Bielski, Lauren, ABA Banking Journal
Forget about Napster, p2p is for everybody and is about collaboration
Peer-to-peer technology first generated real ink when the music-sharing website, Napster, forced the big labels into the courtroom to defend their products.
Why should banks care about something that affected record companies? Because Napster's notorious profile, and the peer-to-peer hype that ensued, tended to obscure the technology's uses as a collaborative tool for financial services companies.
To the extent that peer technology means anything to bankers, many probably equate it with file sharing and "cycle stealing"--a scheme that lets one computer's idle time be co-opted for use by another. But the technology can also extend the power and reach of web applications, that is, business logic that's already been converted for use and distribution over the internet.
Putting business uses aside for a moment, peer-enablement itself is created by use of common messaging formats (which we'll get into later) and common net-friendly languages, most notably XML. This allows two peers to exchange files, programs, or computational power -- depending on how the technology is deployed.
At its root, this technology's greatest boon is its ability to facilitate the comparatively easy retrieval of data--at least that's how one analyst sees it. "What's great about the technology is its ability to make any digital 'information' located in a peer member easier to get to for the support transactions and other work," says Robert Hegarty, director of investment management at TowerGroup, Needham, Mass. "While a member will, of course, have to be proactive about getting peer-enabled, they won't have to be proactive about searching out data once they are set up to operate in a peer environment," Hegarty adds.
In the case of the Wall Street-oriented vendor, Worldstreet, the transaction in question includes locating two peer "members" so they can transmit research. Another financial services player, Liquid-Net, lets users identify each other and signal their interest in deal making in a virtual market.
The potential of peer computing seems "nearly limitless and would have a profound impact on buy-side trading and the analyst portfolio management community," says Hegarty. Having recently issued a report on the technology's impact on Wall Street, he sees numerous potential uses for fund managers and traders who live--and die--by data. Today, under client-server, this data resides in a database and can only be accessed by reaching a server.
Simplified data retrieval is one of peer-to-peer's gifts, but web collaboration is another potential benefit, and one that could bring Wall Street and Main Street institutions the biggest bang for the buck.
What makes it p2p?
Peer technology vendors that support business process sharing tend to be categorized as "extranet" or "infrastructural" providers by analysts. Providing web services, as they are called, these vendors use their wares to re-format and facilitate joint use of computer code (and subsequent workflows) between business partners.
"Peer technology as we make use of it, uses 'light,' easy-to-evoke code that makes it simpler for business partners to establish links between them over TCP/IP using common data protocols," says Daniel Seltzer, chief technology officer and co-founder of Interbind, New York City. "With this easy connection work gets done between two devices -- say a personal digital assistant and a server -- that typically have different operating systems, different applications, or different capacities."
Interbind, as with some other vendors in this class, makes use of Simple Object Access Protocol (SOAP), which is one basic messaging format that, in its purest form, lets devices from different operating system environments, using different languages, communicate. "A SOAP message wraps around a proprietary chunk of code and defines that code for the recipient device," Seltzer says. …