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Popular Power Turns Off the Lights

by Richard Koman

Distributing computing pioneer Popular Power closed up shop today, adding 14 employees to the ranks of the Internet unemployed. The San Francisco company, founded by Marc Hedlund and Nelson Minar, had a number of Fortune 500 customers for their software -- which exploited the unused processing power of PCs on a network -- but were unable to close the venture capital needed to continue.

The company had raised about $1.6 million in angel funding, including $200,000 from O'Reilly & Associates, publishers of this site. "We spent about a year on the venture path," said Hedlund, the company's chairman and CEO. "We received a number of term sheets but never closed a round. In addition, as the market has gotten tighter, it's been harder to raise angel funding."

Distributing computing is a highly competitive part of the P2P space -- the openp2p.com P2P directory lists some 13 companies and projects. "There's just a high degree of conservatism right now," said Hedlund, "maybe more conservative that it should be. And when a couple of competitors were able to get funded early, it made it harder for us.

"We wish we could be out there competing on features and quality rather than on who got funded at the casino."

In addition to a non-profit project to help researchers develop influenza vaccines, Popular Power counted several Fortune 500 companies among their paying customers, including BEA Systems, which used the software to loadtest a server product, and "one of the top three pharmaceutical companies using us for drug designs," according to Hedlund. "They thought our product was significantly better than other solutions they had seen." The company had several other seed and beta sites, as well.

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So does this company's failure herald a crash in the distributed computing space? Hedlund says no. "People are extremely interested in distributed computing. The only thing that was of concern was running jobs on the public Internet; they weren't interested in that. The enterprise market is extremely interested in distributed computing, and we still believe distributed computing is the future of computing."

For pharmaceutical and biotech companies, the Human Genome Project has created a huge dataset they needs to be processed. These companies are devoting 10% of their total R&D budgets this year and for the next two to three years to new computing power to process human genome data, according to Hedlund. At the same time, the economy is turning down and they need to compete more aggressively. "They're asking, how can we save money, how can we tighten our belts? With distributed computing, they can do as much or more than they did before with machines they already own; the only cost is the software."

What's next? The company will continue to run the non-profit projects "for as long as we are able," according to the company's website, and Hedlund and Minar are looking for a buyer for their software. As for Hedlund himself, he says, "I learned a lot but I didn't learn to stay away so I'll probably do something similar."

Richard Koman is a freelancer writer and editor based in Sonoma County, California. He works on SiliconValleyWatcher, ZDNet blogs, and is a regular contributor to the O'Reilly Network.

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