Understanding costs: AWS's new IP space charges & savings
In a significant move at the end of July 2023, Amazon Web Services (AWS) announced a forthcoming change to its billing practices related to IP address usage. Starting February 1, 2024, AWS customers will notice a new charge on their bills connected to their public IPv4 addresses. This cost applies not only to the IP addresses actively in use, but also to those reserved within a user's account, potentially leading to unexpectedly high costs.
Decoding the new charges
According to the official AWS announcement, the company is implementing a charge of $0.005 per hour for each public IPv4 address, amounting to substantial annual costs. Specifically, enterprises using AWS's IP resources can expect the following additional charges:
- - $0.12 per day
- - $3.60 per month (based on a 31-day month)
- - $43.20 per year
This pricing structure underscores a costly scenario, especially when compared to current market prices for acquiring or leasing IPv4 space.
BYOIP: a cost-efficient alternative
For organizations leveraging substantial public IP spaces, such as those requiring 256 public IPv4 addresses, AWS's new pricing policy could translate into an excessive $921.60 per month. However, there's a more cost-effective route: Bring Your Own IP (BYOIP).
BYOIP refers to a service allowing enterprises to import IP addresses they possess the rights to route on the internet. AWS's BYOIP, for instance, requires a minimum of a /24 prefix, equating to 256 IP addresses. This flexibility not only offers a financial reprieve but also sidesteps potential operational disruptions associated with IP address changes.
Leasing vs. purchasing: an analysis
Beyond the intrinsic control, BYOIP through leasing or purchasing presents a stark contrast in expenses. Purchasing a /24 IPv4 prefix involves a non-recurring charge around $10,000, whereas leasing stands at approximately $1,636 yearly.
To lease IPv4 space from an IPv4 broker may therefore save significant costs. For example, leasing a /24 range could cost roughly $137 per month, saving an impressive $784.60 monthly for each /24 range transferred to the public cloud—savings that compound significantly over time.
Breaking free from vendor lock-in
One of the capital benefits of BYOIP is the autonomy it grants enterprises. Instead of being restricted to a service provider’s IP space, and by extension, their service, companies can migrate their services seamlessly across providers or revert to on-premises solutions. This freedom is crucial, particularly when service requirements evolve or if pricing models no longer align with financial objectives.
By leasing IP space, organizations retain full control over their IP-related expenditures in the context of AWS or Microsoft Azure, ensuring not only cost-effectiveness but also operational resilience and strategic agility.
Concluding thoughts
AWS's introduction of charges for IPv4 space necessitates a strategic review of IP resource management. Embracing BYOIP services, whether on AWS or Microsoft Azure, offers substantial cost savings, enhanced control, and critical flexibility, reducing reliance on providers. Enterprises seeking to optimize costs and preserve system integrity in light of these new charges should consider the tangible benefits of leasing their IP space.
For more insights into how Prefix Broker can assist with your IP resource management and leasing, reach out to their expert team at sales@prefixbroker.com.
