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Writing file sharing's final chapter

Computer scientist and entrepreneur Gene Kan draws lessons from the history of peer-to-peer technology to warn what often happens when people get overly excited about new technologies.

Editor's note: Gene Kan, who wrote this column for CNET on June 21, was an entrepreneur who helped articulate the potential of peer-to-peer technology in various articles and appearances at industry forums. He was 25 when he passed away on June 29.

Each time a new concept was unearthed during the boom days of the Internet, venture capitalists would chase it. Checkbooks in hand, they backed countless start-ups, flogging each one as the next big thing.

But every time something new came along, it also triggered a Darwinian process of natural selection. The start-ups making the best use of the new technology tended to be the long-term winners; the many who misunderstood the technology ended up as inevitable losers.

The Internet encouraged people to find ways of turning things upside down and challenge the predominant client-server computing model. One of these new ways of thinking about personal computing was peer to peer, a technology that quickly outgrew its humble beginnings when it was seized upon during the waning days of the New Economy.

Peer to peer toiled inconspicuously powering chat software until Napster and SETI@Home demonstrated the inherent big, new idea that average PCs are powerful. With peer to peer, mere desktop computers became file servers or nodes of virtual supercomputers. Soon, a theory developed that everything would be "Napsterised." (Napsterise: to disrupt the businesses of middlemen, cheaply, on a groundswell of popular support.) That didn't happen.

At its peak, there were more than 100 peer-to-peer start-ups. There now remain, at most, a couple of dozen companies concentrated in a few niches. The main activity of companies venturing into peer to peer is file sharing. But the dozens

At its peak, there were more than 100 peer-to-peer start-ups. There now remain, at most, a couple of dozen.
of overoptimistic forays into alternative economic systems, hyper-sophisticated technologies, and recording industry collaboration turned out to be dead ends.

Peer-to-peer auctions, peer-to-peer supply chain management, and peer-to-peer e-mail may have failed because they were ahead of their time. It's more likely they failed because they were just ahead of themselves.

Clearly, the public's appetite for file sharing has increased, and the state of the art has improved dramatically. But companies have still not yet found satisfactory business models, thus leaving file sharing's last chapter unwritten.

Brighter side of the story
Emerging from all the carnage, there is a bright spot: file sharing's mutation into content delivery. Indeed, peer-to-peer content delivery uses proven file-sharing technology. Napster and others proved that peer to peer can cut costs nearly to zero. Scour proved that ISPs can play along. There are scant remaining technical challenges.

On the business side, things couldn't be simpler--deliver content to consumers more cheaply and effectively than owner-operated or Akamai-based distribution, with huge margins due to the virtual infrastructure. If ISPs hold the line on un-metered access, peer-to-peer content delivery could be a panacea. Peer-to-peer content distribution networks may do to Akamai what interstate trucking did to railroads--in identical economic and technological fashion.

That is why there are now at least 10 peer-to-peer content distribution networks start-ups, each aiming to Napsterise Akamai.

The lessons of peer to peer teach what happens when people get overly excited about new technologies.
In the year or so since incorporating, these companies have already separated themselves into future winners and losers based upon their individual readings of what is at the heart of peer-to-peer content delivery. Skeptics already know the destiny of each of these companies. But optimism, the archenemy of sound decision-making, clouds the judgment of most.

The lessons of peer to peer teach what happens when people get overly excited about new technologies. There is a gem in every new technology, but the painful process of extraction is protracted, leaves piles of waste, and is doomed to repetition.

The philosopher George Santayana famously quipped that "those who cannot remember the past are condemned to repeat it," but he said nothing of those who can. We repeatedly prove that even careful students of past mistakes optimistically rush to be first to repeat them.