Microsoft seen sparking corporate IM

Riding a tide of desktop domination, Microsoft's latest foray into presence is expected to kick-start corporate adoption of instant messaging. Lateness to market, however, has analysts skeptical as to how the offering will compete against those of longtime collaboration players such as IBM.

Office Live Communications Server 2003 - code-named Greenwich and previously known as Real Time Communications Server - was released to manufacturing last week. Microsoft sees the product's delivery, slated for six to eight weeks, as a key moment in establishing instant messaging as a business tool, says Ed Simnett, lead product manager at Microsoft.

With Live Communications Server, companies will be able to run their own enterprise instant-messaging network, address security concerns related to public services, and log and manage employees' instant-messaging usage. The product is capable of determining whether a user is online and available for communication in Office applications and can extend this presence information to other applications such as custom portals.

Despite noting the significance of the product's upcoming release, analysts say Microsoft has some catching up to do. Market incumbent IBM has been selling Lotus Sametime - recently renamed Lotus Instant Messaging and Conferencing - for approximately five years.

"Sametime has been out for a number of years, giving IBM a significant leg up. I would expect to see the second version of Office Live Communications Server as a closer competitor to Sametime," says Michael Osterman, president and founder of Osterman Research.

But with Office on nearly every business user's PC, Microsoft has a considerable market advantage, says Maurene Caplan Grey, research director at Gartner. "What Live Communications Server has that nobody else has . . . is integration with Office and SharePoint," Caplan Grey says. SharePoint is Microsoft's file-sharing and team-collaboration product.

New York law firm Weil, Gotshal & Manges has 3,000 people in nine countries using instant messaging. The firm rolled out Sametime in 2001 and uses the instant-messaging and presence features in several custom applications, says Richard Lowe, associate director of client information services at the firm.

"We have integrated [instant messaging] into our portal, our own applications and other systems such as ERP software; so rather than just having [instant-messaging] conversations happening, they can happen in context," Lowe says.

Providing instant messaging in context is one of Microsoft's goals. Until now, Microsoft has struggled in finding a home for its instant-messaging product, placing it first in Exchange and then toying with making it part of Windows. The company finally settled on Office as the right place.

"The Exchange [instant-messaging] product was not really ready for prime time. Live Communications Server is a much more fully baked idea and part of a long-term road map for their collaboration products," says Robert Mahowald, a research manager at IDC.