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What is Merkato?

What is Merkato?

Merkato is an open software platform that enables real-time, market-based pricing and allocation of IP bandwidth.

Merkato enables sellers of IP bandwidth (IP network service providers) to:
  • Drive revenue producing traffic to fill off-peak capacity, thus maximizing the utilization of existing capacity
  • Attract price-elastic buyers across wider market segments than any other approach
  • Roll out new IP services based on clear market demand and optimal price discovery
and buyers (such as content providers, enterprises, ISPs) to:
  • Buy bandwidth flexibly, on-demand, in real-time and at fair market prices
  • Obtain better bandwidth guarantees and quality of service at a price they are willing to pay

Through patented technology, Merkato enables real-time spot and reservation marketplaces, automates price discovery and negotiation, and provides sophisticated buying and selling strategies executed via automated intelligent agents. Merkato also completes transactions within minutes and allocates the bandwidth instantly, by interfacing in real-time with network elements such as routers and switches.

Merkato provides an alternative to traditional methods.  Traditional circuit-based pricing methods dedicate a fixed portion of each “pipe” or circuit to each customer.  The majority of the time customers do not use the full amount of their fixed portion and thus, capacity goes unused.  In some cases, service providers attempt to better utilize capacity through over-subscription of customers.  However, this often results in service level degradation. In contrast, Merkato enables service providers to dynamically price and sell capacity and to make full use of the network infrastructure.  Obvious benefits are improved efficiency, reduced costs and opportunities for additional revenue and new IP service offerings. With Merkato, service providers can increase revenue by 45% and see a five-fold improvement in gross margins on bandwidth.

Merkato leverages game theory, agent technology and patented market mechanisms to automate price discovery and negotiation to compute optimal market prices for current market conditions.  Game theory makes it possible to design protocols and algorithms that recognize that intelligence and decision making are decentralized.  This approach enables fully automated real-time markets that result in optimally efficient utilization of network resources.


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