- IP addresses are a service enabler for ISPs and cloud providers, but are significantly undervalued compared to other service enablers, such as commercial rent, according to Lu Heng, CEO at LARUS ltd.
- Heng clams that if executives involve themselves in the policy decisions around their IPs, the value of IPv4 addresses could surge 300 times, to $60 trillion.
IPv4 addresses are significantly undervalued, the LARUS Ltd CEO told the audience at Capacity Europe.
At the Capacity Europe event in London last week, Lu Heng, CEO of LARUS Ltd, called for a major reevaluation of the value of IPv4 addresses. He argued that these digital assets are currently “massively under-valued” and suggested that if executives in telecoms and cloud companies take a more active role in managing their IP resources, the market could unlock “trillions of dollars” in wealth.
“Today, an IPv4 address costs about $0.30 per month to lease, while the average cloud server, which depends entirely on that address to function, generates $300 per month in revenue,” Heng explained. He emphasized that this discrepancy means IPv4 accounts for a mere 0.1% of the revenue it enables. By comparison, he noted that commercial rent—another service enabler—often consumes 30% of a business’s revenue.
Also read: Interview with Lu Heng: The man who wants to decentralise IP addresses and save the internet
Heng attributed the undervaluation of IPv4 addresses to a lack of executive involvement in IP management, saying that decisions around these assets are typically left to technical staff. “The executives of the company, the board, never even heard about what a Regional Internet Registry is,” he said, referencing the organizations that manage IPv4 allocation. Heng believes that without leadership oversight, key financial opportunities are being missed.
He also criticized the policies of the Regional Internet Registries (RIRs), which he said restrict true ownership of IPv4 addresses. He claimed that if these policies were reformed to allow for more liquid trading of IP addresses, the value of IPv4 could soar by “300 times.” In the case of tier-one telecoms like Cogent, Heng noted that their IP holdings already represent a significant portion of their market value, suggesting that even a modest appreciation in IP prices could exceed the total market cap of some telecom firms.
Heng urged executives to engage in discussions and take control of IPv4 resources, concluding that “unlocking the hidden value of IPv4 addresses” could reshape the telecom and cloud industries. See his full speech above.
