I wrote about bittorrent here and contrasted them with the much more successful Akamai. This seems like an odd juxtaposition to some, but the fact is that bittorrent wanted to play in content distribution and even made and marketed products that claimed to do so. Of course we know their strategy was lacking vis a vis the competition.
Fast forward to this article from Ars probing the new focus of the company. I’ll quote liberally (emphasis in italics is mine):
“Founded in 2004 and headquartered in San Francisco, BitTorrent is a private company. While it doesn’t release financial information, Ghanem says BitTorrent today is profitable, making money from licensing its software, sales of premium versions of its software, and advertising. It wasn’t always such smooth sailing. In the mid-2000s, Ghanem notes that BitTorrent tried its hand at becoming a content distributor before realizing it was the wrong move.
“We moved into the content business in the mid-2000s, and became one of the largest licensees of Hollywood content in history,” Ghanem said. “We realized that wasn’t a viable business model for us…. It almost killed the business. We are not a media company, we are a technology company.””
Some re-strategizing was obviously in order when they really couldn’t compete with CDNs. They also worked hard on trying to make sure the ecosystem was not hostile to them
“BitTorrent exited the distribution business in 2007 or 2008, Ghanem said, and is now focusing on a few key goals. In addition to developing the BitTorrent protocol that most Ars readers will be familiar with, BitTorrent, Inc. also developed the uTP protocol to relieve Internet congestion problems that BitTorrent traffic contributed to. Ghanem said uTP now regulates the majority of BitTorrent traffic, intelligently ratcheting back BitTorrent activity to allow more critical traffic (such as Internet-based phone calls) to come through, and giving bandwidth back to BitTorrent after the critical traffic has passed.
The BitTorrent protocol accounts for roughly 20 percent of Internet bandwidth usage. There are dozens of clients using the protocol, but BitTorrent and µTorrent make up about 80 percent of market share by number of users—excluding China, a country in which the company has only a nominal presence. How do you build on those numbers? BitTorrent is taking several approaches.”
It looks like it happened and the company found a good niche
The company’s new live streaming technology, BitTorrent Live, is available in beta, and already being used to stream concerts. A personal sharing app, available in alpha, is designed for users to send videos, photos, and any files to friends without any limits on size. Perhaps most ambitiously, BitTorrent is working on a peer-to-peer cloud storage system, but the project is just in the R&D phase and Ghanem could give no indication of when it might become available publicly.
“We have figured out how to become the dominant provider of technologies that allow distribution of data across the Internet in a peer-to-peer fashion,” Ghanem said. “What we’re looking at now is, ‘can we take these billion PCs around the world that are networked together and create a way for them to have distributed storage capability?’ Rather than uploading everything into a data center, which is called a cloud, can’t the cloud be these billion PCs connected to one another, sharing disk space, sharing backplane, sharing computational power, and sharing bandwidth?”
Finally they’re providing tools to on ramp into their products and services. Something which will grease the wheels and may generate more service and annuity revenue down the line.
BitTorrent has also built publishing tools to help content creators distribute content through BitTorrent to users (including educational materials), has applications for Android, and says it’s in talks with system-on-chip vendors and device-makers about optimizing chips and devices for distribution of content to TV set-top boxes, Blu-Ray and DVD players, smartphones, and tablets. Ultimately, Ghanem says the company wants BitTorrent software to have the reach of iTunes, but without proprietary restrictions.
In summary, their strategy wasn’t working, they retooled and refocused to a portion of the market they had some advantages, while working to be better ecosystem players. And they began to pay attention to on ramps to their products. Sounds like some of the gaps I identified in the previous article. A few additional things would be:
- Take more control over the technology platform if possible. Maybe like MySQL so it’s not totally a free for all.
- Build a great API layer for your product to increase the amount of innovation that can happen with it.
- Increase distribution via new emerging platforms like iOS, Android and Windows 8.
