Technology: Peer-to-Peer

By Mathew Schwartz  |  Posted 03-18-2002

Technology: Peer-to-Peer

Peer-to-Peer Fact Sheet
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Remember Pointcast? Launched in February 1996, its so-called push technology was designed to "push" content such as news and advertisements through users' Internet connections. Trouble was, it gobbled up so much local network bandwidth that corporations nationwide banned its use. The history of business computing is littered with such "grassroots technologies." Some, like client/server computing and desktop PCs, went on to become the dominant corporate IT architecture; others, like Napster, became part of the fossil record, a technology cart with no business-purpose horse.

Napster also has the dubious distinction of being an early version of peer-to-peer technology, software that commonly allows two or more computers to communicate directly without having to depend on intermediate servers. But another peer-to-peer offering, instant messaging, may not only provide the opportunity to offer a valued service to end-users at minimal cost, but may demand so little upfront analysis that many IT executives won't even have to calculate its return on investment before starting pilot programs.

Like many grassroots technologies, some industries are more receptive to instant messaging than others. One arena where instant messaging seems to have found a receptive audience is in creative services arenas such as advertising and entertainment. "We're just starting to look at peer- to-peer technologies," says Ed Cannon, executive vice president and CIO of Grey Global Group Inc., the New York-based holding company that includes advertising giant Grey Worldwide. "We have about 4,000 users, and I would imagine there's probably anywhere from 5 percent to 10 percent of our population using IM at this point."

But the company has yet to roll out its own sanctioned instant messaging service. "Our teams are dispersed at different offices around the country, and in some cases at different offices around the world," says Cannon. "One thing we're concerned about with IM is that viruses can come in that way. But we also have the philosophy of letting some things grow out in the field and then seeing how we can make it part of our overall culture."

In fact, says Cannon, he'd rather let IM grow on its own for a while. "My personal opinion is, when you're in a professional services organization, the ability to track down information and to interact contributes to the overall productivity of a professional. The easier we make that interaction, the better professionals we have overall," he maintains. "If you're giving employees technologies that give them a better professional and personal life, it's a better result for the company. People are just balancing work and life, and we look at the technology as a way to help them achieve that balance."

The Studio System

The Studio System

Venerable entertainment studio Warner Bros., a unit of AOL Time Warner Inc. based in Burbank, is another creative environment where IM has been allowed to flourish. "What we found," says Anthony Lloyd, Warner Bros. vice president of computer operations, "was that there were many people who had some sort of a chat function to communicate with friends and family." But like Grey Global, there was no gate-keeping mentality in IT to enforce strict software usage standards. "We're an entertainment company," says Lloyd. Employees are allowed substantial leeway, "so long as you're not doing something illegal," he says. However, Lloyd does admit the company is developing acceptable-use policies to control its liability for inappropriate uses of instant messaging.

Through its shift from Microsoft Outlook to AOL Time Warner's America Online and Netscape messaging software, the entertainment studio recently provided instant messaging to its 10,000 users. But because IM was built into the software, the company didn't feel the need to calculate any potential return on investment for IM itself.

Yet despite the popularity of instant messaging for personal uses, Lloyd reports that few employees are actually using IM in their daily work. "It's not looked at as a critical path for how we do business," says Lloyd. "The culture here at the studio is that IM is more of a novelty, because you don't have history, versus an e-mail chain."

The tactic at less free-wheeling operations has typically been more cautious. St. Agnes Healthcare, a Baltimore-based hospital, now has 800 users running an instant messaging software application created by WiredRed Corp. called e/pop. "Even though we have a clinical system in place that tells us there's a bed available, if someone comes into the ER, it's easy to send an e/pop and ask if there's a bed free," says Jonathan Schoemann, technical support engineer at St. Agnes. "This way, instead of doing 15 phone calls to see who's got a wheelchair, you just do one IM, and they say, 'We've got it, we'll send it down,'" says Schoemann.

