Merkato Enables Dynamic, Real-Time Bandwidth Marketplace

Merkato also helps to solve a longstanding problem in the bandwidth market. "The one thing the industry’s been looking for forever is how to differentiate their offerings," says Semret. "Instead of everyone pretending to offer the same thing, what [Merkato] allows is differentiation not only among the different sellers but even among one seller’s offerings." Merkato accomplishes this by clearly stating the quality of service provided by each seller. "Quality means different things to different people," says Semret. "There are providers who may not have the network with the lowest latency. On the open marketplace, that’ll naturally command a lower price. With this platform what they can do is discover the willingness to pay and the demand for these things. In a sense, it’s real-time market research."

While streaming is not well-suited to take advantage of these lower latency networks, other modes of data transfer can realize tremendous cost savings by using them. Email bursts and ftp sites are two examples of applications that don’t demand the same network resources as streaming but benefit greatly from the opportunity to purchase cheaper bandwidth. These applications also can take advantage of the cheaper rates associated with offpeak hours made possible by Merkato.

InvisibleHand is banking on the long-term potential of Merkato. "The bandwidth market’s huge; it’s estimated that by 2008 the IP bandwidth market will be a $200 billion a year industry," says Semret. "That’s a commodity market that rivals oil or anything else. So addressing and solving a fundamental pricing problem and becoming the primary platform is what we’re looking at as Merkato’s potential."

But it doesn’t end there. "Even beyond that, Merkato represents a new generation of market platforms," says Semret. "For the first time now you can have markets running 24 hours a day." And Merkato’s reach may even extend beyond the bandwidth market someday to facilitate a dynamic marketplace for "any time you have a sharable digital resource that’s infinitely divisible and that you can allocate in real time," says Semret, such as the sharing processing power and storage disk space.