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IPv6 Transition - Economic Aspects (by IGRP group 2008 - IPv6)

The imminent exhaustion of IPv4 addresses will affect the networks at different times, in contrast to the Y2K specific timing. It will affect many stakeholders, from Tier-1 backbone providers, large enterprises, governments and ISPs networks to the final user.

The costs for implementing IPv6 vary in function of requirements and deployment plan. In general terms, the costs come from software and hardware, training, application porting, consulting services, and operational costs. These operational costs are for example, internal versus external, peering, transit, DNS, provision to the desktop, web services, hosted services, and others. Experts of the Internet community forecast that in the medium or long term, IPv6 can potentially diminish operational expenditure for network administration. However, at the beginning, IPv6 implementation is likely to increase capital and operational expenses, due to internal training and skills upgrading, costs of running dual-stack interoperability, potential lack of vendor and back-office tool support, and increased hardware costs or upstream transit.

The investment on IPv6 adoption has many issues involved, it could be seen from the view of the return on investment (ROI), being worried about the expenditures without thinking on the costs of not integrating IPv6, or how IPv6 can better position the company strategically. Nothing can be easily calculated to make the plan but the challenge and the need is that the network must be ready to support IPv6 to benefit from its use.

Many people, mostly of the industry sector, think that a ROI for IPv6 must be calculated before adoption, and they affirm that there is not a strong enough ROI to deploy IPv6. This perspective, is hiding the true value that IPv6 brings to our networks. ROI calculations are generally applicable to service deployment and to network operation. IPv6 in itself is not a service; it only supports services, helping the networks to enhance their ROI on operations and services. It is a know fact that IP infrastructures have a transcendent role and they are considered critical and strategic assets.

Companies should be aware of the opportunity that IPv6 creates to be more competitive in the production of technology services and products. This new protocol performs well-defined functions in a more cost-effective way, such as managing large numbers of devices, or it will support new, scalable services such as multicast-based content delivery, end-2-end communication restoration, network plug-n-play. Thus, IPv6 comprises a new era where the markets may be reshaped and the leaders of IT innovation world could be redefined, among other things.

The RTI International made a detailed study on the estimated budget for IPv6 transition costs in United States, the total amount predicted is $25.4 billion (in 2003 dollars) from 1997 to 2025. Their paper details the average costs per stakeholder. In general terms the categories described are infrastructure and application vendors, ISPs, government users and non-government users.

Below are some of the figures:

* Affected staff of the stakeholders, weighted average salary per year in the Computer and Mathematics Science occupations: USD 67.996.
* Training costs per employee USD 2000 for ISPs, vendors and users in general.
* RTI estimates that ISPs will spend USD 36 million to transition to IPv6.
* In the case of Internet users will take up USD 1.7 billion of expenses.
* Non-government users: USD 21.6 billion.
* Infrastructure vendors USD 1.38 billion.
* Application vendors USD 593 million.

Key clues when costing IPv6 Transition

1. Evaluate the existing network infrastructure and take inventory of all hardware that cannot be upgraded to IPv6, as those will represent a major capital investment.

2. As for hardware, software needs to be evaluated. The first to be considered is the Operating Systems (OS) and then the particular applications. As most recent versions of most OSs support IPv6, this may not represent a big economic issue. On the other hand, it is quite probable that organization-wide applications (especially custom or specifically designed applications) do not support IPv6.

3. Specifying some minimum IPv6 requirements on new equipment or equipment currently in selection or buying process, will be a good practice to reduce future upgrading investment. Same applies for equipment replacement parts or RMA processes.

4. Including IPv6 in the organization training agenda is also a smart choice, as this will provide the know-how and readiness for the IPv6 deployment phase and operation. What is more, this knowledge will be used to develop a strategic transition plan from IPv4 to IPv6 and to identify milestones and stages on that transition. It is also crucial to include the operational cost of maintaining a dual stack (IPv4 & IPv6) scenario.

5. From the public services perspective, the organization must identify which of those services are meant to be given over IPv6 and which are not. For those to be given over IPv6 the question is what the cost of re-writing or upgrading them to support the "new" protocol is. For those to be given over IPv4, the question is whether there is any transition method that could be used that reduces the need and therefore the cost of application re-writing or upgrading.

6. Finally, evaluate the need and costs for client-side hardware & software upgrades or the viability of using transition mechanisms such as tunneling, IPv6-over-IPv4, or others.

A number of worldwide organizations involved in developing IPv6 strategies have identified the following as the three most common lessons learned:

* Early planning means reduced costs.
* IPv6 technology is mature, but some challenges remain in operation aspects.
* Product availability remains an important gating factor and can be mitigated through close vendor relationships.

In considering transition to IPv6, it is important that network operators should identify the challenges of possible risks related to legal and technical issues, and make a detailed plan of action that mitigates and prevents those risks. Legal issues could come up if users privacy or security is compromised as a result of flawed transition and implementation strategies for the new technology.


ATIS Readiness Plan for IPv6 Transition

IPv6 Transition, A mandatory step towards next generation networks ..., China April 2006.

Could a U.S. Shift to IPv6 Cost $75B?

ATIS Readiness Plan for IPv6 Transition (whitepaper).

"Economic considerations in the Management of IPv4 and in the Deploy...". OECD.

IPv6 Economic Impact Assessment” made by RTI International for the NTI (National Institute of Standards & Technology), October 2005.

Book: “Global IPv6 strategies. From Business Analysis to Operational Planning”. Authors: Patrick Grossetete, Ciprian Popoviciu, Fred Wettling. CISCO. Pages 83,84, 355,356.

ATIS Readiness Plan for IPv6 Transition. June 2008. (White paper) Pages 2 and 5.

Presentation “A mandatory step towards next generation networks” Beijing, China April 2006.

"Economic considerations in the Management of IPv4 and in the Deploy...". OECD. Page 44.

IPv6 Economic Impact Assessment” made by RTI International for the NTI (National Institute of Standards & Technology), October 2005.

Book: “Global IPv6 strategies. From Business Analysis to Operational Planning”. Authors: Patrick Grossetete, Ciprian Popoviciu, Fred Wettling. CISCO. Pages 83,84, 355,356.

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Comment by Nicolas Antoniello on April 14, 2009 at 6:23pm
Authors (IGRP group 2008 - IPv6): Ruth Puente, Atnafseged Zeleke and Nicolas Antoniello



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