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Is Instant Messaging Ready for Business?

By John McCormick



Real-time chat and buddy lists will eventually enter the workplace. But until a protocol standard is adopted, you’d be wise to hold off.

Every so often a technology comes along that gets branded as a business tool but not a consumer product, or the other way around, and then ends up being embraced by both markets. The PC is perhaps the best example of this phenomenon. Originally considered a business tool, it’s now almost as popular as TV sets.

The same thing is happening to instant messaging, but this time the technology is moving from consumers to business. Created by America Online for consumer chat rooms and buddy lists, instant messaging lets people send text messages that pop up immediately on the recipient’s screen. It also allows you to see who’s connected to a network and accepting messages. The result is that a group of people can check in with each other online and exchange messages in real time.

Business can obviously benefit from this kind of communication. But until recently, instant messaging products—called instant messengers—haven’t been part of our collaborative toolkits. Perhaps they’ve been too closely associated with AOL. But they’ve also lacked security, scalability, and the protocol standards that businesses require. Collaboration software vendors like Lotus have started to address some of these problems and integrate the technology into their product lines, but important technical issues remain to be solved.

Buddy Lists at Work?

As more consumers go online to make purchases, send sales inquiries, or otherwise communicate with businesses, they’re becoming frustrated with e-mail because it locks them into a one-way conversation that doesn’t produce immediate results. With a real-time technology like instant messaging, however, they can immediately engage in a conversation online, resolving questions and completing purchases more quickly.

Instant messagers also gives the vendor a chance to pitch other products, an opportunity currently lacking in most online transactions. And the technology can improve online customer service after the sale, too, by allowing businesses to better address complex inquiries and deal with demanding customers.

Within the workplace, instant messaging can enhance communication among team members in disparate locations. It isn’t always practical or cost-effective to use a telephone, especially for brief exchanges, such as to check a project’s status or confirm receipt of a package. E-mail and bulletin boards work, but neither is real time; e-mail users on the same server may enjoy nearly instant delivery, but messages sent outside the LAN can sometimes take several hours to arrive. For a quick exchange, instant messaging is far better suited.

Instant messengers have awareness, an ability unavailable with telephones or e-mail. Used in AOL buddy lists, awareness enables you to find out who is online, or in the case of business users, who is at their desks and available—to receive an instant message, an e-mail, or even a phone call. Consider how often you’ve repeatedly called someone only to find each time that he’s unavailable, and you’ll understand the usefulness of this feature.

Now for the Bad News

Now that you know the advantages of instant messenging, I’ll tell you the disadvantages. In the past, instant messengers have been developed strictly for home use and therefore weren’t secure or scalable. Businesses who cared about keeping their secrets and conversing among large numbers of people couldn’t just grab an off-the-shelf consumer product like AOL’s Instant Messenger. Fortunately, vendors are addressing these shortcomings. Lotus’s Sametime instant messenger, for example, offers three different levels of security and is highly scalable (see page 58 of the March/April issue for a review of Sametime 1.0).

The remaining barrier is that there isn’t a standard for interoperability among the different messengers. Even if you want to improve communication among only a small group of people now, sooner or later you’ll want to collaborate with customers, partners, and other outside contacts, and you can’t do that if everyone’s instant messengers are incompatible. Furthermore, if you choose the wrong instant messenger now, your investment might be rendered obsolete by standardization on an incompatible protocol.

The Vendors

The battle to determine a standard instant messaging protocol is underway, and it’s no surprise that Microsoft is involved. What’s unusual is that the software giant is in a position of weakness. AOL, who created instant messaging, seems to hold the strongest hand. AOL is bolstered by technology it gained from acquiring Netscape and forming an alliance with Sun Microsystems. AOL Instant Messenger has 43 million users, according to the company, by far the most of any competitor, and 10 to 20 times that of Microsoft’s MSN Messenger.

