- Companies holding unused IPv4 address blocks can generate recurring revenue by leasing them, offering an alternative to outright sale.
- Leasing involves practical, policy and reputational considerations that influence whether it suits a company’s long-term strategy.
‘IPv4 Leasing’ and Why It Matters
IPv4 addresses, the 32-bit identifiers that underpin most internet traffic, reached scarcity when the global pool was allocated to regional internet registries in 2011. With no meaningful new supply, unused blocks can sit dormant or be monetised. One option is leasing, where a company with surplus addresses acts as a “lessor” and rents address rights to another entity that needs them. Leasing lets holders retain ownership while earning income, a rationale particularly relevant when future internal needs are uncertain.
Leasing arrangements resemble real estate in some respects: the lessor retains title while the lessee gains temporary rights. Unlike selling, which converts an address block into a one-time payment, leasing provides an ongoing revenue stream that can align with organisational financial planning. It can suit companies unsure about future network requirements but seeking to derive value from idle assets.
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Practical Steps to Leasing Unused IPv4 Address Blocks
- Inventory and compliance review. The first step for any organisation considering leasing is to audit its IPv4 holdings and confirm which blocks are genuinely unused. It is essential to verify that these blocks are registered correctly and that any reassignments adhere to regional registry policies. For example, the American Registry for Internet Numbers requires that any leasing or reallocation of space be recorded appropriately in its database and warns against using leasing as justification for additional allocations.
- Choose a leasing platform or marketplace. Many organisations opt to work with a marketplace or broker that specialises in IP leases rather than handling all transactions directly. These platforms connect potential lessors with lessees, manage contracts and may provide services such as vetting lessees and ensuring clean address reputations. Marketplaces vary in scale and focus, and due diligence is needed to confirm credibility and pricing models.
- Establish terms and safeguards. Clear lease terms are essential to manage risks. Market examples show that lease agreements typically specify the duration of the lease, pricing and conditions on use. Companies may also define controls to prohibit malicious activity, as damage to the reputation of an IP block can reduce future leasing or operational value.
Case Study: Leasing After Consolidation
One enterprise that migrated significant workloads to cloud infrastructure found itself with a surplus of IPv4 addresses. Rather than selling these blocks, it leased them through an established marketplace. The company recorded the leased blocks as reassignments and negotiated terms that allowed it to reclaim addresses if internal demand revived. This approach balanced short-term revenue against operational flexibility. It also highlighted the need for vigilant reputation monitoring, as lessors bear risk if leased addresses are misused by lessees.
Risks and Challenges
Leasing is not risk-free. Companies must monitor leased addresses for malicious use, which can lead to blacklistings that reduce value or require remediation. Additionally, some regional internet registry rules limit how address space may be justified for new allocations; leasing alone is not accepted as a usage rationale in certain regions.
For companies holding unused IPv4 blocks, leasing can generate recurring revenue without permanent divestment. However, success depends on careful inventory management, clear legal and contractual terms, and ongoing operational oversight.
