IPv4 addresses: the balance sheet asset most businesses have not looked at

In 2011, IANA — the organisation that manages global internet address allocation — handed out its last IPv4 address block. The free pool was exhausted.

Since then, anyone who needs IPv4 addresses has to buy or lease them from someone who already has them. A secondary market developed. That market is now well-established, with active transfer processes through the regional internet registries and pricing that has moved significantly over the past decade.

The businesses that often benefit most from this are not the ones actively trading in IP addresses. They are the ones that were allocated address blocks years ago — through legacy allocations from RIPE or ARIN — and have never revisited them.

How businesses end up with unreviewed IPv4 holdings

Legacy technology companies, telecoms operators, and large corporates were allocated address blocks in the early days of the internet when the approach was to allocate generously. A business might have received a large block when it only ever needed a fraction of it.

Acquisitions add to this. When one business acquires another, IP address blocks from the acquired company end up on the balance sheet at nominal value. The team that understood what they were gets absorbed or moves on. Nobody is looking at the RIPE database wondering if there is value sitting there.

What the market looks like

IPv4 addresses trade in a range depending on block size, region, and current supply and demand. The market is not perfectly liquid but it is real. There are specialist brokers, established transfer processes, and enough transaction activity to establish pricing benchmarks.

A business sitting on a meaningful block of unused addresses — especially one acquired through legacy allocation or acquisition — may be carrying a material asset at zero on its books.

Leasing is also an option for businesses that want to retain their allocation but generate income from capacity they are not using.

What tends to happen when this is looked at

The pattern is consistent. A review of holdings against actual usage identifies surplus capacity. The surplus is either sold or leased. The process, once the right introduction is made, is typically straightforward.

For businesses that have been operating for more than fifteen years, have grown through acquisitions, or started as technology or telecoms companies, it is usually worth finding out what is there.