Traditionally, multi-player games have run on client-server systems. As gaming enthusiasts would know, this results in a wee bit delay in online interactions — almost imperceptible for most computer users but frustratingly slow for the gamer.

To surmount this problem, Santosh Kulkarni and his team at NICTA have toiled over a rival system, using peer-to-peer networking technology. Their system, called Badumna, uses more of the end-user’s computing and networking power to run the games, virtually eliminating that split-second lag that can take the fun out of the multi-player games.

To commercialise Badumna, NICTA floated a startup called Scalify, its eighth spin-out. This week, Scalify won ringing endorsement for its business plan with a $2 million funding from Melbourne venture capital firm Starfish Ventures.

Beyond gaming

“We always get a great reaction to our product from customers, so we’re thrilled with this opportunity to extend our reach,” said Steve Telburn, Scalify’s CEO. “NICTA has given us top-notch technological and research staff and vital support throughout the early stages of the company’s growth. Without their assistance we would not have been able to grow to a stage required to attract professional investors.”

Badumna could be a great start. Kulkarni’s team has focused on the large gaming market — estimated at $67 billion in 2010. Within gaming it has the potential to dramatically raise the number of online players a game can support, besides providing a far enhanced experience.

“The online games market is large and is growing quickly, but is hindered by the traditional client-server model which is expensive and limits scalability,” said Starfish’s Anthony Glenning, who will join the board of Scalify. “We recognised Scalify’s unique solution for peer to peer games, especially in terms of scalability and reducing traffic to the server.” Glenning founded Tonic Systems, a maker of presentation software that was acquired by Google in 2007.

Outside gaming, NICTA’s technology can be used to improve the delivery of gaming and virtual environments that are increasingly being used for online learning and training. It also can be used for telemedicine programs that involve exchanging large datasets and for bandwidth-intensive data like3D scans and x-rays.

“This is a fantastic result, demonstrating NICTA’s research strength and capacity to form new businesses that can go on to create wealth for Australia,” said NICTA Chief Executive Hugh Durrant-Whyte.

Telburn, who has previously led startups and also worked with Commercialisation Australia, said he would use the venture funding to “increase our sales and marketing capability, as well as expand the number of development platforms supported by Badumna.”

Kulkarni, who developed Badumna at NICTA’s Victoria Research Laboratory, will join Scalify as its chief technology officer. He previously worked at Telstra.