Announcement posted at 8:00 EST on 14 January 2008 – The Tubes service will be going away as of Jan 31, 2008.

Any data/files you have on your computer will not be lost.  However, the ability to synchronize your data/files will go away. All support services have been discontinued.  Automated Knowledge Base articles may remain available and you may find some help at www.tubesnow.com/forums.  However, you will not be receiving a response from Tubes to submitted requests.

Thank you for participating in our beta program.  The Tubes Team

Mark over at Mashable has some thoughts on why the service didn’t make it. When I met with VP Marketing of Tubes, Steve Chazin at a Starbucks in Manhattan last August, he was so excited about the new release. I thought the software was very smooth. My big concern that I raised to him was that his target was mainstream but I wasn’t sure if the mainstream crowd would "get it" — he kept talking about using this to share photos with my mother, I doubted that would ever happen.

I would love to see instant messenger integration in the future instead of having to setup your friends yet again. The way they split the files reminds me of the old days and grabbing Usenet files. They are hiring — if you are in Zurich, they want to talk to you. Update: Wuala sent over the following update: "We currently have Skype and Facebook integration, which means that you can add/invite your friends easily from Skype and Facebook (plus other messengers are in development)"

Founder and CEO Dominik Grolimund attended the Web 2.0 conference in San Francisco this past week and took a few minutes to chat with me about Wuala. Our discussion is below.

Allen: Can you provide us with a brief bio about yourself?

Dominik: I am 27 years old and have studied computer science at ETH Zurich. In 1998, I founded my software company Caleido, and developed the Caleido Address-Book, a professional contact management software, of which over 35,000 licenses have been sold to-date in Switzerland, Germany and Austria.

In 2003, I did an exchange semester at the TU Delft, the Netherlands, as part of the Unitech exchange program, focusing on business and management. In 2004, a six-month internship followed with Siemens Corporate Research in Princeton, New Jersey in the US, where I worked in the "Intelligent Vision & Reasoning" department, developing a product for power plant monitoring.

After returning from the US, I started the project Wuala (code-named ‘Kangoo’), together with Luzius Meisser, as part of my computer science Master studies at the Swiss Federal Institute of Technology Zurich (ETH Zurich, Switzerland) in 2004. We founded our company Caleido in 2007 and now, after these three years, we are ready to show a sneak preview of Wuala to the first people.

Allen: What is Wuala and where did the name come from?

Dominik: Wuala is a new way of storing, sharing, and publishing files on the internet. Unlike traditional online storage systems, Wuala is decentralized and can harness idle resources of participating computers to build a large, secure, and reliable online storage. This enables its users to trade parts of their local storage for online storage and it allows us to provide a better service for free.

You can find more here: http://wua.la/en/what.html.

The name comes from the french word "voilà" which means "look there". For us, it means "wuala, here’s your file".

Allen: How does the service work?

Dominik: Check out all of the service details here: http://wua.la/en/how.html.

Allen: How do I access the service — Web, Facebook, Myspace, desktop?

Dominik: It’s a desktop application. Very simple, integrated into the OS, network drive, drag & drop, upload in the background, stream, etc. There are a lot of advantages for such an application if it is on the desktop. However, we’re also working on a in-browser/web integration, so that you can access your data also through the web. There is also a Facebook integration (post a photo, etc.), and we’re also working on a Facebook app.

Allen: Can you discuss the security – if I upload files and they are stored on another person’s computer, can they access my files?

Dominik: No, they can’t, not at all! Privacy is a very important issue for us. All files are encrypted on your computer, before anything is uploaded. All encryption and decryption is performed locally (again an advantage if you have software running on the client). Your password never leaves your computer, so that no one, not even we as the provider can see what files you store or share with friends. In Europe, privacy is an important issue and we think that everyone should have a place where he can store files privately. A lot of people are concerned if all their data is stored on servers of big corporations, which is why a lot of users do not use Gmail etc. In our system, everything is encrypted and is state-of-the-art encryption (see how it works).

Allen: What happens if the other user’s computer where my files are stored is offline?

Dominik: That’s where our technology comes into play. We have persistent storage, which means that you can download your files at any time, not only if the owner of a file is online. This makes us a lot different from file sharing systems, which only work for popular files. Ok, so what happens is the following: When you store a file, it is first encrypted on your computer, and then split into fragments. These fragments are then encoded into more fragments, not just using replication, but using erasure codes. Without erasure codes, it wouldn’t work, because the necessary redundancy factor would be much too high. Erasure codes, on the other hand, have the nice property that you can encode n fragments into m, and then you need only n out of these m to reconstruct the file, but it doesn’t matter which!

As an example, say there are 100 original fragments which are encoded into 500. These 500 are stored onto so called storage nodes, which are computers that are online for at least 17% of their time and are willing to trade local storage (not everybody has to, you start with 1 GB which is provided by us, which is sufficient for a lot of users). At any point of time, you only need 100 out of these 500 to reconstruct the file. If you do the math, this gives you an availability of several nines (0.9999…), however, not taking daily online patterns etc. into account. In addition to that, the first 100 encrypted fragments are also stored on our servers, which is important at the moment to bootstrap the service. However, in the long run, it will be self-supporting, but we might still save the first 100 encrypted fragments just to ensure you the availability. It gets whatever it can from the P2P network / cloud, and the remaining fragments from our servers. This means that we can save a lot of bandwidth over centralized services, and at the same time guarantee reliable storage.

Allen: What does the Wuala team look like?

