IP Address Management FAQ | Why IPAM is Essential for Service Providers

This article provides a summary of everything you need to know about IP address management.

Updated on July 4, 2023

What is IPAM?

Internet Protocol address management (IPAM) refers to a method of tracking and adjusting the information associated with a network's Internet Protocol (IP) address space. IPAM simplifies and automates the administration of many tasks involved in IP space management, including configuring DNS (Domain Name System) and DHCP (Dynamic Host Configuration Protocol) settings.

Key IPAM capabilities include automating workflow processes, highlighting shortages and potential issues with IP address space inventory, and enabling tiered administration.

An IPAM solution lets administrators keep up-to-date records of IP assignments and available addresses. Records might include:

  • Free/assigned IP address space
  • Size and users of subnets currently in use
  • Status for each IP address
  • Hostname associated with each IP address
  • Hardware associated with each IP address

Why is IPAM necessary?

There are three main reasons why IPAM software is necessary for communication service providers:

  1. Resource Management: It's vital to have a system for organizing IP address space because there are only a finite number of IP resources available — and these cost money. Without an IPAM system to track and manage IP addresses, issues like IP conflicts can cause serious problems for users. Consider that every network device connected to the Internet or corporate intranet requires at least one IP address. These devices also need access to a DNS server to resolve domain names. If there is more than one device with the same IP address, network routers won't know where to pass data packets, which can disrupt operations. An IPAM system can help by tracking IP addresses and automating tasks to keep workflow running.
  2. Growth Strategy: You could run out of IP addresses if you cannot keep track of your address space accurately or easily. This would prevent you from easily adding new subscribers and connections and limit your ability to grow your network services and business.
  3. IPv6 and Dual-stack: IPAM has become even more important since the introduction of the new Internet Protocol, IPv6. More details are available below.

How does IPv6 affect IPAM?

There are three main ways that IPv6 has increased the need for service providers to adopt an IPAM solution:

Address format and size

Because IPv6 uses a 128-bit address instead of IPv4's 32-bit address scheme, it provides an immense number of addresses that far surpasses the 4.3 billion addresses available in IPv4. This ensures a virtually inexhaustible supply of addresses to accommodate the growing number of devices and network connections in the future. Because of this added complexity, there is no chance of an administrator remembering an IPv4 address – an IPAM tool is needed to keep track of IPv6 resources.


These two protocols will coexist for some time, and providers need a solution that can organize address space when implementing these protocols side-by-side (in "dual-stack mode"). An IPAM solution allows you to catalog your IPv4 network resources and IPv6 address space.

Routing strategy

While it may have been previously possible to manage IPv4 address space using spreadsheets or manual systems, IPv6 is so large and complex that it is unworkable. You can allocate and track much larger blocks of addresses in IPv6 than you ever could in IPv4. Transitioning to IPv6, therefore, allows you to redesign your entire networking infrastructure. Use IPAM to monitor your IPv6 deployment and re-adjust your strategy as required.

What costs are associated with IPAM?

While purchasing an IPAM solution may require capital expenditure, it's also important to consider the considerable costs and business impacts associated with poor and/or ineffective IP address management.

What are the risks of poor IP management?

The risks associated with inefficiently managed IP networks include network downtime, lost revenues, dissatisfied customers, and network security and access problems. For example:

  • Service cancellations by existing customers (churn) or new customers, or excessive technical support time, caused by the inability to provision the proper IP addresses for Internet access and communications. This is especially pertinent to enterprise and B2B services in addition to the consumer segment in fixed broadband or mobile services.
  • Delays in introducing new services after being denied address space by a Regional Internet Registry (RIR) due to inadequate utilization reports and growth plans and lack of cost-effective means to re-allocate existing IP addresses.
  • Access problems for banking or e-commerce customers because of unavailability or duplication of IP addresses.
  • Inability to diagnose a network outage or provide access privileges resulting from the lack of IPAM diagnostics tools.
  • Delays in consolidating business units (in mergers, acquisitions, or reorganizations) due to overlapping IP space.
  • Disruptions on manufacturing assembly lines caused by misconfigured IP addresses that interrupt material flows.
  • Overspending on capacity, given that IPv4 addresses are depleted and their price on the resale market has more than doubled in the past year and continues to increase.

