Generally, there are two ways to get your hands on your own IP address space: buy or lease it. Each of these two approaches has its advantages and disadvantages. Deciding on buying vs leasing an IP address can be challenging. The decision depends on your current financial situation and business goals. Both directions will provide you with the connectivity you need, and both will require you to make expenses.
In this post, we will go through the advantages and disadvantages of buying vs leasing an IP address. The pros and cons approach will help you decide whether buying or leasing an IP address is for you.
Buy an IP address.
Attempting to get an IPv4 address directly from an RIR (Regional Internet Registry) such as ARIN or RIPE NCC can be pretty challenging. Although Local Internet Registry (LIR) members from an RIR could still get their hands on recovered IPv4 address space, the process of becoming an LIR member and requesting IPs can be time-consuming, challenging, and not easily accessible.
Another way to buy an IP address is via third-party traders, brokers, or providers selling IPs. Although this process means a higher initial expense, it can be a time-saver and more straightforward than becoming an LIR.
Buying an IP: Pros.
- Investment potential. Owning an IP address protects your company’s future presence on the Internet. Plus, a network commodity investment also improves your business equity.
- Full data traffic confidentiality and security. Many LIRs and ISPs have unintentionally given control of their IPs to bad actors such as spammers and hackers. They use these IPs for malicious activities, thus damaging the reputation of the IPs. Owning your IP address space ensures that only you have access to data traffic forwarded and requested by these IP addresses.
- When you buy IP addresses, you get complete control. With your total ownership of IP addresses, you have more leverage to make decisions on your own terms. You won’t need any prior approval from anybody. If you are leasing, the lessor agreements enforce their own terms on you, which you must strictly follow.
Buying an IP: Cons.
- CapEx can be a disadvantage for most. Buying an IP from a broker or third-party company can be initially more costly than renting an IP. Not everyone would want to pay hefty capital expenses but would rather spend on a monthly basis.
- Buying an IP is a commitment. For many people buying an IP can turn into a negative obligation. If the IPv4s are not used anymore due to other potential opportunities or migration to IPv6, the IP (or IPv4) owner will be left with an unused IP address waiting to be sold.
Leasing an IP address.
In a nutshell, when you lease an IP address, you are paying to use it (sometimes a fresh IP) but not to own it. If you are looking for a few hundred or thousand IPv4 addresses or millions of IPv6 (IPv4 vs IPv6) to use for a determined time, then your best strategy is to rent the IPs from an LIR or third-party provider. Some leasing services would even (depending on the term) allow the lessor to keep the IP block in case of future needs.
Leasing an IP: Pros.
- Leverage OpEx. When you rent an IP, you won’t need to pay an initial hefty sum of money or commit financially (CapEx). Instead, you can leverage the many benefits of an Operations Expenses approach, such as predictability and flexibility.
- Renting provides you with predictability. When you lease an IP address, you’ll know the monthly expenses you’ll need to pay and won’t worry about unexpected payments.
- Renting an IP address offers you flexibility. You can usually (depending on terms) opt-out anytime without any significant loss. Some lessors might charge a small fee or cancelation penalty, but that is insignificant compared to ending up with a few expensive unused IP address blocks.
- Renting an IP address is easy and fast. Renting an IP address helps you bypass the entire slow and cumbersome process of RIR approvals.
- Perfect for IPv6 migration. When migrating to IPv6, leasing allows customers to temporarily use IPv4 address space without spending the extra capital.
Leasing an IP: Cons.
- Leasing an IP gives you less control. Renting an IP address involves risks from both parties. For instance, you might need (as a lessee) the IP addresses longer than the established term, or the IP leasing provider (lessor) might need the addresses before the end of the term.
- Challenging management. Whenever you would need to re-route traffic or advertise your IPs on a new network, you would need prior approval from the owner. You would need to prove ownership with a Letter of Authorization (LoA) or permit.
- Leasing is not always a good option in the long term. Depending on the lease terms, the cost of leasing can be higher than buying an IP address for the long term. In addition, when you are paying a monthly rate for renting, you are not building equity.
- Malicious IP rental providers (lessee) intent. Some IP leasing providers inadvertently allow their IP addresses to be used for spam or any malicious behavior. Such providers might also recycle IPs, especially IPv4, that were previously blacklisted.
Deciding whether buying vs leasing an IP address space depends on your goals and current financial situation. In basic terms, both directions will provide you with the necessary network connectivity for your goals, and both will require expenses, either CapEx or OpEx.
In summary, buying an IP address requires more significant initial capital expenses; for some people, this can be an investment potential, but for others, an unneeded commitment. Generally, with your own IPs, you’ll have more traffic confidentiality and control. Leasing an IP address, on the other hand, saves you from the initial hefty payments but can turn out to be more expensive in the long term. On the positive side, renting an IP also gives you more predictability, flexibility, and can be easier and faster to start.
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