It all began last year as a kid's simple effort to get new music. After Shawn Fanning, then 18, wrote a program enabling him and his friends to share tunes, Napster was born and Fanning became a hero. Thanks to a multimillion-dollar lawsuit, the young music lover's pet project has changed, but his early experiment with peer-to-peer computing has also altered the Internet.

Just as B2C and B2B became buzzwords, everyone from entrepreneurs to venture capitalists is touting P2P as the next big thing. Statistics from PricewaterhouseCoopers and Forrester Research show that P2P technologies have transformed the recording industry, but little has been said about how distributed computing might affect companies in other industries, and how new applications of distributed computing could affect the Internet economy as a whole.

How can companies use the technology to improve communication with customers and ameliorate customer service? How can e-business companies incorporate the technology into their business models? These may be the questions of the future.

"Peer-to-peer technology will inevitably spawn many companies that use Napster-like services to distribute product," says Clay Shirky, a partner at the venture-capital firm The Accelerator Group. "What distinguishes these companies will be the way they understand that simply using this technology isn't going to change anything unless there's a compelling reason to do so."

Perhaps the most talked-about firm employing technology-distributed computing in its infrastructure is Groove Networks Inc., based in Beverly, Massachusetts, and run by Ray Ozzie, the inventor of Lotus Notes. The company's model is simple: Develop interactive spaces, facilitate collaboration within those spaces, and run it all off of wasted computing power on the participating machines. At the center of this approach is a proprietary service that companies employ to add particular functionalities to their pre-existing management systems — including chat, instant messaging, video or audio.

Raghu Ramakrishnan, founder and CTO of Quiq Inc., based in San Mateo, California, was so impressed with the model that he used it as a guide to design his business.

At its core, Quiq and Groove are very similar. Through Quiq's flagship service, companies will be able to connect with their partners, users and vendors, and form communities that allow each to interact and share data accordingly. While Groove applies to customers of every ilk, Quiq's service will be only for those who meet specific qualifications. Still, according to Kevin Lenzo, assistant scientist at Carnegie Mellon University's Institute for Software Research, International, these technologies are only the beginning.

"In terms of communication, I see distributed computing as the spontaneous formation of communities, irrespective of geography," he says. "The technology allows for the kind of communitarian behavior that wouldn't necessarily happen otherwise on the Internet if you just had random people logging on to a central place."

While Groove seeks to aid employee communication and customer relationships, other companies are looking to incorporate P2P technology into the very infrastructure that drives their e-businesses. Some are building networks that put e-commerce around the people who use them most: customers.

Startup companies trying to utilize this tactic include MyCIO.com, which recently rolled out a Napster-like P2P file sharing technology and service for managing anti-virus updates, and InfraSearch, which uses P2P to develop searches that connect buyers directly with sellers and vice versa. Even Internet powerhouse eBay admits that it's exploring the feasibility of incorporating some sort of a distributed model into the company's now-famous marketplace.

Although these firms differ by industry, the idea behind deploying P2P is the same: Decentralize the infrastructure in an attempt to lower costs and improve efficiency. At MyCIO, for example, the first five users in a network automatically retrieve anti-virus updates, then act as servers for everyone else. Every time one of these users gets a new update, the machine sends out queries to see which other users need it, then supplies those who do with a copy of the file. Zach Nelson, the company's president and CEO, says that because the computers communicate with each other, there is no need for a client-side server to coordinate the updates.

"We saw that the whole client/server model was too slow," he explains. "If you're shipping bits and bytes of anything, when you're talking about large package distribution to a number of customers, peer-to-peer is the only way to go."

But the business-to-consumer venue isn't the only one for distributed computing. In an essay published recently by the Harvard Business Review, Andrew McAfee writes that those in the business-to-business market can use P2P to avoid membership fees, reduce networking complexity on the back-end, and coordinate with companies in a variety of industries, rather than sticking to affiliations with companies just like theirs.

"There are many uses we can make of intelligent machines, but the key to figuring out what they are is identifying that all interfaces are different," says Dan Bricklin, founder and CTO of software company Trellix Corp. and creator of VisiCalc, the first electronic spreadsheet. "If you use the model of 'choose the right tools,' you'll hopefully be successful. If you copy someone else without thinking, you will fail."

According to venture capitalist Shirky, the real answer may be a melange of decentralized and centralized computing that incorporates P2P and client/server at the same time. He insists that this approach would incorporate the best of both worlds: the functionality and scalability of a distributed infrastructure with the security and reliability of a centralized one.

"The magic P2P pixie powder won't last forever," Shirky opines. "For this model to take hold in the e-commerce space, we've got to see some diversity."

Next: A P2P primer