By Jim Hu
Staff Writer, CNET News.com
March 13, 2003, 4:00AM PT
A couple of years ago, Sprint's information services department was thinking about blocking streams of instant messages that were punching holes in its corporate firewall and causing headaches for PC technicians.
Until some of the telecom giant's top executives intervened.
"A number of execs and upper management were using AOL Instant Messenger. They viewed it as a tool to communicate with peers, board members and to communicate with one another because e-mail was too slow," said Doug Utley, who was on the information services team at the time and is now product manager for Sprint's Web services conferencing unit. "When that started happening, it became more acceptable."
Many companies that once resisted IM for security and other reasons are now
"The sea change is that enterprises are realizing that this is actually a productivity tool, a real-time business and connectivity tool," Forrester Research analyst Charles Golvin said. "The mind shift is instead of trying to block this, let's take advantage of it to make us more nimble and responsive."
IM's corporate potential rests largely on the shoulders of the software's three largest developers: AOL, Microsoft and Yahoo. All three companies operate proprietary networks and will resist interoperability until they can work out suitable business arrangements to communicate with one another.
Microsoft is approaching IM from two opposite directions: Its MSN Messenger remains a free IM service like AOL and Yahoo, but its server group has just launched a
The tail wags the dog
In 2002, 84 percent of enterprises had some form of IM software operating within their networks, according to Osterman Research. That percentage is expected to rise to 91 percent this year, the study said, and virtually all corporations will have clients operating by 2007. Most of these products will be used without the sanction of corporate information technology departments.
Employees at all levels cite many reasons that the software is well-suited for the workplace. For example, one always knows if a contact is online, at lunch or reachable on a different phone number listed on his or her status message. And IM has the immediacy of a phone call without any obligation to make small talk, saving time and therefore money.
Of course, as with anything new, not everyone is completely comfortable with the technology. Many companies, especially in regulated industries such as finance and health care, continue to restrict IM usage, fearing security gaps, compliance breaches and loss of productivity from nonbusiness communication. Still others are simply trying to figure out what to do with the technology.
The financial sector in particular has been conflicted in its view of IM. Companies have
At the same time, IM has increasingly become an indispensable tool for the industry, helping people make quicker real-time investment decisions. In October, a group of the largest banks--including Credit Suisse First Boston, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS Warburg, Deutsche Bank and J.P. Morgan Chase--
Technology companies are not waiting for the standards issue to be settled before developing products for the enterprise market. A week before the banks formed their organization, Yahoo
Those numbers are dwarfed by the hundreds of millions of people using free IM systems, but these customers are far more valuable to software companies for one reason: They pay for their products. And such paying customers are typically reluctant to switch technologies after spending significant sums on systems they have been using for years.
Sun is another established enterprise player seeking to expand its IM presence. The company has long offered instant messaging as part of its Sun ONE (One Network Environment) Portal Server Suite, but last week it confirmed plans to launch a standalone
Perhaps the most anticipated entry in the corporate IM market is Microsoft's. With
David Gurle, the Microsoft executive who oversees Greenwich's development, considers MSN a separate business from his server product. But the company hopes the two will eventually communicate based on a common protocol called SIP (Session Initiation Protocol), which Microsoft and IBM's Lotus are touting.
That standard allows systems carrying multimedia traffic--video, audio and text--to operate with one another. Microsoft and IBM both consider the protocol to be the foundation for achieving the elusive goal of IM interoperability, which all parties agree will open the door for IM to flourish on both sides of the corporate firewall.
"Unless you go through this path, you will be missing the boat," Gurle said of the protocol during a recent speech at the Instant Messaging Planet conference in Boston. He added that the onus will be on the public IM providers to adopt the standard.
"Microsoft and IBM's answer to this question is to just embrace SIP and we're done," said Ken Hickman, director of product strategy for Yahoo's enterprise solutions division. "The big question is when you get interoperability, where is money going to flow and how is it going to flow?"
The companies that provide free IM services have never attempted to charge for the products for fear of mass defections to rival networks. Each has sought to build loyalty among its ranks of millions in the hope of exposing them to other areas and products on the companies' Web networks, as well as to advertising.
For this reason, AOL and Yahoo are in no rush to open their doors to each another. The lack of interoperability has not only helped AOL maintain the largest IM base in the world, but it has also
"It's something we'll be mindful of and watching," said Bruce Stewart, senior vice president of AOL Strategic Business Solutions. "It's not a top priority now to resolve and look at those issues."
If AOL, MSN and Yahoo indeed want to break the interoperability deadlock as a business issue, they will be venturing into unknown territory. The Big Three of IM have acknowledged that there needs to be a viable business reason to do so--one that can allay fears that interoperability would shrink their ranks. No one has the right answer, but at least some companies are taking a public stage to think through this dilemma.
"Pick the telco model," Yahoo's Hickman said. "When AT&T hooked up with the regional Bells to give them long-distance services, they had to come up with a business model to figure out how much money would flow between the Bells and AT&T. That's stuff that has to be figured out."
Until then, IM in the workplace will continue to be something that information technology departments will be unable to control fully. Companies may decide to buy corporate enterprise software and control it, much in the way Sprint is now using technology from start-up Bantu, but the momentum to communicate outside the firewall seems too strong to stop.
"I can't imagine having e-mail that only talks to your company," Sprint's Utley said. "That's the biggest stumbling block. It's not a tech problem--it's a business problem."
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