PEER-TO-PEER GROWS UP AND GETS A REAL JOB
by Jonathan Burton

Depending on one's view, the downloading of shared music files through services like Napster either popularized or demonized the technology that allows personal computers to be linked into one virtual machine over the Internet. Yet while the recording industry accuses the file-sharing music services of copyright infringement, other information-sensitive industries are praising the technology's ability to save time, money and stress.

The technology involves two slightly different concepts. One, called peer-to-peer computing, allows users to share files and collaborate by linking their computers over the Internet. The other, which is an element of distributed computing, allows idle computers to share their unused hard drive and disk space for complex tasks.

A variety of companies, including Intel, GlaxoSmithKline, Raytheon, the law firm Baker & McKenzie, the accounting firm Ernst & Young and First Union, are discovering that this technology can help them do business faster, better and cheaper.

The technology is appealing for any company that creates and shares intellectual property across vast distances, gives employees the leeway to make split-second decisions or both.

"People have recognized how enormous the potential is," said Patrick Gelsinger, the chief technology officer of Intel's architecture group. "We're starting to see some real substantive applications for the technology."

As a collaborative tool, peer-to-peer computing brings people together securely in familiar settings. Employees can gather for online meetings or for short-term projects, regardless of their location, while bypassing a bottleneck of corporate file servers. Freelance workers and contractors can join a group online without compromising a company's security. In business-to-business commerce, companies can use peer-to-peer computing to order from suppliers and serve customers. And Napster-like file-sharing allows quick downloads of software and essential documents.

As a computing tool, the technology can break down large tasks into smaller, parallel assignments and distribute them across dozens of interconnected desktops. These machines then contribute their unused hard drive and disk space to a particularly complicated job, like scientific research or data processing, resulting in drastic improvements in processing speed.

With the help of these round-the-clock resources, executives like Mr. Gelsinger are finding that the technology can accelerate the completion of both administrative projects and product development. For example, he said, an Intel chip designer in Oregon can operate a job on company desktops in Israel, where the workday has ended. "I could point to project after project where we've shaved multiple weeks off of chip-design schedules," Mr. Gelsinger said.

Maximizing the power of hundreds or thousands of sometimes idle computers makes such technology an understandably alluring prospect for companies.

"It's not quite ready for prime time, but there's no doubt that this is an evolution in computing technology," said Mark Eggleston, an emerging technologies analyst for Currid & Company, a consulting firm based in Houston. The Gartner Group, a technology research firm in Stamford, Conn., estimates that by 2003 nearly one in three corporations will use peer-to-peer technology to distribute files among employees.

"The way people get things done is by working together in small or large groups," said Rob Batchelder, Gartner's research director for Internet infrastructure. "With peer to peer, we move from personal to interpersonal computing."

Given the growing buzz around this technology, it is not surprising that several dozen enterprises have sprouted to sell companies the latest in peer-to-peer software. Much of the attention has so far focused on Groove Networks Inc in Beverly, Mass., which promises to connect workers in private, controlled and easily assembled groups. The venture is the brainchild of Ray Ozzie, who created Lotus Notes, the popular business communications tool.

The ability to exchange information in a secure, Web-based environment persuaded GlaxoSmithKline to buy Groove software for about 10 percent of its 107,000 employees worldwide. That is a significant commitment to a still-unproved model -- even one with Mr. Ozzie's imprint. But GlaxoSmithKline has close ties with research organizations and biotechnology companies for clinical studies and drug trials. These confidential exchanges include technical conversations and transfers of documents and images. The company's first Groove task, for instance, linked a GlaxoSmithKline scientist in Britain and a company lawyer in the United States with an outside intellectual property lawyer in London to expedite a patent filing.

The military industry is also interested in the technology's separate-but-secure nature. Raytheon and the Defense Advanced Research Projects Agency, the chief research and development arm of the Defense Department, are both testing Groove in pilot programs. Central servers and software applications are vulnerable, said Saul Fisher, the director of strategic initiatives for Raytheon, which is based in Beverly, Mass. Though peer-to-peer technology circumvents a network, documents in a shared space are encrypted, providing military contractors and government agencies a secure system that enables group interaction.

While Groove has made inroads among pharmaceutical companies and military contractors, other peer-to-peer software providers have signed deals with leading players in banking, insurance, accounting, law, consulting and energy services. Baker & McKenzie, the Dutch banking giant ABN Amro and the British unit of Ernst & Young are among more than 100 legal and financial companies enlisting NextPage, a Utah start- up that creates collaboration platforms and applications.

Lawyers in Baker & McKenzie's New York office, for example, could search for files in any of the firm's 61 offices worldwide, said Tom Ngo, NextPage's chief technology officer, and the retrieval process would be no more complicated than if the information were stored locally. Or a financial services company digesting an acquisition can use the technology as glue to bridge data networks instead of having to combine incompatible systems.

A desire to maintain business as usual while enhancing its fixed-income derivatives trading group drove First Union to become the first paying customer of DataSynapse, a New York venture that is initially focusing on Wall Street and energy concerns for its distributed computing product. Peter Lee, the chief executive of DataSynapse, said that the company's software tapped First Union's idle personal computer capacity to increase trading volume and conduct portfolio risk analysis continuously rather than at the end of a trading day.

In First Union's case, DataSynapse's software has reduced computing times for most assets to minutes from hours, Mr. Lee said. Faster response time can provide a sharper edge over the competition, which can translate into more profit.

Though it seems radical, and is certainly a hot topic, peer-to-peer computing is not trying to reinvent the wheel. The technology helps people uncover information quickly without leaving the confines of a safe communications network. For that matter, so does the telephone.

"Peer to peer offers to connect computers together the way people are connected," said Clay Shirkey, a partner for technology strategy at the Accelerator Group, an investment advisory firm in New York City. "Five years out, the bulk of enterprises will allow for ad hoc group creation; 10 years out, it will be fairly general."

Such comments are music to the ears of entrepreneurs like Mr. Ozzie of Groove. In an e-mail message from Tokyo, where he was traveling on business, Mr. Ozzie said, "You'll know that peer has made it when businesses start treating it as part of their overall business and computing infrastructure, and not just as an interesting, stand-alone application."