2. Benefits

Peer-to-peer networks are very cheap to implement because more than likely the Operating System software you have installed on your computers should have the ability to share items with other computers on the network, even though the feature may be limited. Nearly all of the most popular desktop Operating Systems have this feature, including Microsoft Windows and Apple's Mac OS, as well as Unix like OSes, such as Linux and the BSDs. So the only cost will be the networking hardware (cards, wiring, hubs or switches), and the labor to configure the workstations for this type of network sharing.

3. Downsides

Even though a peer-to-peer network is very cost effective up front, there are a number of downsides you must consider before implementing this type of network.

Without a central server, it is very difficult, or nearly impossible to secure this type of network in any way. You can implement passwords on each different network share, but in order for the network to usable, the exact same username and password must be entered into each computer acting as a server. Thus, to change a password for a user could literally take hours of work, especially if the network consists of computers located in different buildings or different floors. Because of this, what usually happens with peer-to-peer networks is that passwords are implemented to begin with, but after time, either everyone starts using the same username and password, or the passwords end up becoming blank, or the network shares are configured to allow anyone access without a username or password. In any of these cases, security is pretty much non-existent, which can become a huge problem, especially if your network has access to the Internet.

On a peer-to-peer network, it is also very difficult to implement a good backup system because important documents tend to be stored on different hard disks on different computers. If you do manage to implement a good backup policy, chances are great that after a while some very important documents will not get archived because someone "accidentally" saved them to the wrong location on the network.

Peer-to-peer networks also tend to become very costly over time. Since each computer that shares anything to the other computers is a pseudo server, it must be constantly on, and configured correctly. So instead of maintaining a small handful of servers, you must maintain all of the workstations as servers, and as such any downtime with any computer on the network could cause considerable loss of labor or information. The following diagram illustrates all the theoretical connections that are needed for a peer-to-peer network to operate with just 5 computers. Note that this illustration does not represent physical network connections, but the theoretical network connections the operating system needs to operate the network properly.

The computer operators of a peer-to-peer network must also be well acquainted with the intricacies of running a computer in order for them to be able to do any work with the network. The users must be able to locate the different shares on the network, and be experienced enough to work through small problems, such as password problems or network mapping problems. As a side note, I have been in offices that used such complex drive mappings on a peer-to-peer network that they had a checklist showing which computers to turn in a certain order for the network to work properly.