IPv6 cost estimates – the ROI: Part 4

The $25 billion that U.S. businesses will spend on IPv6 over the next 25 years will not be money going down the drain, according to a new report that estimates the upgrade to the Internet’s main protocol will result in potential benefits of more than $10 billion per year.

These cost and benefit figures for IPv6 are outlined in a study compiled by RTI International for the U.S. Commerce Department. The RTI study is the first to quantify the cost of IPv6 migration for U.S. businesses as well as the ROI.

RTI says that the benefits of IPv6 include VoIP, remote access products and services, and improved network operating efficiencies. IPv6 also will result in reduced costs for security, enhanced QoS and new mobile data services.

“There is a general consensus by stakeholders participating in this study that IPv6 is technically superior to IPv4,” the RTI report says. “However, there is great uncertainty about the timing, magnitude and distribution across stakeholder groups of potential benefits.”

IPv6 offers many advantages over IPv4, the Internet’s current protocol, including easier administration, built-in security and an enhanced addressing scheme. 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

One of the key benefits of IPv6 could be reduced information security costs.

“Movement to the use of an end-to-end security model could help save major enterprise costs, both in downtime and preventative measures,” the RTI report says. “IPSec, an IP-based security protocol that is more common in IPv6 systems, would likely be a part of this movement.”

Another area where IPv6 could cut costs is in increased network efficiencies caused by the removal of network address translation (NAT) devices.

“Enterprise spending on NAT workarounds is quite significant according to estimates from participating stakeholders that range up to 30% of IT-related expenditures,” the study says.

End users could save as much as 20% or more on their telephony expenditures by moving to VoIP, the study says. While VoIP is possible with IPv4, RTI says that IPv6 could facilitate the move to VoIP.

Another benefit of IPv6 is that it can be used for remote access of new devices such as appliances or automobiles. Cost savings may come from improved monitoring of these devices as well as lower service costs.

“Automobile and appliance owners could increase the functionality and life expectancy of their products by using remote monitoring and support services,” the study says.

New mobile data services are another potential benefit of IPv6. RTI points out that mobile phone service providers are moving to IPv6 because they need large blocks of IP address space for the new products they plan to offer.

New applications are what most excite the IPv6 advocates interviewed for the RTI report.

“Widespread adoption of IPv6 could lead to a world of connected devices,” the RTI study says. “Individuals could manage their heading and cooling systems, take stock of their refrigerator or access files from their home computer while from another country. Companies could offer constant monitoring services to automobile and appliance owners to determine the best possible time to get certain services performed. Meteorologists could use sensors with IP addresses on cars to more accurately predict and report current and future weather.”

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.