Renting IPv4 Addresses: Pros and Cons for Businesses

1. Overview of the Current IP Address Market

In recent years, the IPv4 address market has undergone significant changes. Two main reasons for this can be identified: growing demand for IP addresses on the one hand, and a limitation in supply due to the finite number of IPv4 addresses on the other. Let’s briefly look at both factors.

• Limited supply.
  The architecture of the IPv4 protocol, based on 32-bit encryption, mathematically limits the number of possible IPv4 addresses to 4,294,967,296.
  Originally distributed among five regional internet registries (RIPE, ARIN, APNIC, AFRINIC, and LACNIC), the available pool of IPv4 addresses is now nearly exhausted. In other words, the moment when all IPv4 addresses in the internet space are allocated to LIRs and end-users is fast approaching.

• Growing demand for IPv4 addresses.
  At the same time, the demand for IPv4 addresses is increasing as the pool of available addresses is depleted. This is primarily driven by business globalization, the growth of the IT services and technology sectors, online services, streaming platforms, and the expansion of IoT (Internet of Things) devices.
  Moreover, many companies are opting for dedicated IPv4 addresses for their servers to enhance security.

As a result, companies expanding their infrastructure or in need of additional IP addresses to maintain business operations inevitably face a key question: how should they structure their network infrastructure? At this point, business owners and executives must decide between purchasing IP blocks or renting them.

Overall, renting IP addresses at a certain stage can give businesses the flexibility to respond to current needs without making large investments or reducing liquidity. However, like any decision, renting has its pros and cons, which we will explore in this article.

2. The Benefits of Renting IPv4 Addresses for Businesses

Among the main advantages of renting over purchasing IP addresses is the cost-effectiveness of the solution. The market is currently experiencing significant price fluctuations for IP blocks, largely due to the aforementioned supply shortage. If a company is just starting out, large capital investments may not be a viable option. Therefore, for small businesses, projects, and startups, renting addresses allows for the creation of the necessary network infrastructure without significant expense.

Another important advantage is scalability. Renting mechanisms, especially through large, reputable platforms, allow businesses to easily adjust the size of their network infrastructure, expanding or reducing the number of addresses based on current requirements. This is facilitated by the third factor.

The third factor is speed of processing. Since the block remains the property of the original owner in rental agreements, there is no need to formalize a transfer. Additionally, large rental platforms automate and simplify processes such as block selection and reservation, contract processing, rental payments, etc. This allows businesses to quickly adapt to changes in their needs, as noted earlier.

Another advantage of renting that must be mentioned is reduced administrative burden on the company’s internal specialists. When renting through a large platform, all matters related to IP address management remain with the address owner, and professional brokers often have certified specialists at their disposal. Renters are relieved of any administrative or technical concerns related to IP address management.

All these factors make renting IPv4 addresses a flexible, cost-effective, and scalable solution. Renting is especially suitable for companies and startups that: a) are uncertain about their long-term IP address needs, and
b) want to minimize initial investment during the early stages of business development.

3. Drawbacks and Risks of Renting IPv4 Addresses

At the same time, it is important to discuss the drawbacks and risks that come with renting IP addresses. Let’s identify the main ones.

• Financial costs.
  While renting addresses is a more cost-effective option in the short term compared to purchasing, this changes in the long term. At a certain point, rental expenses can exceed potential purchase costs (business specifics should be taken into account for accurate calculations).

• Potential usage restrictions.
  Address block owners often impose limitations on the use of addresses, such as restricting the launch of certain services, like mail servers. This can become a barrier for companies looking to grow in certain directions. Additionally, since rental agreements do not transfer any rights to the address block to the tenant, this can become a problem for companies undergoing reorganization. For instance, if a company needs to transfer an IP block from one division to another, they will need to agree with the block owner and renegotiate the rental contract.

• Limited control over IP addresses.
  Since rental agreements only grant temporary access to and use of the rented property, companies renting IP addresses cannot be guaranteed that the owner will not decide to stop renting the block. This creates a significant business risk.

• Address “cleanliness” risks.
  Lastly, it is important to mention the risks associated with the “cleanliness” of rented address space. The address provider must ensure that the addresses have not been used in illegal activities, such as spam, malware distribution, etc. Unfortunately, not all companies have qualified specialists to verify the provided addresses and take the necessary steps to clean them.

However, when renting addresses through large platforms, this risk is usually minimized, as these issues are handled by platform specialists.

4. Conclusions and Final Thoughts

Renting IPv4 addresses in today’s business environment is not just a tool for rapidly scaling infrastructure but also a strategic choice for many companies that seek to reduce initial costs and maintain flexibility. For small companies, startups, and projects with uncertain long-term needs, renting is often the optimal solution, allowing them to avoid the time and effort required for purchasing and managing IP blocks.

However, in the long term, companies with stable, high traffic volumes may find that purchasing IPv4 addresses becomes a more advantageous option. Once rental payments start to equal or exceed potential purchase costs, the need to revise the strategy becomes clear.

Particular attention should be paid to selecting rental partners. The market is saturated with offers, and not all of them are equally reliable. Choosing large platforms with a proven reputation is an important step toward minimizing risks associated with address cleanliness, transaction security, and technical support. Renting through such platforms helps mitigate risks related to undesirable IP address histories and reduces the load on the company’s internal resources.

Ultimately, renting IPv4 addresses is a decision that requires careful consideration. For companies operating in highly dynamic and uncertain conditions, it remains a convenient and flexible tool. However, businesses with clear, long-term plans for network infrastructure usage should consider purchasing IP blocks as a more stable and economically sound solution that offers full control over resources.