Today we heard that P2P browser plug-in AllPeers has shut down, a blow to a market that seemed very promising back in 2006. Indeed, with AllPeer's closure and the lack of progress of similar services such as Skyrider, we have to wonder about the viability of commercialising P2P as a service.
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Back in August 2006 we wrote about a service called Skyrider, which at that point was promising they'd launch "by fall". A Skyrider press release from that time trumpeted that "P2P has the potential to be the dominant network architecture of this century" and there was no shortage of blog buzz - e.g. Tim O'Reilly likened Skyrider to Google. All this for an unlaunched, unseen product. But unfortunately, 18 months later, there's still no sign of the product.
Some P2P promising apps circa 2006; RedSwoosh had a nice exit, acquired by Akamai in April '07.
As we noted back in '06, P2P is about many-to-many distribution and has so far been most useful for distributing music and other large multimedia files. Just today we heard that the music band Nine Inch Nails is releasing their new album via BitTorrent. So clearly P2P is of great utility for distributing media over the Web. And let's face it, P2P could be the key to the future of social networking and online video - two of the most important parts of the consumer Web - because P2P provides a scalable architecture for storing large media files. The trend is for UGC (user generated content) to continue to ramp up, with more and more multimedia (= large files).
There have been some notable web 2.0 apps built on top of P2P networks. The most famous is probably Skype - self-described as "the first P2P telephony network". Skype has proven that P2P can be the backbone of a very successful startup venture, if all the stars align.
However AllPeer's failure and Skyrider's 'failure to launch' indicates that the commercial market for P2P, as a standalone service, is as hard as ever to crack. Skyrider is said to be still around and raising money, but frankly it's not a good look to promise something revolutionary and 18 months later still not have a real product out.
Conclusion: Commercialising P2P = Tough Market
AllPeers set out to add "file sharing to the web browser". Technically the service seemed fine, however the reason for the closure according to their blog is that "we have not achieved the kind of growth in our user base that our investors were expecting, and as a result we are not able to continue operating the service." That indicates that AllPeer's problems were more based around marketing and the luck of the draw in getting a startup to ramp up (which can be as serendipitous as a StumbleUpon click).
We've seen that P2P can be used with success in a startup (ref Skype); and of course there is still a thriving underground network for P2P. However commercialising P2P as a service appears to be going nowhere fast (if anyone has an update on Skyrider, please leave a comment). And it also perhaps indicates that technically speaking, P2P holds too many challenges for startups to commercialise - that seemed to be the opionion of Tim Bray and Radia Perlman of Sun Microsystems when I interviewed them in August 2006.
What are your thoughts on P2P's commercial future?
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