AWS Stands to Make Millions from IPv4 Address Rentals

Amazon Web Services (AWS) stands to generate significant revenue, potentially between $400 million and $1 billion annually, by charging customers for public IPv4 addresses amid slow adoption of IPv6.

The move to charge for public IPv4 addresses was announced by the cloud computing giant last year, with the implementation beginning on February 1, as previously reported by The Register.

AWS cited the increasing scarcity of IPv4 addresses and noted that the cost to acquire a single public IPv4 address had surged by over 300 percent in recent years.

The fee imposed is relatively modest – $0.005 (half a cent) per IP address per hour, translating to an annual cost of $43.80 per public IPv4 address, excluding any IP addresses brought to AWS using the Bring Your Own IP (BYOIP) service.

However, a technologist has estimated that AWS could rake in between $400 million and $1 billion annually from this charge across all users. This marks a significant shift from the previous practice of offering IPv4 addresses for free (with still 750 hours a month available at no cost in the AWS free tier).

The estimate comes from Andree Toonk, founder and CEO of network services firm Border0, who based his calculations on Amazon's own IP address range data. According to Toonk, AWS has at least 131,932,752 IPv4 addresses, valued at approximately $4.6 billion.

Toonk also conducted a scan of IPv4 addresses within the AWS network, estimating about 6 million active addresses. However, considering that many AWS instances may not respond to ping requests, the actual number of active IPv4 addresses could be double that figure.

Even with just 6 million active addresses, AWS could earn around $262.8 million annually from IPv4 address charges.

To arrive at the headline figure of $400 million to $1 billion, Toonk projected a "conservative" estimate that between 10 percent and 30 percent of the IPv4 addresses published in the AWS JSON are utilized for a year.

When asked for comment on these figures, AWS declined to provide specific estimates, referring back to its original blog post announcing the charges.