Peer-to-peer computing – the sharing of computer resources and services by direct exchange between systems, is not living up to its hype as a revolutionary way for vendors to create revenue across a wide range of markets, says Ovum Ltd., a London-based research firm.

While P2P will become an essential part of some enterprise product offerings, generating real revenues will be more difficult, Ovum notes. Collaborative knowledge management is the only area in which there is a sound P2P business case, Ovum says. The sector is projected to generate $250 million in revenue by 2005.

"Peer-to-peer applications allow greater effectiveness in sharing resources and information at lower costs, which works well for knowledge management applications," says Christine Axton, Ovum senior consultant. "New players adopting a P2P approach will have an initial competitive advantage. However, P2P will only become a norm as it is incorporated into existing products by established knowledge management vendors."

Users of P2P computing are able to exchange or share information, processing cycles, cache storage and disk storage for files. It is supported by desktop computers and allows users to act as both clients and servers, reducing the load on traditional servers.

Though opportunities for P2P computing also exist in such areas as grid computing and content delivery networks, the revenue potential is less certain, Ovum notes. Content delivery network start-ups, for instance, face many competitors and the strong customer bases of existing CDN players.

While companies supporting grid computing – the networking of standard computers to operate as a supercomputer – also are moving to adopt P2P, the abundance of free open source and academic initiatives in the area are expected to limit opportunities.

"Many companies are jumping on the bandwagon, believing there is instant money to be made," Axton says. "Startups offering standalone products face very tough competition. As P2P becomes a standard approach, it will be even more difficult to gain market share."

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