Consumer IM providers set to lose out

AOL, MSN and Yahoo! will witness their power over instant messaging wane as corporate IT managers wake up to the potential of this real time communications technology, according to a senior Microsoft executive.

Growth for enterprise IM will be guided by corporate IT managers rather than the service providers themselves, said Microsoft's David Gurle, product unit manager for the software maker's Windows Real Time Communications division and part of the software giant's Greenwich initiative.

"Today, enterprises are at the mercy of many service providers," Gurle said. "That's going to change."

While AOL, Microsoft's MSN and Yahoo! have all unveiled plans to sell enterprise versions of their instant messaging services, Gurle said these efforts are mere baby steps in the face of broader issues hampering the nascent industry. In addition, IT departments will begin dictating demands that service providers such as the Big Three will need to address.

"Once enterprise IT managers start deploying [the technology] they will be in a powerful position in changing behaviour," Gurle said.

Gurle's group, which develops real time communications technology for the corporate back-end, is separate from the MSN Messenger team, which is a consumer-based service. His team is developing Greenwich, which is intended to let companies offer instant communications features including Windows Messenger, peer-to-peer voice and video conferencing, and voice over IP.

Gurle's comments, made during the Instant Messaging Planet conference in Boston, highlighted the crossroads facing instant messaging - a technology once considered a fad for teenagers but now deemed a powerful communications platform for businesses.

Instant messaging has quietly begun changing the way people interact in the workplace. Companies big and small are discovering that their employees are using instant messaging clients produced by AOL, MSN and Yahoo! to communicate in real time with business and personal contacts.

This trend has caused headaches for companies and especially their IT managers. Unlike telephones or email, instant messaging clients lack security and accountability features that technical staff need to control it.

For the Big Three, the trend has posed an opportunity to develop businesses around IM, since they can charge fees for a service that has always been free to download. All three companies have unveiled plans to sell IM versions that include security and accountability features.

However, major hurdles remain standing in the way of broader adoption, most notably the lack of interoperability among the Big Three - none of the services can communicate with any other service. A business that purchases one service risks cutting out contacts using other services. AOL has only just begun testing that kind of connection, with IBM's Lotus Sametime.

Executives from all three providers have echoed the sentiment that interoperability is crucial for enterprise IM to evolve. But although standards have been proposed, the Big Three all believe interoperability will be a business issue rather than a technical issue.

Gurle said that AOL, MSN and Yahoo! will need to be convinced that it pays to interoperate.

"The value of the connection has yet to materialise in the minds of service providers," he said in an interview after his speech.

Jim Hu writes for CNET News.com.