The Organisation for Economic and Cooperation and Development (OECD) has predicted that the Internet will run out of unique addresses in 2011.
The Internet is underpinned by a protocol called (not surprisingly) the Internet Protocol (IP) which is used to uniquely identify every [public] device that connects to the Internet. This protocol was devised in 1981 and is based on an addressing notation that can provides over four billion unique addresses. This may not seem like much now, but back in 1981 less than 500 computers were connected to the Internet...
Thankfully there is a solution known as IPv6, which extends the existing IP protocol from millions addresses to billions upon billions. However, although this problem and the fix have has been widely known for over ten years, too few agencies have fully adopted it to date, including big players such as BT.
The problem (as always) is cost; the major telecoms providers, together with other significant organisations on whose Internet services we have come to rely day-to-day, would need to space huge sums of money in order to migrate their existing services to fully support IPv6. Unfortunately the benefits that these business would see if they were to invest in IPv6 is difficult to quantity.
This isn't a happy story and there are no quick fixes - if nothing continues to happen the Internet will continue to grow but will start to slow down dramatically. The limited address space can be handled to some extent through the use of Network Address Translation (NAT), but this is not a long-term solution and increases complexity further.
At present over 85% of the available address space of IPv4 has been used, with over 200 million new addresses being consumed each year.