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Company Backgrounder

 Core Business   Invisible Hand Networks, Inc. (www.invisiblehand.net) helps telecommunications service providers boost profitability by enabling them to create new revenue-generating IP services that maximize existing infrastructure investments and underutilized bandwidth capacity.
 Core Software  

Merkato – a software platform – lets global and regional carriers, exchanges and hosting facilities dynamically price, sell and allocate IP flow for more efficient and cost-effective management of capacity.

Merkato enables bandwidth providers to:

  • Respond to variable demand
  • Increase traffic flow during off-peak hours
  • Maximize network efficiency
Customer Challenges  

With more than $1.5 trillion borrowed and over $630 billion in bonds, invested in telecommunications infrastructure, there is immense financial pressure on service providers to demonstrate a tangible ROI. These challenges are exacerbated by:

  • Falling bandwidth prices, even as customers demand more freedom with short-term commitments to capacity purchases.
  • The growing use of Web-based applications, which require the ability to respond immediately to sudden spikes in demand.
Creating a Dynamic Marketplace  

Merkato automates all aspects of buying, selling and allocating bandwidth, in a real-time and dynamic marketplace.

Merkato enables spot buying, giving companies new flexibility to buy and sell capacity within minutes. It also offers a reservation market that allows companies to buy and sell bandwidth at a guaranteed time, rate and quantity.

The software leverages patented algorithms to automate price discovery and negotiation, giving both buyers and sellers access to market-driven prices.

Additional reporting and analysis tools provide feedback on traffic and usage patterns providing varied and sophisticated buying and selling strategies, so buyers and sellers can continue to maximize their results going forward.

Established Customers  

Merkato is currently used by buyers and sellers of IP transit bandwidth through markets operated by Invisible Hand Services. The service, first deployed in beta in August 2000, was officially launched in May 2001, with an initial site at the Equinix facility in Newark, NJ. In 2002, the service was extended to Telehouse America's facility at 25 Broadway, in New York City.

The service has been rapidly adopted by buyers and sellers of IP bandwidth, posting an annual growth rate of over 200%. Gaming, streaming audio and video, software distribution and next-generation media distribution companies use the service to buy bandwidth on demand at fair market prices. Network Service Providers find in Merkato a means of attracting new traffic and generating additional revenues by dramatically boosting utilization of existing capacity.

Company Background  

InvisibleHand was founded in 1998, based on the research of founder Nemo Semret who identified how market-based algorithms could be used to decentralize network control and management as part of his doctoral thesis at Columbia University.

Invisible Hand Networks has raised $12 million in funding from Polaris Venture Partners, Boston University’s Community Technology Fund and individual investors. The company is headquartered in New York City.


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