Podcast Episode 1: Talking IPv4 addresses

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Podcast episode 1: Talking IPv4 addresses

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Lisa:
Hey everyone, and welcome to the very first episode of the EmXcore podcast. A podcast where we will invite customers, partners, or anyone of whom we think has something interesting to say or some interesting views on the internet and networking industry.

We have our first guest here today, the co founder and CEO of Heficed, Vincentas Grinius. Welcome you are our very first guest. How are you doing? You’re working from home as well, I believe, right?

Vincentas:
Very well, I can’t complain, except that we need to be at home. I mean it would be really great to be able to go out for some nice dinner on a Friday evening, but in these times we can only have dinner at home.

Lisa
So can you tell us a little bit about yourself and about Heficed?

Vincentas:
I’m one of the co-founders of Heficed. We operate since 2008, by the way Heficed is our new name because we have rebranded in 2019 last year.

Previously we were called Host one plus and with last year’s rebranding we also brought a solution which we call IP address market. Which helps, let’s say, to keep the internet more sustainable. And also helps businesses to scale their IP needs.

Lisa:
Because, most people that listen to this probably will know, but the IPv4 addresses are running really low. I think they were created back in the 1970s, somewhere way back. And back then no one could expect that we would actually need so many of them.
But the fact that they are running out doesn’t really mean that they are actually all being used at this moment. Right?

Vincentas:
Right. So right now, out of 4.3 billion IP addresses, we still have 182 million IP addresses that are unused but even if they’re unused they are allocated to the actual enterprises.

Lisa:
And at Heficed you came up with an IP address solution, right? Can you explain a bit more?

Vincentas:
Yeah. So, our aim here and our focus was actually to make a platform which would be helpful for the enterprises, to scale their businesses despite the fact that they do not have IP addresses. So right now at the current situation we have prices to buy IP addresses around 20 to 25 dollars per address. Imagine you need 10,000 IP addresses, you would pay from 200000 to 250000 dollars. And it’s a huge amount of money even if you are talking about hundreds of thousands of IP addresses, then you have even a larger amount.

So for us the focus is to become a number one IP-lease provider and to actually introduce IP-lease as the market standard. Because we see the trend now, but before (like three or four years ago) corporations even did not think about ip-lease, but now they are considering it very heavily because in most of the cases, companies either keep those IP addresses if they are allocated to them as well as a strategic asset.

Either they are keeping them for the future. So our idea was actually to come up with a platform that would solve not just the IP shortage, but would solve an even bigger problem. So we deliver extra revenue for the guys who actually have the IP addresses free of use. And then we actually protect against spam and abuse, those IP addresses until they are listed in our IP address market. And then we, off course, help the other businesses to scale up their businesses if they are short on IP addresses.

Another thing is that we are also developing a lot of features on the top what we have right now for businesses too take away IP addresses and use it on their networks. This year we have a so-called development period, where we are actually going to roll out a lot of updates and a lot of new features on the top. They would for instance be able to use IP addresses on their networks. Also, they would be able to bring their own IP addresses and use it on our infrastructure or other networks. And if we have some of them free we will be able to monetize it. I mean, we have a bunch of features that we will introduce this year.

What we see right now is that the platform is way more succesful then we initially thought, so that is a good sign.

Lisa:
So are you the first company that actually does something like this?

Vincentas:
Well, yes. I mean there are a lot of IP brokers. I mean, the internet community is not so big, we know each other. If you meet some guy in a conference you surely met him at some other event before. The internet community, it’s a very interesting fact, that the internet is so big and so huge, but actually the guys who are committed to developing the internet is just a very small group of guys.

So again, coming back to your question, there are a lot of IP brokers out there, but the solution that we are bringing to a market is completely unique. And we just thought that doing a plain IP-lease and giving the IP addresses to businesses is not what we actually want. We want to go a deeper, and we want to be more advanced, much more advanced. And connect with technologies that are available right now. Talking about the actual IP management, talking about registry maintaining or even a BGP session monitoring and management, that’s the key things that we are focusing on. And we want to bring much more of a value than just plain IP-lease.

Lisa:
Yeah, exactly.

Vincentas:
Because you know again, our aim here is to introduce and educate enterprises to think about IP-lease as a market style

Our aim here is to introduce and educate enterprises to think about IP-lease as a market style

Lisa:
You mentioned you wanted to make the internet more sustainable and of course treating IP addresses like this is already a start.

Do you think IPv4 is here to stay for a little bit longer? Of course, you now have IPv6 that is available as well. Do you think those two will coexist or do you think IP four will slowly disappear?

Vincentas
So let’s analyze some data. Back in 1999, IPv6 was introduced because some guys already thought maybe IPv4 is not going to be enough. Even if we would rewind the time even further IPv4 was the thing where everyone thought it was going to be more than enough.
But now we have more people than IP addresses.
So it’s definitely not going to be enough. However, now in 2020 we have actually only 25% of the IPv6 addresses have access to the internet. So it’s still a long way to go.