What should I look for in an IP address management solution?

Everyone will have a different set of priorities, but a few key aspects to look out for are:

  • Reporting. Especially report generation tailored to fit RIRs.
  • IPv6 support. No matter where you are in the transition, future-proofing is key.
  • Performance. Capability to handle large IP pools or manage busy operations.
  • DHCP and DNS integration. Compatibility with a system already in place.
  • Historical data. Critical when operating in regions with lawful intercept requirements.

Can I still acquire new IPv4 addresses?

The pool of available IPv4 resources is nearly exhausted, and RIRs can no longer satisfy all requests for additional IPv4 addresses. RIRs have already implemented stricter criteria, which means that you will need to provide strong justification for any IPv4 requests and still should expect to receive smaller allocations than in the past.

Another method of acquiring additional IP addresses is to purchase them from another entity not utilizing their resources. Some RIRs, like ARIN, provide services that facilitate the transfer of IPv4 resources. Bear in mind that this can be expensive. Visit the website for your RIR for further information:

Consider maximizing your existing address pool first with an IPAM solution. It will reduce the need for additional addresses and help with your request to the RIR.

Can I use a spreadsheet to manage a small pool of IP addresses?

No matter what size your address pool is, using a spreadsheet to perform address management duties is not a good idea. This method is time-consuming to maintain and increasingly prone to human error, which can result in erroneous configurations in your network. IPv6 features like stateless address auto configuration (SLAAC) also introduce additional complexities that can be counter-productive to handle in a spreadsheet.

What are some new IPAM developments and features to be aware of?

Advanced features

Modern IPAM solutions have many advanced features that can help operators streamline IP address management, improve network efficiency, reduce operational costs, enhance customer satisfaction, and prepare for future growth and technology transitions. The following features allow operators to take a proactive approach to maintaining a robust and scalable network infrastructure:

  • IP address discovery and reconciliation: Ensure accurate inventory and reduce IP conflicts by automatically scanning and identifying IP addresses in the network, along with logical resources, including VRF (virtual routing and forwarding), VPN (virtual private network) tunnels, floating, public, and private IPs, and native v4 and v6.
  • Subnet optimization: Minimize waste and fragmentation and facilitate network scalability by efficiently allocating and utilizing IP address subnets.
  • Configurable policies: Organize IP address pools based on region and service types and streamline automatic IP address allocation.
  • IP request workflows: Ensure proper governance, reduce errors, and accelerate service delivery by streamlining the process of requesting and provisioning IP addresses, and increase efficiency between teams for IP planning, networking engineering, and network operations.
  • IP usage analytics: Inform IP management decisions with insights into IP address utilization patterns, enabling the identification of underutilized or overutilized resources.
  • IP address utilization reporting: Improve resource allocation and reduce operational costs by generating comprehensive reports on IP address status, including free/assigned addresses, subnet utilization, and device associations, to augment capacity planning and regulatory reporting.
  • Integration with network management systems and cloud orchestrators: Centralize management and automation and improve network reliability with seamless integration with DNS, DHCP, and other network management tools, as well as employing OS virtualization with platforms like Red Hat OpenShift, using open APIs to allocate IP resources.