AOL is also recruiting a lot of powerful allies. The list is a who’s who of companies that have at one time or another been trampled by Microsoft:

  • Starting with perhaps the most significant, AOL has agreed to integrate its Instant Messenger with Novell’s new Novell Directory Services (NDS). AOL’s product  can benefit from the security and control offered by NDS. And Novell is sure to remain a committed ally because it has pinned its future to the performance of NDS, which lists Microsoft’s Active Directory as its biggest competitor.
  • Sun Microsystems is another obvious ally. It gained Netscape—now-AOL—technology from its alliance with AOL. And its recent skirmishes with Microsoft over Java give it good reason to side against its chosen enemy.
  • Apple has agreed to provide an instant messenger that would provide seamless communication between Mac users and the AOL Instant Messenger.
  • An agreement with Lotus ensures that Sametime 1.5 is compatible with AOL’s product. It’s worth noting, however, that Lotus has also publicly claimed that Sametime will support any accepted industry standards, presumably including one driven by Microsoft.
  • AOL has teamed with several ISPs, such as Voyager.net and Juno Online Services, adding their customers to its ever-growing installed base.

Of course, Microsoft has its own band of supporters, including most of the other instant messenger vendors, including Yahoo!, Activerse, and Tribal Voice. These companies have all tried to access and thus steal from AOL’s huge base of users, but AOL continues to break any compatibility with its Instant Messenger that other companies are able to produce. Also, Microsoft has enlisted several of AOL’s competitors in the online service provider market, including AT&T, Prodigy, and Excite@Home.

The Internet Engineering Task Force is currently working to pass a standard known as the Instant Messaging/Presence Protocol (IMPP), and Microsoft and its cohorts are pushing hard to make this happen (in a somewhat two-faced move against AOL, Lotus has been part of this effort, too). To ensure that the adopted standard is closely compatible with its own products, Microsoft has even published its MSN Messenger protocol so third parties can develop compatible instant messengers, the idea being that the more widely used a protocol, the greater the chance it will be adopted as standard.


America Online Instant Messenger

Microsoft MSN Messenger


    Juno Online Services
    Lotus (pledging Sametime compatibility with Instant Messenger)
    Sun Microsystems

    Lotus (supporting Microsoft’s push for a standard)Tribal Voice
    Prodigy Communications


  • Installed base of 43 million users
  • Strong combination of technology from many partners
  • Absolute control of access to AOL’s users
  • Microsoft’s ability to influence standards
  • The ability to match the AOL side’s technology arsenal
  • Microsoft’s winning record in standards fights

What’s Available?

Early in September, AOL announced a partnership with FaceTime Communi-cation, which is using Instant Messenger technology to develop an interface that allows companies to use instant messaging for online customer service. Soon also to appear in forthcoming business products will be MSN Messenger, which is already integrated with Microsoft’s other communication tools, including Outlook Express, NetMeeting, and Hotmail. In addition, Microsoft plans to make its instant messenger client available on handheld devices, allowing such miniature PCs with Internet access to function as a two-way pager.

So far, however, the most complete business-focused instant messaging product is Sametime from Lotus. Sametime includes not only instant messaging and awareness, but an electronic whiteboard, where conference participants can see each others’ marks on a white screen, and application sharing, where participants can see and even control applications being run on other machines. Sametime 1.5, which was released in late July, added several key features, including interoperability with the AOL Instant Messenger, an improved development toolkit for creating instant messenger applications, message encryption, and real-time monitoring of online users and message delivery.

For Domino users, Sametime offers special advantages in that it can be integrated with Domino mail, allowing users to respond to e-mail with instant messages. Sametime also uses a Domino directory structure, sparing administrators from having to maintain a separate directory.

Sametime server pricing starts at $5,000, retail. Sametime client access licenses start at $20 per user.

Good Things Come to Those Who Wait

It’s surprising that instant messengers have taken so long to find their way into businesses. Being able to exchange text messages in real time and knowing when someone is at his desk are obvious advantages. Add the electronic whiteboard and application sharing available with Sametime, and you have a truly compelling product for team collaboration, customer relationship management, and e-commerce.

As with other emerging technologies, however, current instant messengers are a long way from being trouble-free. Security and scalability have been addressed, but it’s too soon to guess who’s going to win the standards battle. Normally, I’d say that it’s whatever side Microsoft is on, but in this case Redmond may have met its match. AOL Instant Messenger has strong allies and 43 million users. But Lotus is straddling the fence and Microsoft is not to be underestimated. Fortunately, with all the pressure being applied to the Internet Engineering Task Force, we can expect a standards recommendation before the end of the century.

JOHN McCORMICK is the software and Internet research manager for SECTORBASE.com, a San Francisco-based Internet company that provides stock market information to financial analysts. E-mail: jmccormick@SECTORBASE.COM.

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