Peer-to-peer readies for takeoff

This article originally appeared on Stardust.com

Content distribution companies such as Akamai have built their businesses on quickly pushing web pages in the most efficient way possible over their networks.

Now a new breed of networkers is seeking to harness the power of Internet users to optimise content delivery, often bypassing dedicated servers and instead relying on the power of individual PCs.Two players that are testing software products in beta programs -- amid controversy about the viability of so-called peer-to-peer distribution -- are Red Swoosh Inc. and Kontiki Inc. Red Swoosh draws on the talents of engineers and programmers from the defunct Scour Inc., while Kontiki is backed by some of the same people who created Netscape Communications, including Marc Andreesen.

'(We build) more efficient routes to deliver data by having knowledge of all caches on the network,' says Travis Kalanick, founder and CEO of Red Swoosh, based in Los Angeles. 'It's an intelligent solution to better leverage existing infrastructure.'

Kalanick -- who doesn't advertise Red Swoosh as a peer-to-peer company -- prefers to describe it as a next-generation digital media delivery system. 'Do we leverage the desktop -- yes,' he says. 'Some people call it p to p.'

Major competitor Kontiki, which sells a self-described personal delivery network for multimedia digital files, last month announced that its pilot customers included VeriSign, TiVo, Sony Pictures Digital Entertainment, Palm, MP3.com, MondoMedia, Loudcloud, LivePlanet, Jamcracker, and Amazon.com.

Mountain View-based Kontiki's core service is a delivery network leveraging the power of user PCs. Kontiki files are sent from caches at the edge of its network and to save bandwidth, they're transmitted at off-hours. The system can download different parts of the same file from multiple servers as well as nearby PCs, to take advantage of the fastest source.

Kontiki has received $18 million in funding from Benchmark Capital and the Barksdale Group, a venture capital firm led by former Netscape CEO Jim Barksdale. The first release of its software is due in early December, according to a spokeswoman.

Kalanick says Red Swoosh has five small beta customers (he declined to name them) with 'thousands of concurrent machines' including 'a major media company.' He adds he is in 'advanced channel discussions' with major CDNs and will announce an alliance in the next four to six weeks.

The target is enterprises, media companies and ISPs that have large pieces of rich media content to deliver, not the end user. Kontiki, according to its Web site, is focusing on the enterprise and entertainment markets.

Peer-to-peer content delivery firms are likely to pick up an increasingly large share of the Internet content delivery market over the next few years with revenue climbing to $3.1 billion by 2005, according to researcher Peer to Peer Central.

The theory behind peer-to-peer, popularised by Napster, is that it's cheaper to store and deliver content on a neighbouring computer rather than on a central server, where it must travel to the other end of a network.

'We can deliver content on an order of magnitude more efficiently,' says Kalanick. 'When a content provider plugs us in it supercharges their network.'

The question for players like Red Swoosh and Kontiki is whether they can put computing muscle where their mouth is. Anne Zeiger, at Peer to Peer Central, says in a recent report, 'If they can offer 50 percent to 90 percent (cost) savings over infrastructure-based net media delivery, p to p content delivery players are going to have a major impact on the media business.'

Red Swoosh was founded last year by several former Scour employees with the urge to apply what they had learned in running the music and video file swapping service in a legitimate setting.

(Scour, founded in 1997 by five UCLA computer science students, ran into trouble when the recording and motion picture industries filed copyright suits. It declared bankruptcy in October 2000 and its assets were bought by CenterSpan Communications Corp. The lawsuit was settled out of court.)

'We've seen hundreds of thousands of connected databases handled hundreds of millions of files,' says Kalanick of the Scour experience. 'We have deep, deep experience and know the problems.' At one time, the service managed 250,000 users.

Problems with peer-to-peer, skeptics say, include the obvious concerns about reliability and safety. Desktop computers aren't as reliable as servers used to run corporate web sites and there is the issue of content being transmitted in its original state without corruption.

But more important is 'whether it can work,' says analyst Mike Neuenschwander of The Burton Group. 'You have to have scalability. I like the idea but I don't know how popular it will be or how scalable.'

Kontiki says its network contains self-healing capabilities and maintains the integrity of the content through a secure distributed management protocol as well as through digital rights management. Red Swoosh users grant permission to share their files and Kalanick says his experience with Scour proves 'we found we could scale thousands concurrent machines.' However, safety, in addition to the pending litigation, was a factor in Scour going out of business.

Technology
Red Swoosh works with a 'very light' piece of software similar to a Yahoo-like (transparent) applet installed on users' machines, Kalanick says. Anytime a user requests content, that client takes over for the browser and pulls from multiple sources and reassembles the packets locally.

That includes pulling from other caches any streaming audio and video. 'We can deliver anything Akamai can,' Kalanick says. Unlike Akamai, which has thousands of servers worldwide within hundreds of networks, Red Swoosh has software that has knowledge of those servers and networks.

'My software can point people to them,' he says. 'We work with PCs and servers in a CDN.'

Neuenschwander says Red Swoosh could argue it's less expensive than Akamai because customers don't have to pay for all the hardware and infrastructure. In addition, if it can prove the technology works for a large site with a lot of hits, it would have an edge.

'Maybe Akamai isn't doing everything it can' in delivering content during times of heavy usage, he says, noting that it was difficult to get on the CNN Web site during the Sept. 11 disaster and the recent Queens plane crash. CNN Interactive is an Akamai customer.

Desktop based p to p approaches, according to a company spokeswoman with Akamai, may be fine for the sharing of music files, 'but don't rise to the mission-critical standards of today's enterprise, and therefore do not compete with Akamai.'

The average cost to a Red Swoosh customer would be based on the number of users and could range up to $0.10 per user. Kontiki, according to a published report, charges a $10,000 activation fee and $6,000 a month to deliver 500,000 megabits of data.

Competition
In addition, p to p companies face stiff competition among themselves. Red Swoosh is taking pains to distinguish itself from Kontiki, while facing opposition from streaming players such as ChainCast, Blue Falcon and vTrails.

Kalanick says the major difference between his company and Kontiki is 'we're not a consumer-facing application. Our focus is infrastructure and their focus is being the next browser for video content.'

He contends that customers -- content providers -- want to 'own the relationship with the end user and don't want to put a new brand in front of the end user. They like to control the interface, relationship.' Kontiki executives declined to comment.

On its Web site, Kontiki says its software will help content providers better manage, deliver and monetise digital content and in the case of entertainment companies, can help them sell high-quality video-on-demand. Zeiger says a business model that relies on downloads may take some convincing. 'There's not significant evidence that people will pay for anything online other than porn,' she says.

While the jury is still out on Red Swoosh and Kontiki, one company both Zeiger and Neuenschwander say is worth watching is CenterSpan. (The company is turning Scour into a subscription service aimed at 18-30 year-olds. It started beta testing in April and is expected to launch in the first half of next year.)

The Hillsboro, Ore.-based company, part of the Intel Capital portfolio, is publicly held. Its C-star peer-to-peer network distributes digital media, including music and video with a central server that provides a direct link between individual computers to ensure file-sharing. CenterSpan recently chose Microsoft Windows Media digital rights management technology for security and copyright protection.

'If demand for paid digital content is there we think CenterSpan's in an excellent position to meet it, but we're still not sure entertainment buyers are ready,' Zeiger's report says.