Should I Buy or Lease
IPv4 Addresses?

by Lee Howard

IPv4 address prices are at their lowest in three years. At the same time, there are multiple options for leasing IPv4 addresses. So, organizations needing IPv4 addresses have to consider whether buying or leasing makes more sense.

Small IPv4 block prices are $33 per address, about $8,500 for a /24. All blocks in the range /24 to /22 have experienced prices at about this level since late 2023 and may be supported by demand for AWS BYOIP. Meanwhile, prices for /16 and /17 blocks have diverged to an unsustainable extent. /16s hover between $45 and $50 per address while /17s currently trade at $35 and occasionally slightly less. The different price doesn’t seem warranted by the convenience of a larger block. While It’s always easier to configure one block instead of two, it’s not a million dollars easier. Prices may not completely converge, but they may come closer.

Meanwhile, leasing prices are still $0.35 – $0.45 per month. There’s a slight premium for larger blocks, but regional locations (the RIR involved) seems to play a bigger role—lessees need to know they won’t have inconsistent geolocation information. There’s also a discount for long term commitments. That makes sense; a lessor wants to incentivize long leases so they don’t have non-revenue vacancies, and without a discount for a longer commitment, a lessee would take a short contract and renew.

There are risks to lessees, as well. At the end of the lease, they will have to acquire replacement addresses at new market conditions, and will have to renumber, potentially impacting customers. If the term of the lease is at least a few years, the lessee may be able to reduce the impact of these concerns.

Renumbering can be made easier with automation. Instead of manually configuring servers and network hardware, tools like ansible can turn a configuration repository into a database. Similarly, a good DDI (DHCP, DNS, IPAM) tool can use DHCP reservations and dynamic DNS to make server configurations easy. Firewalls and routers (and related security policy and routing policy) are typically updated twice: once to enable the new addresses, and again to remove the old addresses. Configuration management tools can help with these processes, too.

Even better, a migration plan to IPv6 can reduce the need for new IPv4 addresses at the end of the lease. Network devices can run dual-stack—both IPv4 and IPv6—combined with Network Address Translation (NAT) for the IPv4 addresses. NAT can compress a network of thousands of devices into just a few IPv4 addresses, especially when half or more of the connections are able to use IPv6.

With proper planning, the cost of leasing may be less in both the short term and long term.