IT industry faces hard choices in wake of Napster

The high-tech industry is torn over the value – or peril – of p-to-p (peer-to-peer) networking, the technology pushed to the forefront by the highly publicized Inc. and Napster Inc. copyright disputes.

However, while experts debate whether p-to-p is a valuable way to distribute data over the Internet or a hazard to companies that want to keep their private matters private, vendors are stepping forward on both sides of the issue, hoping to cash in.

Cringing at the notion that documents can be passed around so easily, corporate IT shops are looking to safeguard their data.

“I am astonished that people expose their hard drives to someone else,” said Dwight Davis, an industry analyst at Summit Strategies, in Kirkland, Wash. “With Napster in particular, everyone thinks of consumers sitting at home downloading music, but I’m sure they’re using their office computer to do that, too. To have a potential back door to your network is a big issue.”

To that end, PricewaterhouseCoopers (PwC) soon will push a new service dubbed DigiHub that is designed to protect everything from sensitive documents and e-mail to copyrighted DVDs.

By combining DigiHub with the service firm’s digital rights management capabilities, PwC is aiming to leverage intellectual property rights protection gains from the music industry for areas such as business-to-business and business-to-consumer ventures.

“The idea [behind DigiHub] is to create an infrastructure where you can carry out commerce. What if you could walk into any retail store and just take what they sell? It is just as obvious if you are talking about the Internet or a 7-Eleven,” said Steve Abraham, managing partner of information, communication and entertainment consulting practice in the Americas at PwC in New York.

On the digital rights front, ContentGuard is broadening its reach beyond e-books. Last week the McLean, Va.-based company, which makes software for protecting intellectual property and controlling how it is accessed, announced a deal to embed its platform in e-Vue’s compression system for video distribution.

President and Chief Operating Officer Ranjit Singh said ContentGuard would announce key partnerships with audio companies in the next four to six weeks.

The specialty for e-Vue is providing MPEG-4-compliant streaming media for the delivery of still images, video, and audio over the Internet. An enhanced version that incorporates the ContentGuard technology should be out before the end of the year.

The sheer survival of free music services may depend on the outcome of court cases, such as the battle between and Universal Music and the pending Napster case.

In the meantime, IT shops are looking to manage their users’ p-to-p capabilities, but are doing so with no fanfare.

“If some large company comes forward and says ‘we have a big problem because employees are sucking up corporate resources with Napster,’ that says a lot of unflattering things about that company,” said Eric Scheirer, media and entertainment analyst at Forrester Research, in Cambridge, Mass.

But colleges and universities are not as shy about Napster. According to Gartner, 34 per cent of schools nationwide have banned the music-trading program, thanks to both legal issues and technical reasons such as network access and broadband bandwidth.

“Corporate managers should learn from … their collegiate counterparts and ensure that copyright policies within their own organizations are created and adhered to,” said P.J. McNealy, senior analyst for e-business services at Stamford, Conn.-based Gartner, which polled 50 colleges and universities.

Although some vendors are helping IT combat p-to-p, others are looking to make the Napster experience more palatable.

For example, Topical Networks is building a Web site,, that through a partnership with, based in Winnipeg, Ont., will offer technology that lets users pay artists voluntarily — a file-sharing honor system.

“The system will have the ability to have set fees for each MP3 that is downloaded in the future,” said Matt Miszewski, founder of Milwaukee-based Topical Networks.

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