Because of its low cost, St. Agnes' IT department didn't bother to compute the service's ROI ahead of time. "For the big players in the game, such as Microsoft Corp. and Novell Inc., [whose systems] cost an extreme amount of money to deploy," says St. Agnes IT director Larry Lawson, "we would have probably wanted to justify [the expenditure]. But with the cost of WiredRed's product, it's not something that's going to break your budget right from the get-go. It's something that most healthcare providers can afford, and you do not have to pay a consultant to come in and do an ROI [estimate] for you."

That's why St. Agnes' IT professionals took it on faith that the service was worth providing. "It's hard to quantify exactly what you're getting," says Lawson, "but you're getting an increase in productivity from everyone who uses this. If they don't have to go through the phone book, they can communicate more quickly. They don't have to go around the hospital looking for wheelchairs; they can send an IM and get an immediate response." Lawson is emphatic about the payback. "Time is money, time is production, and with the shortage of nurses that everyone is having right now, it plays a big part."

That ease of communication is the main reason IM is becoming so widespread in U.S. businesses. A recent report from Jupiter Media Metrix Inc. claims the number of instant messaging users in the workplace has risen by 34 percent over the past year, to 13.4 million, just under 10 percent of the U.S. workforce. But David Ferris, founder and president of Ferris Research in San Francisco, believes that IM use at businesses with 500 or more employees hasn't exploded yet. "We think it's quite small—between five million and 10 million corporate users," he says. "We keep expecting it quickly to expand, and it hasn't. But by 2007, we'd expect on the order of 200 million corporate users worldwide."

Ease of Use

Ease of Use

Other potential fertile ground for peer-to-peer services such as instant messaging may include technology-driven companies. "We're actually just starting to get into peer-to-peer for some internal applications with Microsoft XP, using it as another tool to have people interact with our help desk so people can log on with instant messages and other features," says Michael Vaughan, vice president of engineering for Norwood, Mass.-based Corporate Software, whose applications allow users to track software licenses. "A lot of folks have been either personally exposed to it through home use, or more than likely their kids are using it."

But like Warner Bros., Corporate Software didn't compute ahead of time any potential return because IM services were included in software they were already rolling out. "Unless it's innocuous, or just part of the infrastructure," says Vaughan, "there's an ROI done with most of the major projects." Instant messaging fell into the former categories. "It's just in a pilot state, seeing if the business uses it, or will they still pick the phone up?" says Vaughan. However, Vaughan believes that IM will catch on. "We're early adopters," he proclaims. "There's a group [of users] here that really tries to push" new technology.

Other industries are not quite so accepting. "We're not using any instant messaging per se," says Dat Bui, first vice president and technology architecture manager in the home loan and insurance services division of the 40,000-employee Washington Mutual Inc., the nation's largest savings institution. "We don't even have teleconferencing," he admits. "The banking industry is fairly behind in that kind of workgroup automation process."

The same is true for AnnTaylor Stores Corp., the New York City-based clothing manufacturer. "I don't know of any widespread use of [instant messaging] inside the company," says Ron Gayda, vice president of Internet technology for AnnTaylor.com. "We would have to identify an application that would require that kind of technology to chase it down."

Says Grey's Cannon: "I can tell you, we do have some concerns about IM for network overhead and viruses, and we're taking a hard look at how we're going to bring this into the whole organization and institutionalize it."

"I think one of the concerns," says Warner Bros.' Lloyd, "is that it's not considered to be as reliable, because you don't have the traceability" of e-mail services. Once an instant message recipient shuts the receiving PC down, the message is typically lost forever.

St. Agnes' Lawson is concerned about privacy issues. "We have to be extra wary in healthcare," he says, "because you have patient records, which are probably the most critical parts of the patient-care chain." Washington Mutual's Bui agrees. "In our business, we have to protect the information not just from the consumer standpoint, but also from the financial standpoint."

And there are ramifications for IT departments as well. "Should IT organizations be embracing peer-to-peer systems? I think so, because they scale much more organically," says Dr. David P. Reed, former vice president and chief scientist of Lotus Development Corp. and now an independent researcher and adviser. "But one problem is that managing peer-to-peer systems can be more complex, because IT loses control." Like other grassroots technologies, peer-to-peer allows users to implement their own applications without having to go to IT for approval, because users believe they can perform their work better.

