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Just as the original internet changed our lives, an unheralded standard is being adopted which will revolutionise the way we transact business.

You may have read reports over the past months that the world is running out of IP addresses. Up to now, internet connectivity and demand for IP addresses has been driven by the use of computers, in particular personal computers. While demand for PCs has been growing exponentially, it is now slowing. Now demand for IP addresses is driven by exponential growth in the use of mobile devices such as Smart Phones and Tablets. In 2010 the world population was estimated at 6.9 Billion people of which 5.1 billion were Mobile network subscribers. Compare that to just an estimated 1.5 billion PC users.

The majority of the world”s population now has the potential to be “connected” via highly mobile devices. The mobile Internet is surpassing the wired Internet in many developing nations enabling widespread access to Internet applications. This mobility is changing the way consumers interact socially and engage in commerce. This then produces increased data traffic and is producing exponential growth in the number of devices being used.

Many industry and personal IT applications now depend on cloud computing, a concept whereby people and businesses draw on shared store data and services via computing devices. This too is contributing to the changing balance of mobile versus desktop computing. But the success of cloud computing depends on the ability of many different types of devices to connect to the cloud using IP in the first place.

These changes are taking place against a backdrop of a slowing internet and the protocol for assigning IP addresses – IPv4 – reaching its limit. The last top level block of free IPv4 addresses was assigned in February 2011. If you can”t connect to the cloud then what happens to the cloud?

A relatively new internet protocol standard, IPv6, will address these issues and form the backbone of the solution to problems of connectivity and a slowing internet. IPv6 allows for billions more IP addresses. In fact, it has been said that the address space is large enough to assign a unique address to every proton on Earth. IPv6 has many key business implications, particularly for mobile data computing. It promises to support significant innovations in many aspects of B2B technologies and service delivery.

Far-reaching implications of an unassuming solution

What are the implications of a shift to ubiquitous IP accessibility? Mobile computing devices will become ever-present as their prices drop and their capabilities increase. A key need is that they will be networked. Unlike the majority of today’s networked computers, the current and future wave of devices will support a variety of network attachments. These devices can be networked in any number of ways, wirelessly, infrared, or by the traditional use of physical wires. This makes them an ideal candidate for internet data transfer technology provided by IPv6. The new standard provides a common protocol to allow functionality over a number of different networks. IPv6 gives the capacity for almost anything to be networked. Every device in your house including your television, light switches, electricity meter and fridge could all provide data over the internet and be controlled remotely. In effect, IPv6 means be everything can be connected to the internet not just PCs and Mobility Devices. As reported by Dan Rowinski at ReadWriteWeb, Forrester, a technology research firm, suggests that some of the most popular computing and networked devices of the future will be surfaces and flexible displays. In retail environments as well as in the home, counter top payment terminals could be accessed at any point of consumption. This ability for commonly used electronic devices to be networked will mean that the current generation of mobility devices such as cellular phones, pagers, and personal digital assistants will themselves become redundant.

To enable this super-networked world a new internet protocol will need to support large scale routing and addressing, impose a low bandwidth overhead and support auto configuration and mobility as a basic element. The nature of nomadic computing requires an internet protocol to have built in authentication and confidentiality. And we still need to communicate with the current generation of computers. IPv6 meets all these additional requirements and enables new consumer behaviour and expectations. This will completely remodel service delivery functions in industries where remote consumption is a key part.

Networked entertainment will be a growth sector for connectivity. Eventually every television set, or its replacement the flexible display, will become an Internet host. With digital HDTV, the differences between a computer and a television will be eliminated. IPTV services will allow broader video on demand, time-shifted programming, and live TV as well as ther multicasting opportunities in peer-to-peer gaming, corporate environments and distance learning. As has happened for the publishing industry with the current Internet, IP-based programme selection services should lead to a demand for a broader range of programme sources or content producers with consumers having a greater choice in where they source their programming – selecting individual programmes rather than choosing broadcasters. The demand is for a protocol which requires the minimum overhead to get the job done. Cost will be a major factor in the selection of an appropriate technology. Hence the need for IPv6.

