Don't look for rapid ROI from IPv6
- By William Jackson
- Mar 29, 2006
Transitioning networks to the next version of the Internet Protocols could be a bargain, according to a recent study by RTI Inter-national of Research Triangle Park, N.C.
The report, done at the request of the National Institute of Standards and Technology, estimated the incremental costs in the United States at $25.4 billion (in 2003 dollars) over 25 years, most of that in increased labor costs.
'Although these cost estimates seem large, they are actually small relative to the overall expected expenditures on IT hardware and software, and even smaller relative to the expected value of potential market applications,' the report concluded.
RTI warned that its cost estimates were based on a limited number of interviews and should not be taken as gospel. But they illustrate the relative expenditures that can be expected.
The report focuses on IT vendors, service providers and end users in this country, including government. The lion's share of the transition costs, more than 90 percent, would be borne by users rather than vendors and network providers. Because home users will see little if any cost in the shift to IPv6, the bulk of that share will be borne by large enterprises, including government agencies.Bang for the buck
What will the country get for its $25.4 billion? Right now, it's hard to say.
'Because major applications for IPv6 have yet to emerge, it is more difficult to quantify their potential benefits,' the report said. RTI made a conservative estimate of roughly $10 billion in benefits, without specifically identifying what form those benefits might take. That's in part because different organizations will reap benefits differently, based on when and why they decide to exploit the new protocols.
The benefits figure could change dramatically as IPv6 networks are deployed, and new applications and devices are created to exploit their capabilities. But even if a killer app comes along, don't expect the new networks to be cheaper or easier to manage, a companion report from the Commerce Department warns.
'Many networks may not see a net reduction in costs for at least five or more years after initial IPv6 deployment,' NIST and the National Telecommunications and Information Administration said.
The government-specific cost for transition is estimated by RTI at about $5 billion over 25 years, with the most costly single year, about $600 million, coming at the midpoint of the transition.
Costs will be incurred largely because IPv6 is expected to coexist with IPv4 for the foreseeable future, and administrators will have to manage both network types.
'As a result, labor costs will constitute the majority of the cost of upgrading to IPv6 for users, and training will constitute the majority of these additional labor costs,' RTI said.
William Jackson is a Maryland-based freelance writer.