.

~~~
wavephorm
So they're paying for the rights for other people to access their systems via
a set of numbers. And how is that not making arbitrary numbers artificially
scarce and collecting payment for them?

IPV6 really can't come soon enough.

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wmf
IPv4 was designed in the early 1980s. Are you saying Cerf et al. made IP
addresses only 32 bits so they could cash in 30 years later? Or are you saying
that almost all ISPs are delaying IPv6 so they can cash in (fairly small
amounts of money) on IPv4 addresses?

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wavephorm
I guess I'm making a more broad statement that IP addresses are rare when,
once we migrate to IPV6, they will be free, so we should migrate asap.

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tptacek
They _won't_ be free. They're _not_ just numbers.

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huskyr
Why is this on the front page of Hacker news when the article is from march?

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wmf
Because it's new to somebody (sigh).

