Fast growth forecast for enterprise P2P
One of the benefits to emerge from the interest in incorporating P2P networking into enterprise-class solutions was the formation of the P2P Working Group. Originally founded by Intel, the group now consists of several member companies involved with P2P networking and distributed computing (P2P computing). The P2P Working Group is directly involved in facilitating the development of solutions for problems that P2P networking currently faces. However, because the Working Group consists of several companies, the goal of the technical architecture committee is to seek out issues in P2P technology with commonality that will not give a competitive advantage to any party. An example of the committee's work is figuring out how P2P developers should deal with firewalls and network address translation.
Another problem being examined by the working group is the common problem that arises when two peers attempt to communicate through well designed firewalls. Depending upon the design of the firewall, peers on P2P networks have found utilizing P2P technology a difficult prospect. Even a simple application such as Napster can be hindered if both of the peers are behind firewalls. Because there are good reasons to have firewalls in place, the questions have developed regarding how the P2P networking community should address firewalls while maintaining the protection they afford a network.Although P2P networking will become more prevalent in the work place over the next seven years, that does not imply that it will be similar to Napster or Gnutella clients that allow the free exchange of data. P2P networking within the enterprise will not appear as stand alone clients, rather the P2P technology will be one component of a total solution. In most cases the P2P networking component will be closely managed by security features that control the sharing of data within an organization helping to prevent IP theft. To further satiate the IT manager's desire for control over a network, most P2P networking components found in the enterprise space today lean heavily towards centralized control of the system.
Other technological developments in P2P networking over the past year have helped to decrease the bandwidth consumption of certain P2P protocols, the most notable development originating from Clip2.com [which has since ceased operations]. The Clip2 Reflector is a proof of concept technology that shows the IT community a way to manage bandwidth-intensive protocols such as Gnutella. Once implemented on a corporate network, the reflector aggregates and manages all Gnutella traffic on the LAN and carefully controls said traffic as it passes into and out of the corporate firewall. Additional notable developments in the P2P networking space have come in the form of the Intel Trusted Library, Sun Microsystems Project JXTA, and Proksim Software's work in the area of Internet gaming.
Although the technology is continually improving, competition among companies wanting to bring P2P networking to enterprises is sparse. Press coverage highlighting the use of P2P networking applications for intellectual property theft and other potentially illegal activities has scared many companies away from the technology. Due to the poor coverage of P2P networking in the national press, many companies that admitted to having P2P networking components in an enterprise solution have begun to publicly downplay any involvement with the technology.
The lack of strong demand for solutions employing P2P networking and a slow economy worked together to minimize the number of companies in the U.S. utilizing the technology by early 2001. It is also crucial to remember that P2P networking is an architecture, not a business, therefore competitiveness in this area would entail rival companies adding a P2P networking feature to an enterprise-class solution targeted to identical markets. Furthermore, in the course of speaking with companies incorporating P2P networking in enterprise-class solutions, Frost & Sullivan found that the majority of companies are not in the same market and will not compete with each other.Due to the fact that the companies profiled in this report are first movers, they have little or no competition in the markets they intend to serve. This presents tremendous opportunities for those already embracing P2P networking as a component part of their enterprise-class solution. However, competition will arise in the enterprise P2P networking space over the next 24 months [from June 2001] and some of the new entrants could be formidable.
The popularity of P2P networking among home consumers is well known, but that popularity does not easily translate to enterprise users. Enterprise resistance to allowing any form of P2P networking on corporate LANs is expected to slow the adoption rate of the technology among business users. Frost & Sullivan forecasted that by the end of 2001 the U.S. market would have approximately 61,410 enterprise users of some form of P2P networking technology. This number is expected grow substantially to 6.2 million enterprise users by 2007.
As these numbers grow, so will the revenues within the markets they serve. In the content delivery market, Frost & Sullivan predicted that revenues would total $840,185 in 2001. By the end of 2007, P2P networking technology is expected to help generate over $422.9 million with a compound annual growth rate (CAGR) of 182 percent. Similar positive growth patterns are expected in the following markets:
- P2P Supply Chain Management: $446,020 in 2001 and $365.6 million by 2007 for a CAGR of 205.9 percent
- P2P based Business Exchanges: $372,960 in 2001 and $2.59 billion by 2007 for a CAGR of 336.8 percent
- P2P-based Collaboration Solutions: $39.4 million in 2001 and $976.7 million by 2007 for a CAGR of 70.8 percent
- P2P-based Knowledge Management: $2.6 million in 2001 and $604.4 million by 2007 for a CAGR of 147.8 percent
- P2P-based Search Engines: $35,000 in 2001 and $1.4 million by 2007 for a CAGR of 84.2 percent
Inherent distrust of P2P technology will become less of an issue as developers show the enterprise market ways to incorporate security and digital rights management into all solutions that utilize P2P networking. Developers that do not recognize the need of the enterprise market to prevent unhindered access and trading of digital assets will never gain traction in the U.S. market. The RIAAs case against Napster has helped to bring the issue of intellectual property (IP) rights to national prominence and underscored the danger of uncontrolled implementations of P2P networking. In an economy increasingly reliant upon licensing agreements for the use of IP, lack of control over digital assets can financially destroy a company.
These concerns must be directly addressed by all companies offering a solution with P2P networking components.
Secondly, Frost & Sullivan believes that if a software package has a P2P networking component, that information should not be glossed over by the company selling the solution. Rather, the use of P2P networking technology should be openly discussed in the sales process with an emphasis placed on security features built into the product that control the use of P2P networking in the solution.
Lastly, as additional companies consider bringing P2P networking to the enterprise space it is important to remember that P2P networking by itself is not a business model. P2P networking is an architecture that can be a integral part of a software solution, nothing more. Developers that do not understand the difference between a sustainable business model and an uncontrolled architecture that aids in the theft of IP will not survive. To illustrate the point, one can examine the circumstances surrounding the bankruptcy of the old Scour Exchange or look at the irreversible erosion of Napster's user base currently underway as a result of RIAA court victories. In short, if your company wants to bring P2P networking to the enterprise space, it must be brought to enterprise users as part of a comprehensive software solution that addresses real business needs.
The preceding article was excerpted from the report, "Enterprise Peer-to-Peer Networking Markets," by Jarad Carleton, program leader, internet infrastructure, Frost & Sullivan.
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