What Is a Private IP Address and How Can It Benefit Your Business?

A digital lock.

Choosing networking details and IP addresses may not be the most glamorous part of running your small business, but it is important. And there are a lot of details to consider, especially with data breaches and privacy being such important topics for customers these days. If you’re not familiar with private IP addresses and private networks, you could be missing out on an important piece of your digital security puzzle.

Read on to learn all about private IPs and whether they’re right for your business.

What Is an IP Address?

An IP address is a unique number assigned to every device on the internet. This number acts as a physical mailing address—it allows devices to send and receive information to and from each other; it’s how devices find each other on the internet.

There are two basic types of IP addresses: static and dynamic. A static IP address is assigned to a single specific device and remains constant, and it’s typically used for servers and other frequently accessed devices. A dynamic IP address is assigned randomly when the device connects to the network, and it changes periodically. Dynamic IPs require less maintenance and configuration, so they’re typically the default choice for IP addresses unless there’s a specific need for a static IP.

When talking about static and dynamic IP addresses, we’re normally referring to public IP addresses—that is, other devices can find them on the internet and transmit information. There is another type of IP address, though, that’s hidden from outside access: a private IP address.

What Is a Private IP Address?

A private IP address, sometimes called a local IP address, is an IP address reserved for use on a private network. These devices can’t be accessed by devices outside their own network—they’re effectively invisible, except to each other.

Private IP addresses can be either static or dynamic, but in each case, the available addresses are limited to a pool set aside specifically for being private. These addresses are different from public IP addresses in that they don’t have to be unique—other devices can use the same address provided they aren’t on the same network. This is because devices on the private network can’t communicate with outside devices, which eliminates the risk of an address conflict.

What Are the Advantages and Disadvantages of Using a Private IP? Private IP addresses have advantages and disadvantages, but one of the main reasons to choose a private IP address over a public IP address is that it can greatly enhance security. Read more about the pros and cons of a private IP address below. 

  • Data protection and privacy. One of the biggest reasons to choose a private address space is privacy. Since devices on the private network aren’t connected to the outside internet, no data can enter or exit the network. That means sensitive data can only be accessed from those devices, making this setup perfect for small businesses that handle a lot of data.
  • Security. A private address space is generally more secure than a typical public network, for the same reason it is more private: lack of access. It’s hard for malware and viruses to make their way onto a network when it’s closed off from outside access.


  • Higher maintenance requirements. Private networks can be slightly more expensive to maintain than a typical public network, mostly because of non-standard configurations and additional setup for the network interface. The difference probably won’t be large for most applications, but it could add up over time, so it’s something to consider.
  • Lack of outside communication. The biggest advantage of a private network—it’s closed nature—is also its biggest disadvantage. Since devices on the network can’t communicate with the internet at large, several limitations can pop up. A small business with all its computers on a private network wouldn’t be able to access vendor and supplier websites or send emails outside the company, for example. Doing so would require a second, open network, which can further ramp up costs.

Is a Private IP Network Right for My Business?

The real question, of course, is why you should choose a private network over a public one for your small business. This is mainly a question of security versus convenience. Since a private address space is isolated from outside communication, information on the network is very secure, and it’s much harder for viruses and malware to enter the network and infect your business’s devices. So, if data privacy and security are vital to your business’s operations, you may want to choose a private IP network.

However, you’ll have to be prepared for the possible hassles of a closed network—this could mean needing additional equipment to connect to the public internet or possibly setting up a network-based IP VPN so you can still conduct standard business transactions without sacrificing security. Armed with this information, you should be able to decide if private IP addresses are right for your business. If powerful security is paramount, a private network can be an excellent tool.

And if you need high-speed internet for your small business, don’t forget to look at the Business Internet options from Frontier. Frontier offers a variety of solutions to meet the unique needs of small businesses like yours.