Internet addressing space is running low, but the newest version of Internet Protocol --IPv6 -- promises to solve the problem and help businesses run more efficiently.

The American Registry for Internet Numbers (ARIN) warned in May that the Internet is quickly running out of addressing space and that the Internet community needs to start moving to IPv6.

The chances are that your company relies on IPv4. With its 4.3 billion addresses, IPv4 is the most widely deployed protocol but cannot serve worldwide demand for IP space, particularly as small and mid-size enterprises increasingly use IP-enabled devices to serve their business needs.

IPv6, also referred to as the new Internet standard, will provide a near infinite number of addresses as well as better security, network management and mobility for businesses.

When to move to IPv6

IPv6 will one day be necessary to connect to the rest of the world, including accessing Websites or communicating with vendors and clients. Your company probably doesn't need to panic yet if it's running on IPv4, according to experts, but IPv6 should be on your radar.

Forrester Research senior analyst Robert Whiteley notes that fewer than 2 percent of North American enterprises need to move to IPv6 because they are running out of addresses. But companies doing business with federal agencies, which are under a mandate to become IPv6-capable by June 30, 2008, need to start transitioning to IPv6 now, he says. Businesses will follow the government in adopting IPv6, many experts predict.

Otherwise, most companies have plenty of IPv4 addresses and can use network address translation to create private addressing, Whiteley maintains.

"I don't have a crystal ball, but I will guess that there will be pockets of people running IPv4 for years and years," says Paul Francis, associate professor of computer science at Cornell University and the inventor of network address translation. "I wouldn't go making my transition plan, certainly until I know that my ISP isn't offering IPv4 services, or [the company is] clearly making money off of IPv6 services."

A smarter Internet Protocol

Proponents of IPv6-related technologies say that the revenue and profits generated by using a smarter Internet Protocol -- not fears over losing address space -- should drive businesses to adopt IPv6.

"The overall vision is that IPv6 is coming and there are advantages, so let's not wait," says Paul Charron, vice president of product management for Hexago.

Hexago provides network appliances called gateways that allow interoperability between IPv4 and IPv6 networks. Gateways prevent companies from having to totally upgrade to IPv6-supported devices and operating systems. Instead, IPv4 networks can interface with IPv6 networks through a device.

Your business may already have IPv6-ready technology. Operating systems such as Windows Vista and most network devices rolled out within the last three years are IPv6 supported, according to Whiteley.

IPv6 allows greater companies greater mobility and remote networks management. For example, Command Information, a Virginia-based IPv6 solutions company, used IPv6 technology to extend the network of a company that manages buildings far from its home office. The remote network used IPv6-enabled sensors and actuators that were mailed to the building, saving the company the cost of flying staff out to the location. The building was set up and managed remotely, says Command Information President and CEO Tom Patterson.

"The small businesses are really in a good position to profit from this because they're faster to react than the larger companies," Patterson says. Companies "can do things the old way, but we know how to do them better, faster and cheaper."