Virtualization and IPAM

As seemingly everything "goes to the cloud," IPAM solutions have also adapted to support cloud-based deployments. Cloud-based IPAM solutions can offer dynamic IP address assignment in virtualized environments, integration with cloud management platforms, and support for multi-cloud environments, delivering specific benefits for operators, including:

  • Improved agility and scalability: Quickly adapt to changing network demands, scale services efficiently, and reduce time-to-market for new offerings.
  • Enhanced resource utilization: Optimize IP resource allocation, reduce wastage, and streamline address space management.
  • Streamlined operations: Centralize IP address management, simplify operations, and reduce administrative overhead.
  • Increased network resilience: Minimize IP conflicts, enable automated recovery mechanisms, and enhance service availability.
  • Cost savings: Achieve operational efficiency and optimize address space management, leading to cost savings.
  • Future-readiness: Adapt and scale IP address management practices for evolving cloud technologies and infrastructure requirements.

Today's cloud-based IPAM solutions can help operators effectively manage and optimize their IP resources, improve operational efficiency, enhance network resilience, and ensure a smooth transition into cloud-based architectures.

Automation and integration

When IPAM solutions are integrated with DNS and DHCP servers – commonly referred to as DDI (DNS, DHCP, and IP address management) – they streamline network management, improve operational efficiency, enhance network reliability, and provide a solid foundation for secure and scalable network infrastructure, offering the following advantages:

  • Centralized management: Reduce manual errors and ensure cross-network consistency with integration between IPAM, DNS, and DHCP servers.
  • Efficient IP address assignment: Improve resource utilization and reduce administrative effort with automated IP address assignment through DHCP.
  • Dynamic DNS updates: Eliminate manual record management through integration with DNS servers, which allows automatic updates of DNS records when IP addresses change.
  • IP-hostname synchronization: Simplify troubleshooting and enhance network reliability with accurate synchronization between IP addresses and hostnames.
  • Alignment of IPAM, DNS, and DHCP: Improve network efficiency by eliminating discrepancies and conflicts between IP address assignments, DNS resolutions, and lease information.
  • Enhanced security and compliance: Facilitate security management, access controls, and compliance adherence through accurate IP and DNS record keeping.
  • Automation and scalability: Support network expansion by automating repetitive tasks, improving operational efficiency, and allowing for seamless scalability.
  • Improved network performance: Enhance network performance by reducing DNS issues, preventing IP conflicts, and enabling efficient IP address allocation.

How can Incognito help?

If you're looking to cut costs and optimize resources, Incognito's carrier-grade Address Commander solution offers network-wide visibility, simplified IP request fulfillment, and comprehensive reporting to centralize, automate, and streamline the administration of complex IP environments. With this solution, you'll enjoy the following key advantages:

  • Efficient IP utilization: Eliminate silos by managing and optimizing IP address usage across multiple networks.
  • Flexible IP planning: Improve resource allocation efficiency by aligning IP allocation with specific business needs.
  • IPv6 readiness: Facilitate transition to IPv6 with native support for IPv4 and IPv6 address planning.
  • Automated workflows: Reduce manual effort and speed up provisioning by streamlining IP requests with automated workflows between network engineering, operations, and IP planning teams, speeding up service delivery by 90 percent.
  • Regulatory reporting: Meet regulatory requirements by generating extensive reports, including RIR (Regional Internet Registry) reporting.
  • Network visibility and reconciliation: Ensure accurate resource management by reconciling the actual network with the IP plan using Network Discovery Probe (NDP), along with pre-integration to Incognito's DHCP server in Broadband Command Center.

Additionally, Incognito's DDI solution offers the following capabilities:

  • Centralized and automated IP resource allocation.
  • MAC-less provisioning for device deployments.
  • Scalability for over one million IP addresses per DHCP server.
  • Easy integration with existing systems and databases.
  • Dual-stack DHCP for IPv4 and IPv6 support.
  • Pre-integration of Incognito's DHCP server and IPAM solution.
  • Automated scope deployment of DHCP (SDM).

To find out how Incognito can help you improve operational efficiency, optimize IP resource allocation, and enable smooth IP address management across multi-vendor, multi-access environments, please contact us for a consultation.

Incognito Address Commander

Learn more about Incognito's Address Commander product and how it can help you simplify your IP address management processes today.

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