April 6, 2000 2:00 PM PDT

Instant messaging latest trend in e-commerce software

LOS ANGELES--Email just isn't good enough anymore.

Today, communications must be instant, particularly for businesses. Enter instant messaging.

IM technology, popularized by America Online's Instant Messenger and ICQ software, is a growing hit among consumers as a cheap and easy way to communicate. Now the idea is taking hold among businesses.

Software makers Novell, the Sun-Netscape Alliance, IBM subsidiary Lotus and others are building new IM software tailored for business use with new features such as increased security and audio and video capability.

E-commerce Web sites, such as Lands' End and 800.com, are using instant messaging as an alternative to phone calls and email to communicate with customers.

Analysts say business instant messaging is still in its infancy, but it's a vital tool for communication, much like pagers, cell phones and voice mail. IBM and Sun-Netscape executives said they've heard of executives negotiating contracts and company acquisitions through instant messaging.

"Instant messaging is becoming a critical technology for corporations wanting to increase collaborative efforts and improve productivity," said Giga Information Group analyst Rob Enderle. "It represents one of the strongest opportunities to apply technology in a way that makes companies more competitive."

EXP.com, an online advice Web site, is one such company. The start-up uses instant messaging software to pair consumers with third-party experts and to communicate with customers. About one-third of the site's interactions between consumers and experts takes place via instant messaging, company representatives said.

"You get to see that the other person is there. You don't see that with email or the phone," EXP.com president Mark Benning said at the Internet World conference in Los Angeles today. "It's real-time, it's immediate--you expect an answer back immediately."

Businesses have a variety of instant messaging software to choose from. Corporations that want instant messaging for their employees can simply use the free software created by AOL, Microsoft's MSN, Tribal Voice and other Net messaging firms.

But with more businesses using the technology, firms such as Lotus, Novell and the Sun-Netscape Alliance are building their own instant messaging software with security features or the ability to tie into companies' corporate networks.

John Patrick, IBM's vice president of Internet technology, said businesses are demanding more security, so software companies are encrypting the messages that go over the public Internet.

Both Lotus and Novell offer wireless text messaging and have licensed AOL's Instant Messenger protocol, so users of the software can communicate with AOL's customers. Sun-Netscape will soon build AOL's Instant Messenger technology into its family of e-commerce software.

All three companies say Puppet masters: Who controls the Nettheir software can tie directly to a company's corporate directory software--the central information database, or "yellow pages," for corporate user information.

That way, company executives can send instant messages alerting every company employee about a mandatory meeting or other news, said John Gailey, Novell's vice president of Internet services, whose company released its instant messaging software last week.

Both Lotus and Novell plan to add audio and video in future versions of the software. Lotus' software also allows businesses to hold meetings with multiple people instant messaging each other. Later this year, the company will add translation software that supports eight languages, including German and Chinese, so that a message typed in Chinese can be read by the recipient in English.

"We see it as a fundamental e-business capability," IBM's Patrick said. "On the surface, people think it's a large number of teenagers having chats, but in a business context, it facilitates more productive business dialogue. So attorneys can negotiate, and at the same time they are exchanging instant messages under the table with their partners."

But companies are using instant messaging to communicate with customers as well. Some e-commerce firms, such as EXP.com, are creating chat software from open-source messaging programs such as AOL's ICQ, while others are turning to communications software companies such as eGain, eShare and Acuity.

Microsoft said it plans to integrate instant messaging as part of its new strategy to build Internet-based software and services for businesses and consumers. Microsoft president Steve Ballmer last fall said the company plans to offer instant messaging as a technology that Web site operators can lease or license.

Online electronics store 800.com launched its "instant adviser" service in August, allowing customers to chat directly with customer service representatives. The company wants to allow consumers and small businesses with questions to get immediate answers without having to disconnect from the Internet.

Using messaging technology provided by Quintus-owned Acuity, 800.com representatives can chat with consumers, send diagrams, and record the conversation to send to customers afterward.

But customer support through instant messaging is not cheap. Although representatives can chat with up to five customers at one time, 800.com chief marketing officer Tim Zuckert said the cost of dealing with a customer over chat is about the same as communicating with them over the phone.

"There's no cost savings," Zuckert said. "(But) we saw this as an opportunity to have a better dialogue with our customers. This reduces the risk to us that customers will leave the site and not return."

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Novell Inc., Lotus, e-commerce, IM, instant messenger

 

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