There are two ways to purchase bandwidth The amount of data transmitted or received per unit of time. When we refer to acquiring or selling bandwidth, we mean the amount of information that can be sent over a connection at one time, at the allowed speed, without packet loss or excessive delay. Bandwidth is measured in bits-per-second. in a Merkato system.
The first method is called the Reservation market The Merkato market mechanism by which a specified quantity of bandwidth, for a specific duration, is sold for a firm price specified by the seller and agreed to by the buyer. This is an automated process based on a rate sheet that the seller establishes in advance. and uses a reservation agent The program that interacts with the rest of Merkato on behalf of buyers and sellers. Buyers can acquire bandwidth by configuring their agents to offer the price they are willing to pay for a range of available quantity, or use their agent to request a quote for a fixed-price bandwidth reservation. Sellers configure their agents with a quantity of bandwidth for sale and a minimum price they are willing to accept for that quantity.. The second method is called the Spot market The Merkato mechanism by which bandwidth is traded, in a progressive second price auction. An optimal fair market price The price for something that buyers and sellers agree on. Merkato establishes a market price for bandwidth during each spot market auction round. There is a fixed amount for sale, so as demand increases, prices rise. The market price is reached when the cumulative demand of all the buyers is exactly equal to the amount of bandwidth being offered by the seller. is established and bandwidth is allocated to buyers, based on their bids relative to other buyers. and uses a spot agent.
Reservations eliminate uncertainty. You know how much bandwidth you will be receiving, for what duration, and for what price.
In the spot market, distribution of bandwidth is based on ranking bidders by price offered. It is possible that for some period of time you will be unable to obtain the full amount of bandwidth you desire because you are out-bid by other buyers.
The spot market provides true bandwidth-on-demand. The changes you make to your agent bidding profile take effect immediately. You can even stop bidding entirely for a period.
Reservations may be cancelled, but the seller may have a cancellation fee.
The seller sets the reservation market prices. Spot market prices are determined by a unique progressive second price bidding process. You do not necessarily pay what you offer; you pay the unit price of the lowest bidder to be awarded bandwidth. This is the true “market price” for the bandwidth offered by the seller, as established by the community of active buyers.
You need not choose one or the other purchasing option exclusively. Any bandwidth you purchase on the spot market will be added to bandwidth you purchase on the reservation market. Many buyers use the reservation market to “lock in” their minimum required bandwidth, and then use the spot market to purchase additional bandwidth as required.
Depending on how your administrator has set up your Merkato system, you may have separate login usernames for each type of agent or they may share a common username and password. (If different agents share the same username, you have to obtain them from different “garages.”)