One example of this is Warner Bros.' use of peer file-sharing software from Xerox Corp. that allows users to access directly their catalogs of scripts and call sheets, which organize movie and television production work each day. Previously, the company had to print copies of call sheets for dozens of people, mailing or messengering them to recipients. Movie and television scripts had to be distributed manually as well, often with substantial delivery costs. With its new file-sharing system in place, however, Warner's Lloyd reports first-year savings of $250,000 in printing costs for call sheets, and more than $300,000 for reduced script distribution costs.

Efficiencies of Scale

Efficiencies of Scale

Some see the ability to include the members of an organization's "extended enterprise"—people and workgroups outside the corporate firewall—as central to the value of peer-to-peer. "The ability to work seamlessly, efficiently and effectively with outside players is becoming a critical success factor regardless of industry, company size or geographic location," says Ray Ozzie, creator of Lotus Notes and currently chairman and CEO of Groove Networks Inc., a Beverly, Mass.-based maker of peer-to-peer collaboration software. "Winning enterprises won't approach this as a debate between centralized versus decentralized technologies, but instead will find the best and most effective means of integrating both to support the critical needs of the business."

Yet despite such vision, the peer-to-peer market today is small. Industry analysts Frost & Sullivan place the entire market at $43.7 million in 2001, which includes instant messaging, file sharing and peer collaboration software. Gartner Inc.'s Robert Batchelder is a little more generous. "If it's $150 million or $200 million, I'd be surprised. But it's going to grow dramatically. By 2005, the whole notion of P2P stuff will be $1 billion," he claimed, though some of that will be consumer technologies such as music sharing. Frost & Sullivan predicts that by 2007, 6.2 million enterprise users will have access to peer-to-peer networks, and that revenues will grow to exceed $4.96 billion.

The real opportunity for a clear return on investment with instant messaging and file sharing will come when these services work together more seamlessly, such as with nascent efforts like Groove Networks' Groove client and servers. Ultimately, some believe that services such as instant messaging and file sharing will merge into other applications. "In this whole space, we're fairly early in the curve," says Corporate Software's Vaughan. "I see all this stuff tying together eventually. I see a merging of voice and traditional e-mail and instant messaging all into one."

But today, because of its simplicity, instant messaging and other peer-to-peer technologies can solve only very specific business problems. "It's a great technology," says Walid Mougayar, founder of Toronto-based PeerIntelligence.com, a knowledge hub that chronicles the impact of peer-to-peer technologies, "but it's not going to take the world by storm, and we should have the right expectations of what it can do and cannot do." What it can't do today is regularly justify its return on investment. But that doesn't seem to be stopping many CIOs from looking to roll out useful services to end-users.


MATHEW SCHWARTZ is a Boston-based freelance writer who covers technology, management, Wall Street and security. Comments on this story can be sent to editors@cioinsight.com.

P2P Topologies

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P2P Topologies: Mixed Bag

p2p Topologies

Peer architectures shatter the static computing roles used in approaches such as client/server. Devices in peer networks are called nodes. Some nodes provide services, and other nodes use those services. But the rules for which nodes perform which services vary depending on which scheme is being used.

Think of the various tasks workers in a company must perform as "services." How each company decides what tasks are performed by which employee varies widely, with some people asked to perform only one or two tasks while others are required to do many. That's the way P2P works: Common functions in a peer network include registration and search (keeping track of users, devices and services), storing files, coordinating connections and communications, asking other nodes to perform certain tasks, failover, load-balancing, and relaying data such as names, links and content. Some peer schemes let all nodes perform all tasks, while others centralize some tasks to specific nodes.

Centralized schemes look a lot like client/server systems. In a hierarchical approach, tasks ripple up and down a chain. Ring topologies balance tasks across multiple nodes. And decentralized schemes let all peers do all things.

Life gets really interesting when peer schemes blend these approaches. For example, a peer system may look hierarchical, but what appears to be a single server may actually be a distributed network of nodes dynamically banding together to act like a "virtual" server. The best mentality for understanding peer networks, then, is that all bets are off in terms of which nodes perform which tasks. The challenge for CIOs is to choose schemes that provide the best match for the kinds of services they want to provide end-users.