Seeing the analysis of how the actual IPv6 was adopted during the time, we can see that the biggest jump was when the hyperscalers adopted IPv6. Predicting based on the data that we have gathered so far, I think that we still need two decades to actually get IPv6 fully accessible over the internet. Talking about the future of IPv4, I think that it’s not going to go anywhere. It’s still going to be available and right now what we see is that it’s going to become a dual stack, so IPv4 and IPv6 are being used both.

Lisa:
Yeah, they will coexist probably. You mentioned something about the data that is interesting, because I remember last time you told me there was not that much data about IP addresses and that you were actually asked to help with a big study from a university in, was it Saarbrücken?

Vincentas:
There is not a lot of data in terms of the actual IP price. We have a basic understanding of what are the rates of IP addressed. I mean we gather data in terms of what the minimum and maximum prices are, what is the medium and stuff like that. And we have been contacted by the Max Planck Institute based in Saarbrücken, who are doing a study on this. And we are actually going to publish it. We want to be one of the first sources that would publish the minimum-maximum prices for each of the segment, down from/24 to, let’s say, /16 and create that market driven price. In our solution we do not influence any price. The actual IP holders enter the pricing themselves.
And this is how we try to create this ecosystem where we have a transparent pricing and the end customer knows exactly what the IP holder wants to charge.

And again, there is not much data in terms of what should be the optimal price for the IPv4. So we’ve been contacted by the Institute in Salzburg and we help them to gather the data and provide them the data of the commercial side of things.
And we see that it’s going in the right direction. I think that in the near future we will see IP-lease as the new normal for telco’s, ISP’s or any other network providers.

Lisa:
Nice. So exciting too to actually be part of one of those big, big, big studies as well.

Vincentas:
Definitely.

Lisa:
Do you see any hesitation in companies with regard to leasing the IP addresses instead of buying them? I think up till now it’s usually more the standard to buy those IP addresses. And I think people are usually creatures of habit, so they will always stick to what they know. Do you notice that as well in this, in this case?

Vincentas:
Yeah. That’s very good question. When you talk about IP-lease most of the businesses think that, Oh you know my network is not going to be safe because I will be dependent on the third party.

But if you look closer on how the internet is built right now. Let’s have an example. Most companies use hyperscalers for their hosting needs. Putting their website, moving the databases or doing any researches etc etc and using the actual hyperscaler right? And if you think about it, the hyperscalers own the hardware, right? They own the actual data centers. So in this case, you know, IP-lease can be seen from the same angle. You just simply use some third party.

So that means that the whole internet actually is build on cooperation and making sure that the things are tied together. So we can take, let’s say hyperscalers, we can take the hosting providers who actually provide that infrastructure for their customers. You can even take telco’s and ISP’s who actually buys the IP transit and lease the fiber. Just everything, is totally shared.

And we should, should think about this from that perspective. I mean with the internet, you do not buy the whole fiber. You do not dig the holes to put the fiber in and route the traffic. You rent it, you rent the fiber, you pay your bills every month. So why can’t IP addresses be at the same level, you can lease it.

And if you create a super sustainable ecosystem, for the IP address lease, then I’m not sure what would be the problem in terms of the actual IP sharing.

You do not buy the whole fiber. You do not dig the holes to put the fiber in and route the traffic. You rent it, you rent the fiber, you pay your bills every month. So why can’t IP addresses be at the same level, you can lease it.

Lisa:
Especially if, what you mentioned, you put the extra security on there and the anti-spam and everything. And it makes it easier probably as well for companies to grow. Especially since prices are going up, then it’s easier to lease them.

Vincetas:
The prices will go up because IP is a limited resource. And the internet penetration is growing and there are businesses relying on the internet.

Lisa:
Especially now. So how sustainable do you think the internet is at this point?

Vincetas:
The pandemic crisis showed us that, for example, in Europe if many Europeans use the internet we are unable to use Netflix on Ultra HD or high quality. So I think we still have a lot of things to optimize, a lot of things to consider in terms of how the networks are built. And I think that practice makes perfect, so we just need to practice the best things and share the knowledge and share the actual resources with each other.

Lisa:
Yes, I think a great takeaway from this is that the internet is basically one big corporation where we have to work together and learn from each other.

The internet is basically one big corporation where we have to work together and learn from each other.

Vincetas:
Exactly.

Lisa:
Well, thank you so much for Vincentas for being our first guest and for sharing your story with us so clearly. I really appreciate it. Thank you.

Vincetas:
Thank you very much, it was a pleasure

Lisa:
And for the people listening, thank you for listening to this very first episode. Please let us know what you thought about it or if you have any suggestions for our next episode, hopefully until the next one.