Dominik: At the moment, we’re five people in the core team. Luzius Meisser, co-founder and CTO, who studied computer science at ETH Zurich and who is the best business partner you could imagine. Me, co-founder and CEO, also studied computer science at ETH Zurich. For the last three years, we researched and developed Wuala together with the help of over 20 students.

Allen: Who are your competitors? How does the service compare to Tubes, Box.net and Divshare?

Dominik: On the one hand, there are traditional server-based online storage services with all their limitations, such as X-Drive, Streamload, Box.net. Since they need to provide all resources, they’re limiting the services in one way or the other. For instance, you might get free storage, but your monthly traffic is limited to 1 GB. Or the file size is limited to 100 MB or down to only 10 MB per file. Also, the download speed is often quite poor. Because we have a hybrid model that brings the best of both worlds, there are a number of advantages coming from P2P such as no file size limit, no traffic limit, fast downloads. For most services, you have to pay a monthly subscription. Our system is free, and there is a technological reason why, so that we can provide a better service for free.

On the other hand, there are "send file semantic" services such as Rapidshare, YouSendIt, or P2P variants such as Pando or AllMyPeers. That’s more like an inbox for files, to solve the email attachment problem. Wuala offers much more than these services, because it is a real online storage. Also, the P2P variants don’t really work, at least not for private files, because BitTorrent as a distribution protocol only works for popular files that a lot of users have. If you share some photos with me, than no one else has them, so that you will end up sending them to all your friends. In our case, your file is distributed beforehand and if anyone downloads it, it can be downloaded from the cloud from multiple sources. There really are some important differences here.

Tubes for example is not very much in our space, as they focus more on collaboration. Wuala is very good for large media files, private sharing and publishing, but we do not have sophisticated collaboration mechanisms (e.g. if we edit a document at the same time), at least not at the moment.

Also, one very important issue is privacy: Wuala protects your privacy. All your files are encrypted on your computer, your password never leaves your computer, so that no one, not even we, can see what files you store or share.

And, last but not least, if you try it out, you will see that Wuala is really a very simple tool. You can drag and drop, easily define who has access to folders, etc. You can upload files in the background: Say you want to upload a 2 GB video clip. If you try to upload that on Rapidshare, it wouldn’t work because it is limited to 100 MB. But in addition, also the 100 MB upload is a pain, because it might fail and you need to leave your computer running. In Wuala, you can drag a 2 GB video clip into it and it will upload it in the background. You can shut down the computer in the mean time, once it is done, it will notifiy all your friends with whom you have shared the file.

Allen: Do you have a monetization strategy? If so, can you share some details?

Dominik: At the moment, we’re experimenting with ads in the public (World) area. Since our costs are lower, this might work. However, there are also other possible business models such as photo finishing, buying additional storage (you can trade if you want, if you don’t, you could buy some additional online storage for a really low price), or also other forms of sponsoring that we’re working on.

Allen: Are you funded?

Dominik: We’re self-funded and we’re therefore currently not looking for money. We have put our savings into Wuala and I can put the revenue from my former company, which is still running very well, into this new company.

Allen: What’s next for Wuala?

Dominik: Preparing for the beta. Better integration into the web (web access, Facebook app, …). And a lot more to come which we’re currently working on. :-)

The three distribution deals are:

• SaaS Platform - Fully Distributed Web Applications to the Desktop
• Floorplanner.com – Offline Access to Popular Home Design Web Application
• Edmunds.com – Automotive-Related Multimedia Content Distribution Platform

Mark Andressen talked about the importance of distribution at TC40 with each startup. These deals that Tubes Networks have put in place should help them to gain some mainstream momentum, especially the Edmunds community.

Tubes defines themselves as:

Tubes is a revolutionary PC+web application designed to let you create instant personal sharing networks of friends, family, classmates, colleagues, or your own devices. Tubes lets you instantly share photos, media and documents with everyone you know and have them share their stuff with you through the same tube.

The new version takes the product to a whole new level. The new version highlights are:

• TubeSites – a way to create an instant Web site from any of the files in your Tube
• HubPublisher
• Live Web Access – any file inside a Tube can now be accessed live on the Web and a specific URL is provided to give out as well

 Other notes:

• The Tube concept comes from the pneumatic tube that banks use – but with these Tubes, you can send your files to multiple people at the same time and the Tube stays current
• When a person within the Tube edits a file (say a Word doc), all of the users get the updated version immediately
• Tubes has offline access – edit a file on a plane and when you plug into a network, the files update
• Product is shipping since January, new version to launch today
• Client is Windows only currently (runs on mac parallels) and is 12mb in size
• Basic account is free, premium accounts start at $1/gig/month
• Diggnation is looking at using Tubes to push out shows to their subscribers
• I couldn't get specifics on downloads except that it's in the "six figures"
• No real competitors in the space
• A full 1.0 version launches in September 2007

I asked about their revenue model:

• Tubes is privately-funded and in business for 4 years
• They are looking at revshare video models, typical ad models, content shares with producers and PPV (the PPV is interesting, setup a Tube, charge $10, users get the show in a secure environment)

My take:

It's a very robust product from the demo. It's strong in the transfer and sync of files between large groups of people (i.e. 100, 1000, etc.). The ability to edit my Tube offline (say on a train) and then sync it is tasty. My main concern is that there are no revisions saved. So if you edit my resume and I don't save a backup outside of Tubes, your version is now the live version. While this might not be a big deal for say a music publisher who is only pushing files to their fans, for a business to use this, I believe revisions will be critical.

If you need to share files with a group, this is very well worth a try. It's miles ahead of the standard YouSendIt/Skype/AIM type file sharing.