IPv6 cost estimates for end users: Part 3

End users – including small, midsize and large businesses – will spend $23.3 billion to upgrade to IPv6 over the next 25 years, according to a new report written by RTI International for the U.S. Commerce Department.

The RTI International study is the first to quantify the cost for U.S. businesses to migrate to IPv6, a long-anticipated upgrade to the Internet’s main communications protocol.

The RTI study says that end users – rather than ISPs, hardware or software vendors – will carry the brunt of the $25 billion investment in IPv6 that’s estimated over the next 25 years.

“Labor costs will constitute the majority of the cost of upgrading to IPv6 for users, and training will constitute the majority of these additional labor costs,” the RTI study says. “Training on the fundamentals and implementation of the IPv6 protocol will depend on individual staff’s relative needs based on past experience with IPv4 and potential future applications.”

IPv6 promises easier administration, tighter security and an enhanced addressing scheme when compared to IPv4, the Internet’s current protocol. IPv6, which uses a 128-bit addressing scheme, supports a virtually limitless number of uniquely identified systems on the ‘Net, while IPv4 uses a 32-bit addressing scheme and supports only a few billion systems

RTI estimates that the U.S. federal government will spend $1.7 billion on IPv6 migration, while commercial businesses spend $21.6 billion. Among businesses, RTI asserts that midsize and large businesses will spend more money on IPv6 than small businesses and home users.

“RTI believes that independent users, comprising home users and small businesses, will incur virtually no cost to move to IPv6 because they would gain IPv6 enablement over time without additional testing and installation costs,” the report says.

The biggest burden will be on midsized businesses, and most of that cost will be in core network operations and staff training. Training, in particular, will be a burden for midsized businesses.

“The cost per IT staff for midsized businesses will be higher than for larger businesses,” the report says. That’s because larger companies can spread their training costs over a larger group of people.

RTI breaks down the IPv6-related transition costs for end users as follows:

* Training: 24.4%

* Installation: 24%

* Network management software upgrade: 18%

* Network testing: 17.6%

* Maintaining network performance: 16%

The RTI study gives an example of IPv6-related costs for end users based on an IPv6 pilot project run by the Defense Research and Engineering Network (DREN). The Defense Department deployed IPv6 in the infrastructure of DREN and 12 connected sites. The process included upgrading networks, DNS software as well as server and desktop operating systems.

RTI says that it costs between $500 and $2,000 per router to expand memory required by IPv6. The Defense Department also spent as much as $2,500 for each staff member to be trained in IPv6. The upgrade required around 400 hours of labor and took nine months to complete.

“Because DREN had previous experience both testing IPv6 and working with operational IPv6 networks, transition costs are likely to be low compared to many other organizations,” the report says.

The RTI study provides a cost-benefit analysis of the conversion to IPv6. The RTI study follows last year’s mandate by the Office of Management and Budget (OMB) that all federal agencies must run IPv6 on their network backbones by June 2008. The Defense Department issued a similar mandate in 2003 to have all military networks transitioned to IPv6 by FY 2008.

To read the RTI report, click here. 

Coming up in our next issue of the Service Provider newsletter, we’ll look more closely at RTI’s estimates of the ROI that end users will get from IPv6.