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If it works, ZeoSync's system could compress files repeatedly, making the files up to 100 times smaller than the original, and without losing any data.
However academics and analysts have cast doubt on ZeoSync's claims. ZeoSync, however, promises that proof, in the form of demonstrations and products, will begin to appear soon.
If ZeoSync's claims are substantiated a revolution in storage and communication is inevitable, according to analysts and those involved in the work.
With this sort of compression video-on-demand and other high-bandwidth applications could be available over standard phone line modems and would not require broadband connections. However many observers of compression technology say seemingly too-good-to-be-true advances in the field have come and gone - unsuccessfully - before.
The details of how exactly ZeoSync's technology works are unclear. Announcing the "breakthrough", the company provided a complex explanation, saying that the technology "intentionally randomises naturally occurring patterns to form entropy-like random sequences" and then "encodes these singular-bit-variance strings within complex combinatorial series to result in massively reduced... equivalents." The technology would be included in chips, for encoding and decoding, the company said.
ZeoSync chairman and chief executive officer, Peter St George, said this simply means the company's technology takes data files and "creates multidimensional constructs" out of them.
Jim Dyer, the Arkansas director of Radical Systems, which was involved in testing and development of the project, explained that traditional compression schemes seek to remove redundancy to achieve their compression. ZeoSync's technology, however, attacks data packets as a whole, allowing them to be compressed more than once. Standard compression schemes can only compress files once.
Although ZeoSync has briefed a number of analysts about its technology, the company has not shown them enough details to substantiate its claims.
Eric Scheirer, a senior analyst at Forrester Research, who was briefed on the technology, said "all of their materials are hidden beneath a very thin layer of obfuscation."
"There's absolutely no chance that ZeoSync has accomplished what they've claimed," said Scheirer, who holds a PhD in audio compression from the Massachusetts Institute of Technology. "It's simply impossible."
David Hill, research director of storage and storage management at research firm Aberdeen Group urge ZeoSync to offer more proof: "When you claim a breakthrough that is this important the world has to look at it with scepticism" and that scepticism is only eliminated when the work is validated by other respected people in the field, he said.