Microsoft last week bought just over 600,000 IP addresses (a /10 block and a /11 block if you are counting) for $7.5 million from bankrupt Nortel. For a moment there it was everywhere on the web, a mild reminder of what happens during famine when gluttons hoard food. But what is really going-on here, and what does it mean in the near and longer terms? Well first let’s settle something: it is immaterial to Microsoft. Had the price been $7.5 billion or better yet $75 billion, I’d say that Redmond viewed as central to its survival having that block of addresses. But $7.5 million is pocket change and probably represents to Microsoft just a cheaper way than some other of doing the same thing. What it means in the long haul to the rest of us is yet more chipping-away of our facade of IT empire as we find increasingly complex ways to preserve IPV4 while China, for example, mandates IPV6.

If you aren’t up on this broader story it is simple — there are only around 4.3 billion IPV4 addresses yet a lot more than 4.3 billion people and digital Internet nodes already in the world. There are two ways to deal with this population problem: 1) move on to a new system with more addresses (IPV6 which has more than we think we’ll ever need but didn’t we think that the last time, too?), or; 2) hold the system together with a mixture of internal and external and static and dynamic IP addresses through that happy kludge called Network Address Translation (NAT). IPV6 puts your light switch or, for that matter, every individual light from your Christmas tree on the Internet and NAT can do that, too, but with a lot more effort and a lot less fun.

It’s not that we’re actually out of IPV4 addresses, either. The simple analogy here is to money. The economy is crap right now and yet all the economists talk about trillions of dollars being “on the sidelines” and “waiting” — though it’s never quite clear to me waiting for what. Same, too, with IPV4 addresses, which are all assigned, we’re told, but not all are being used, like those 600-odd thousand snapped-up by Microsoft.

I have no doubt those addresses are for Redmond’s cloud strategy, by the way. If they want to virtualize hundreds of thousands of customer servers they’ll need hundreds of thousands of IP addresses, simple as that. Microsoft actually thinks about stuff like this unlike, say, me.

There are plenty of IPV4 addresses either not in use or improperly in use today. I’m told that Verizon, for example, has two /16 blocks (128K addresses in all) that are external addresses assigned to internal nodes like printers. Those could all be recovered since they are being misused, or Verizon could sell them for close to $2 million, following Microsoft’s act of price discovery.

I’m sure there are millions and millions of IPV4 addresses to be regained just as I am sure that most of them won’t be because the rich don’t see themselves remaining that way by giving their stuff away for free.

Routers from Cisco and Juniper have been ready for IPV6 for a decade or more. In one sense it’s just a matter of turning it on. And doing so would bring us advantages in network performance and security, too. But that isn’t going to happen anytime soon in the USA because of the complexity of all those NAT layers presently in operation, but even more so because of the threat it poses to entrenched network administrators and IT directors.

IPV6, you see, doesn’t differentiate between the workgroup and the galaxy, so workgroup sysadmins and net admins might disappear in droves. This won’t go down well in an industry based on keeping CEOs ignorant and in fear of the network and continually adding IT labor whether it is needed or not. Entrenched IT will fight tooth and nail against IPV6, telling all the appropriate lies to keep us from moving forward until we’re a decade or more behind.

They — maybe you — don’t really care.

This won’t happen — can’t happen — of course in China or India, both of which will shortly need at least a billion addresses each for smart phones alone. IPV6 is their only answer. So thanks to their late entry in this Internet thing and our gleeful willingness to self-destruct, they’ll shortly be ahead and we’ll shortly be behind.

But Microsoft, thinking ahead, will have IP addresses to spare.