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A realm can contain another realm. It does not change anything for schedulers: they are only responsible for hosts of their realm not the ones of the sub realms. The realm tree is useful for satellites like reactionners or brokers: they can get jobs from the schedulers of their realm, but also from schedulers of sub realms. Pollers can also get jobs from sub realms, but it's less useful so it's disabled by default. Warning: having more than one broker in a scheduler is not a good idea. The jobs for brokers can be taken by only one broker. For the Arbiter it does not change a thing: there is still only one Arbiter and one configuration whatever realms you have.
Example of realm usage
Let's take a look at two distributed environnements. In the first case the administrator wants totally distinct daemons. In the second one he just wants the schedulers/pollers to be distincts, but still have one place to send notifications (reactionners) and one place for database export (broker).
Distincts realms :
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More common usage, the global realm with reactionner/broker, and sub realms with schedulers/pollers :
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Satellites can be used for their realm or sub realms too. It's just a parameter in the configuration of the element.