Looking back, you can see how software programs have changed business — and the culture of business — forever. In the early 1980s, the spreadsheet program Lotus 1-2-3 sparked the onset of all of those hotshot mergers-and-acquisitions shops. Young, ambitious, smart twentysomethings at Morgan Stanley and Drexel Burnham, armed with 1-2-3, became mini masters of the universe, running the numbers on every company in every business category and targeting the underperformers and underleveraged for shark attack. Investment banking would never be the same.
By the end of the 1980s, we all had Lotus 1-2-3 or Microsoft Excel on our desktop or laptop. Excel came bundled in Microsoft Office, which came with every personal computer. Number crunching was no longer the province of accounting, finance, or high-end consulting. It was something that anyone could do.
The next great leap was groupware. Ray Ozzie and his development team at Iris Associates introduced Lotus Notes, and again the world of business turned. Notes rendered layers of middle management obsolete. Who needed all of those paper pushers? Ozzie's software made it possible to work across, up, and down every division of an organization. Teams could work a project, share their lessons, create valuable records of their team-based knowledge — and then reform on another team, another project. By the end of the 1990s, Notes had sold 60 million units, or "seats." And as a result, corporations were streamlined, reengineered, and remade.
In the latter half of the 1990s, the Netscape browser arrived, changing business and the culture of business yet again. Netscape gave rise to what the Boston Consulting Group's Philip Evans and Thomas Wurster called the "new economics of information." The Internet erased the trade-off between richness and reach, deconstructed the value chain, and turned Internet technology into a strategic weapon.
With each software advance, management theory focused on the opportunity for organizations to embrace empowerment and on the need for them to disperse power to the edge of the enterprise. Give your people the tools and the chance to do the job, theorists said. Push as many decisions as far down into the operation as possible. That's where customers meet the corporation and where operational intelligence rubs shoulders with demand.
Underlying this software was information-technology hardware that was all about client-server. For all of the ingenuity of 1-2-3, Excel, Notes, and Netscape, the iron still answered the dictates of a traditional command structure. The technology of business worked, in fact, much like broadcast television: A central station sent out packets of information to a hundred, a thousand, a million nodes (or "end users," as they came to be called).
Internet software gave end users the opportunity to gather information from the server and to communicate with outsiders and outside sources of information through the server. But the end user was still dependent on the server. The immense computing and networking power of end-user desktops and laptops lay dormant.
Which is why peer-to-peer computing will likely be remembered as the next great turn of the wheel. In 20 or 30 years, people will probably look back at the present moment and say that peer-to-peer computing changed the game. And in a neat bit of symmetry, the man who has written the first great peer-to-peer computing platform for the workplace — and for the home as well — is none other than the man behind Lotus Notes: Ray Ozzie.
Ozzie unveiled Groove last October to great excitement — as much for what Groove implied as for the elegance of its code. Software experts say that it's still a bit quirky, and because it's so new, developers have yet to invent tool sets that anticipate the full menu of user needs. But Groove is a workable — and working — peer-to-peer platform. It will get better and better and better. And corporations will run to it because it will save money (server costs) and bandwidth (clogged pipes).
Groove enriches the collaborative wired experience because it directly connects intelligent agents, creates a fully functional work space — and will eventually provide all of the necessary tools for what management consultants call "optimally productive interaction."
Groove software makes it possible for people to share text, to share files, to communicate by voice, and to work with one another's tool sets in a completely secure environment. If someone departs and others join, everyone is updated at the moment of entry or reentry. Online or offline, you remain in the peer group, and what you do offline instantly becomes part of the updated "shared work space" once you log back on.
The underlying promise of peer-to-peer computing (from an information-technology point of view) is that it will harness all of the unused processing power, all of the unoccupied storage space, into a gigantic network powerhouse. And in doing so, it will unclog servers and free ever-more-expensive bandwidth. The correlative promise is that peer-to-peer software will make software systems fully "interoperable" by carrying them through, and back and forth across, the peer-to-peer network. I can work inside your software programs, and you can work inside mine, because peer-to-peer computing imports software into the work space. Both promises, even if only partially realized, insure that companies will adopt peer-to-peer programs and platforms.
