The problem -- all the possible Net addresses will be used up in five years -- can be solved by upgrading the decades-old standards that govern how different devices communicate with each other. The upgrade, called Internet Protocol version 6, was developed a decade ago and mostly has been sitting on the shelf -- until now, that is. Anxious about how China and Asia are starting to upgrade their computer systems to take advantage of IPv6 capabilities, the Defense Dept. and the White House are trying to jump-start IPv6 use in the U.S. through billions of dollars in technology improvements. "This is going to be big," says former IRS Commissioner Charles Rossotti, a senior adviser to private-equity firm The Carlyle Group, which recently placed a $15 million bet on a startup working on the government's IPv6 transition. "Some significant sectors of the economy, notably the Defense Dept., are starting to move quickly."
Or at least as quickly as a bureaucratic behemoth can move. Even simple shifts in organizations as complex as the Defense Dept. are difficult. Although the government plans to spend tens of billions over the next 10 years to upgrade its computer and phone systems, it faces competition for that funding from the Iraq war. "Some of the operational folks are having to make some tough decisions, like supporting today's war fighter by buying a tank...or supporting the transition to IPv6," said one senior Defense official who asked not to be identified.
Still, there is urgency for moving toward the IPv6 model. Unless technologically advanced nations migrate to the new standard within four or five years, the world will exhaust its supply of IP addresses, which are assigned to all computers and other devices that exchange data over the Net. But once the hardware and software upgrades to IPv6 are complete, they will open up so much territory in cyberspace that a unique address can be assigned to every digital product in the world -- and every one produced for the next several centuries. In theory, that means that everything from advanced weapon systems to home appliances will be able to configure its own Internet connections, update its software, and resist attacks from hackers.FOOT-DRAGGING?Companies and countries that make this transition quickly could reap both economic and military advantages. Yet in the U.S., companies that produce network equipment have barely started to promote IPv6 products because there's little demand in the general market. And users such as Internet service providers aren't clamoring for change, mainly because the upgrade to IPv6 will require them to spend mountains of cash to tweak every piece of hardware and software and retrain their technical staff.
That's where the buying power of the U.S. government comes in. Federal purchasing officials have already said they plan to require all civilian and defense agencies to upgrade their key network equipment -- routers, computer servers, switches, and such -- to IPv6 within 20 months. By next spring, the General Services Administration (GSA) plans to award two of the largest government contracts ever, totaling $125 billion, to overhaul the government's phone systems and IT infrastructure. The GSA also designates a record-breaking $25 billion in contracts for small or minority businesses. "These are big numbers even when you look across the federal government," says James A. Williams, who runs GSA's Federal Acquisition Service.
The military likes the new protocol for many reasons. Under IPv6, members of a battalion deployed overseas will be online in a matter of hours, not weeks. Also, every electronic device can tap into the Internet directly, without having to go through a server. A soldier's gear, for example, could be fitted with sensors that transmit data to commanders. "We'll be able to see what a soldier sees through the scope of his rifle. We'll be able to check his vitals," says Kris Strance, a senior IT analyst at Defense.CHINA CALLINGThe U.S. Military feels pressure to move quickly on IPv6 primarily because of the advances by the Chinese government. China may be one of America's most important trading partners, but it also poses competitive threats. U.S. military officials who asked not to be named say the majority of hacker attempts on the Defense Dept.'s Global Information Grid originate in China. Defense officials say the U.S. can't afford to fall further behind. "We're going to give a technological advantage to countries that aren't quite friendly to us and that are developing nuclear capabilities," says another Defense official who asked not to be named.
Military concerns are driving IPv6 adoption in the U.S. today, but government officials hope the wave of federal purchases kick-starts production of IPv6-compatible technology for the general public. Some of the first IPv6 windfalls will go to ventures that help government agencies through the transition, such as Command Information in Herndon, Va. The beneficiary of Carlyle's $15 million investment, the company landed a piece of a $4 billion Army IT contract. It expects to generate $50 million in revenue this year and plans to hire dozens of new employee by the end of December.
Down the road, IT hardware and services giants such as Cisco Systems (CSCO
), Hewlett-Packard (HPQ
), and Verizon (VZ
) could reap the biggest rewards. HP, which does $2 billion in federal work each year, is stepping up production of IPv6-compatible printers and servers, and hopes to upgrade its entire product line over the next two years. "Without government requirements, I'm not sure there would be the will to make [that] happen," says Steve Henderson of HP's federal contracting division. Cisco's full product line is now IPv6 compatible, says Gerald T. Charles Jr., a director in the company's Internet Business Solutions Group. "You're going to get to a point where you need to be IPv6-capable, or you're going to be left behind." By Dawn Kopecki