Bandwidth Market Report
|February 2007||January 2007||December 2006||November 2006||October 2006||...|
|Welcome to Invisible Hand Networks' bandwidth market report. This report is published monthly, with current market pricing and activity at IHN's MerkatoTM Liquid Bandwidth Exchanges.|
News and Views
IP Transit Bandwidth Prices
The following sellers have agreed to be listed publicly as participants on the Metro New York Liquid Bandwidth Exchange available at Telehouse (25 Broadway, Manhattan), Equinix (165 Halsey, Newark) and Switch & Data (111 8th Ave, Manhattan). For information on other sellers, please contact us.
|1 Sellers: starting with Merkato 2.11, you will be able to update your own description through your Merkato agent. It will automatically appear in this report as well as in the Merkato portal as information for buyers. Look for this feature in the next few weeks.|
|2 Prices are Merkato prices expressed in $/Mbps/month. Merkato purchases are in real-time, in increments as short as 5 minutes. In the table, high, low and avg are for 24-hour periods in the calendar month. Last is the average over the last 24 hours of the calendar month.|
|3 IHN, as a market-maker, purchases bandwidth from all of the above sellers, and offers this BGP-blended product on the market, in real-time at a floor price which is a weighted average.|
Comparing 95th-percentile vs. Merkato prices
With 95th percentile billing, buyers are billed each month at a fixed price multiplied by the peak traffic level, regardless of how much is used the rest of the time. Thus with the same nominal price, the effective price is higher for buyers with burstier traffic patterns. With Merkato, buyers dynamically purchase bandwidth, in real-time, based on actual need, in 5-minute increments. Based on parameters set by the buyer, the purchased amount will closely follow the actual traffic (how closely depends on the buyer's configured "margin").
Thus, when comparing Merkato prices with 95th percentile, one must multiply the latter by the burstiness of the buyers' traffic, typically a factor of 2 to 3 for wholesale Internet traffic. For example, for a buyer with an average of 20Mbps and a 95th-percentile of 50Mbps, a Merkato price of $40/Mbps/month results in a total cost of about (20+5)x40 = $1,000/month, assuming the buyer's Merkato quantity margin is 5Mbps. At the same nominal price of 40$/Mbps/month, for the same total cost, with 95th-percentile pricing, the buyer would get only 1/2 as much bandwidth (the traffic average would have to be 10 and the 95th-percentile 25 for the total cost to be 25x40 = 1000).
In addition, with traditional contracts, the buyer is generally locked into a long-term contract, with a minimum commitment and a fixed price, with no ability to renegotiate for 12 or 24 months. When connected to a Merkato-based Liquid Bandwidth Exchange the buyer can purchase bandwidth from any available seller, with no commits, or burst premiums.
| For more information on IHN's products and services please contact your account executive or e-mail firstname.lastname@example.org.
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