In parallel to this will be IP-based device control. This consists of the control of everyday devices such as lighting equipment, heating and cooling equipment, motors, and other types of equipment which are currently controlled via analog switches. These, in aggregate, consume considerable electrical power. IP control will reduce the maintenance costs of remote equipment.

With IP-based interfaces available at every point in the home, there are implications for the increasing ubiquity of telemedicine. The capability to support remote monitoring and patient diagnostics in the home will potentially increase healthcare efficacy eliminating many unnecessary GP and hospital visits and reduce costs in the healthcare system through early identification and management of health issues. Telemedicine-based home healthcare for the elderly will help to alleviate the costs and resource implications of an ageing population on care facilities and retirement homes. In addition, devices such as Automated External Defibrillators in public places which are currently supported via telephony or service calls could be migrated to IP. The size of this market is enormous and requires solutions which are simple, robust, easy to use, and very low cost. The potential pay-back is that networked control of devices will result in cost savings which are extremely large. IPv6 will enable this transformation.

In banking, IPv6 could enable innovation and greater convenience in the small payments sector. With the emerging growth of near-field communications payments any device that is networked could act as a conduit for payments. Thus the physical payments terminal in its current form could disappear. The security and authentication features of IPv6 means that low value payments such as contactless value exchange for everything from popcorn vending machines to a self-service beer tap could be enabled to support NFC payments and no longer depend on a dedicated payment terminal. In retail environments, merchants could be released from physical points of sale. IP-addresses permanently assigned to every device will improve security tracing, auditability and realtime data collection for all kinds of banking and payment transactions.

Government backing

IPv6 is not a distant innovation and it is being ushered in quickly by Government mandates. According to Cisco,

“governments are being compelled both by legislation and the needs of citizens to deploy new services that promote public safety and economic growth while safeguarding the state and national infrastructure. To name a few, these services include electronic healthcare records and other citizen centric “e-services,” smart power grids, and next-generation communication networks. Unfortunately, IPv4 simply cannot support the growing number of devices needed to carry out these initiatives.”

The US Government has set September 30, 2012 as the date that all federal agencies must IPv6-enable public-facing web services with a second deadline, September 30, 2014, for internal client applications. In the communication “A Digital Agenda for Europe“, the European Commission says it wants all its citizens to have high-speed access by 2013 with internet speeds of 30 Mbps by 2020, with half European households subscribing to connections of 100Mbps or higher, and be able to access all public services online by 2015. To facilitate this it has set out a strategy to support deployment of IPv6. As Neelie Kroes, European Commission Vice-President for the Digital Agenda commented, “Fast Internet is digital oxygen”. The EU sees this digital agenda as critical to supporting the e-money Directive’s stated aim to “open the way for new market entrants to offer innovative electronic money solutions – such as mobile wallets – without a loss of protection of consumer funds“. The digital agenda will also fix a date for moving to a Single Market for online payments. The UK government is in the midst of deploying an IPv6-based public sector network on the heels of the European Commission initiative. More than 30% of all ISP in Europe and Middle East support IPv6.

What does it mean for me?

Many firms and service providers have not yet considered the implications of IPv6 for them and their customers, nor their approach or strategy for support of IPv6. IPv6 could revolutionise the basic business models and customer interfaces with which we are familiar. Being a first mover is not necessarily the key to corporate success. But being aware of trends and being ready to respond to the significant changes in the business paradigm that could be led by IPv6 we believe is key to success in the next decade. We suggest examining how your customers and existing markets could benefit or become more enabled by IPv6. And then reevaluate your product or service roadmap to meet the market opportunities.

IPv6 is not an obscure standard which will be quietly adopted. It has the potential to completely alter the way all business is conducted around the globe and will change customer behaviours and create new market opportunities for those who adapt.