But more immediately, what matters most is the impact that peer-to-peer computing will have on work — and on games, education, politics, and culture.
Groove is a platform for Free Agent Nation. It may well be the platform for Free Agent Nation. It gives that vast constituency standing to handle major tasks without being undone by server costs and expensive bandwidth. It makes a Groove-connected team as formidable and as nimble as any ad agency, consultancy, corporate division, product-development group, research lab ? you name it.
Just as important, Groove turns responders into initiators. If you have a really great marketing idea for Pepsi, and you know people who can provide the various skill sets to make that idea fly, all of you can work together in Groove's shared space. And in working together, you can create — way out there beyond the edge of the organization — the edgiest marketing campaign ever introduced at Pepsi.
More than anything else, the power of peer-to-peer computing is that it creates an enormous sense of possibility — and that sense of possibility is the one thing that's missing at almost every corporation. How do you get at the creativity and energy that exist within the people at the edge of every large enterprise? Electrify it. Groove makes it possible to light up the edge.
Of course, lighting up the edge of an organization changes the practice of management. Slogans about empowerment and teamwork and decentralized decision making come face-to-face with the reality of what "lighting up the edge" implies.
From a management point of view, there are some defining questions: If you really do light up the edge, how do you get its thinking and ideas back to the center once it has its own peer-to-peer network? (For that matter, once you electrify a peer-to-peer network, where is the center?) How do you build a corporate community that engenders loyalty if the folks on the edge are building peer-to-peer communities — their own communities to which they will become loyal?
There are, of course, hundreds of issues raised by the power of peer-to-peer networking. Napster has raised the issue of intellectual property rights. Someone will soon hack into TiVo's digital recording system and do to television programming what Napster did to the music business. Groove and other peer-to-peer technologies raise intellectual property-right questions as well: Who owns the marketing idea, the new design, the new invention?
But the immediate challenge posed by peer-to-peer technologies and platforms has to do with leadership. What is leadership in a peer-to-peer world? In self-organizing groups, what are team dynamics? What holds it all together? What brings it back to the center? Oh, and by the way, what is the role of the center?
In the short term, even new questions yield to an old answer: money. You pay people to engage in peer networks and see what they return. If they return new and better ideas, you pay them more money. If they return rubbish and nonsense, you cut them off.
In the longer term, the answer is values. If you think in political or cultural terms, what binds people together is shared values (and, on the dark side, shared resentments). Corporations aren't really capable of organizing resentments; it runs counter to their purpose. But corporations can (and do) embody certain values. Peer-to-peer technologies challenge organizations to make those values central to their future success. Ultimately, the question that Groove poses isn't, How will we work together? It's, Who are we and what do we stand for?
Peer networks are essentially all about values. Peer groups self-organize around shared interests, in the higher context of purpose. Some football fans organize into betting pools. Others organize into Super Bowl parties. Purpose defines the expression of interest and the sense of community.
For the peer network to coalesce with the corporate network requires the foundation of shared purpose. The more that peer networks come to life, the more influential they become. They become unions of purpose. And because they are networked, they cannot be swatted aside. What you do to one person in the network, you do to the network.
You might think that seems a bit grandiose. People just do their jobs and go home. Their work isn't personal or particularly purposeful. But another, equally important feature of peer-to-peer technology is that it blurs the distinction between the work space and the personal space. And as that line gets erased, what matters to people in their personal lives matters as much to them in their work lives.
Groove — and peer-to-peer platforms like it — gives everybody the tool set to engage in peer communities, at work and at home. It democratizes technology in the same way that Lotus 1-2-3 democratized spreadsheets and the Internet democratized content.
At first, companies that embrace peer-to-peer computing will engender confusion and cross-purpose. But if the leaders of those companies are patient, if they engage the edge and work with it, they will finally harness all the power of the edge. Very few companies do that today. Now they're going to have the chance. Peer-to-peer is technology's next corporate character test.
John Ellis (email@example.com) is a writer and consultant based in New York.
A version of this article appeared in the May 2001 issue of Fast Company magazine.