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.

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.

Still, IBM’s product has “four distinct advantages” over Microsoft’s, according to Mahowald. Sametime has a lower overall price, includes Web conferencing, does not need an additional server and offers modular configuration, he says.

Francis deSouza, formerly Exchange instant-messaging product manager at Microsoft and now CEO of IMlogic, which sells software that overlays security and auditing tools on public instant-messaging systems, said Microsoft has had to go through “learning stages.”

“We initially thought [instant messaging] was complementary to e-mail. But Microsoft learned that [instant messaging] and presence is tied more to Office. A lot of usage scenarios involve Office,” deSouza says.

Even though enterprise instant-messaging products have been out for a number of years, businesses mostly use free consumer instant-messaging products, according to Osterman. Others, such as NetJets, a seller of partial ownership of private jets, shy away from instant messaging, blocking it at the firewall.

Having found that instant messaging was not being used for business purposes, NetJets cut its employees off. But the company plans to look at the new Microsoft product, says Bram van der Ploeg, NetJets’ CTO.

“We are highly interested in products like Greenwich that allow much more control over the instant-messaging side. We recognize the potential benefits,” van der Ploeg says.

A remaining concern NetJets has with investing in instant messaging is adding to the number of information streams its employees have to deal with, which already includes e-mail, voice mail, phone calls and the custom workflow application NetJets uses, van der Ploeg says. “You add it all up, and it becomes a rather confusing set of unmanaged priorities.”

At Weil, Gotshal & Manges, instant messaging has helped employees communicate more effectively and feel closer to one another despite the miles between them. Still, this is an evolutionary rather than revolutionary change, says Randy Burkart, director of technology programs at the firm.

Office Live Communications Server will quickly establish a broad user base. Exchange 2000 instant-messaging users who bought upgrade rights will get the product at no extra charge.

Also, loyal Microsoft customers who already use Active Directory, SQL Server and Windows Server 2003 and those who plan to use Office 2003 likely will take the bait, analysts say.

With its large installed base, Microsoft might be the spark plug for enterprise instant-messaging adoption, analysts say.

“Organizations that are fully engaged in the Microsoft environment have been waiting for Microsoft to get into the [instant-messaging] and collaboration game,” Gartner’s Caplan Grey says.

IDC’s Mahowald agrees but pointed out that only somewhat cutting-edge corporations will be able to adopt it at first.

“Office Live Communications Server is definitely not for everybody. You have to do some fairly significant upgrades in order to use this thing out of the gate,” Mahowald says.

Evers is a correspondent with the IDG News Service’s San Francisco bureau.