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SAN FRANCISCO -- The first conference dedicated to peer-to-peer computing kicked off here Wednesday morning, as proponents tried to define the emerging computing model and talked about ways it can benefit the enterprise.

Absent from the O'Reilly Peer-to-Peer Conference was Napster, the music file-sharing service that has done much to popularize peer-to-peer computing. The company is being sued by the recording industry for allegedly encouraging music piracy, and Napster officials were concerned about the legal ramifications of speaking in public, according to Tim O'Reilly, founder and chief executive officer of conference organizer O'Reilly & Associates.

"The difficulty that I had in getting someone from Napster to speak says something to the chilling effect of legal intervention in the industry," O'Reilly said in his opening remarks. "Literally, they felt like they couldn't say a word."

A spokesperson for Napster denies that the company stayed away because of legal concerns. In fact, she says, Napster was never asked to take part in the conference.

Napster Spawns Fears

While Napster helped popularize peer-to-peer computing, it may also have set back its use among businesses because of its association with copyright infringement, says Ray Ozzie, founder and chief executive officer of peer-to-peer platform vendor Groove Networks, and creator of the groupware program Lotus Notes.

"We see all these dollar signs when we think of the enterprise as our customer, but there are some deterrents based on what these people have read about us," he says. "There is this undercurrent from Napster that you P2P people don't have any respect for intellectual property."

In fact, Napster is only one example of peer-to-peer computing, a computing model that makes use of resources -- such as processing power, storage, and content -- lying idle in PCs scattered across the Internet. Central to the model is the idea that clients communicate with each other independent from central servers and databases, which proponents say can reduce costs and boost the efficiency and reliability of applications.

However, empowering individual PC users is also worrying for businesses, who foresee chaos in their networks in the form of unauthorized access, viruses, and unpredictable demand for bandwidth, Ozzie says. He noted that some organizations have had to ban the peer-to-peer file-sharing service Gnutella from their networks because it chewed up too much bandwidth.

"The language you guys [use] about giving power to individuals on the edge of the network scares the bejesus out of [enterprise customers]," Ozzie said, addressing a packed hall of peer-to-peer start-ups, journalists, and investors.

The golden rule for IT managers is "Do no harm," he says. Companies aren't ready yet to buy tools for building their own peer-to-peer applications, because many don't even know what peer-to-peer computing is. Companies want to buy "solutions" that slip into their existing infrastructure and demonstrate a good return on investment, he says.

Corporate Visions

A successful peer-to-peer application could be a simple file-sharing system that stays within the walls of a corporate intranet, says Eric Schmidt, chair and chief executive officer of Novell, who spoke on a panel here. "Linking other businesses using the Internet is a whole different game," he says.

Several companies at the show are hawking peer-to-peer applications, some of which are already being used by businesses. Following is a small selection:

Porivo Technologies is promoting a peer-to-peer technology used to test the performance of Web sites and identify bottlenecks in the Internet. Users who download and install the company's software become part of a distributed application that tests the performance of Web sites using idle processing power on each user's PC. In return for taking part, users can win gift certificates. FirstPeer is introducing what it calls the first peer-to-peer marketplace, GnuMarkets, which includes applications and services that allow users to buy and sell items over the Web. Instead of using a large, central server like most marketplaces, users download First Peer's marketplace application and the system operates using the spare storage and processing power in its members' PCs.

3Path says it provides businesses with a more reliable alternative to e-mail and extranets for delivering valuable, time-sensitive documents to customers -- a kind of Internet version of registered mail. A beta version of the service was launched Wednesday, aimed at research, brokerage, management consulting, and specialty publishing firms.

Entropia announced a new version of its distributed computing platform, which harnesses unused processing power in PCs throughout a company to run applications that need very high levels of computing power. Users download a piece of Entropia client software, and it runs in the background on their computer to make use of otherwise wasted processing power.

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