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Will IM Pay?

Backers say instant messaging will revolutionize the way businesses work. They may be right.
Esther Shein, CFO Magazine
May 1, 2004

When Virgin Atlantic Airways needed to get a key part to a disabled plane in Barbados in September 2002, the carrier called on delivery specialist Sterling Courier Services. Under normal circumstances, Sterling (a division of Quick International Courier Inc.) would have no problem executing the rush job. But this was most definitely not a normal circumstance: on the day the SOS came in from Virgin, Tropical Storm Lili (later to become Hurricane Lili) was ravaging the Caribbean.

In the end, Sterling managed to make the delivery on time. But Eric Bischoff, Sterling's chief information technology officer, says the courier company had to use every communications tool at its disposal to coordinate the delivery. One of those tools: instant messaging. In fact, IM helped the company's dispatchers time the flight plan of the delivery plane so it arrived in Barbados during a lull in the storm. "In our business, we use all available services," says Bischoff. "And instant messaging is a key method of communication."

Lately, managers at a lot of companies are discovering the virtues of IM. Backers say IM, once dismissed as a plaything for the under-20 set, dramatically speeds up the flow of information in and out of a company. "You can be on a conference call with someone," says Bischoff, "and you can fill out a job ticket and ask a third party a question without ever having to hang up the phone." Experts point out that IM makes it easier for companies to communicate with suppliers. It also makes it easier for companies to communicate with managers to arrange and conduct internal meetings. Says Nate Root, a senior analyst at Forrester Research Inc.: "[With IM] you don't have time to grind everyone's workday to a halt."

IM software is only going to get more sophisticated, too. Such vendors as FaceTime Communications, IMlogic, and Akonix have already launched innovative IM management tools designed for businesses. At the same time, IM leaders AOL, Microsoft, Yahoo, and IBM are refining their enterprise offerings. All four, for example, are beginning to add archiving capabilities to their enterprise IM platforms.

Tales from the Encrypted
Nevertheless, some tech watchers believe enterprise IM is here to stay. Radicati Group, a technology market research specialist, reckons there are already 60 million business IM accounts. IM could have as many as 182 million business users by 2007, claims Ferris Research.

Many analysts believe IM will augment but not supplant electronic mail. "It will rival E-mail in terms of volume and ubiquity," grants Lou Latham, a research analyst at consultancy Gartner. "But we find that IM replaces the telephone more often than it does E-mail."

Others are finding the same thing. Financial-services personnel, for instance, are big users of the service, particularly the staff at brokerages and investment houses. The reason? IM reduces transcription errors in orders placed over the phone. "It eliminates the squawk box," explains Latham.

At online job site Monster.com, vice president of telesales Vartan Hagopian says he keeps AOL Instant Messenger open on his screen all day long. "If you get an instant message, you know someone needs you right away and you can get back to that person right away," notes Hagopian. "I still prefer face-to-face communication with people, but when I need speedy interaction, I like IM."

Some corporate departments, however, have been less than speedy in embracing IM. Finance appears to top that list. Dyan Cotton, director of finance at Foxboro, Mass.-based paper distributor International Forest Products Corp., says IM is not commonly used in her department (or by her employer, for that matter). And Cotton says she's definitely not ready to dump E-mail in favor of IM. "I'm used to saving every E-mail I've ever gotten," she explains. "I would have to figure out how to save instant messages as files and organize them by subject or person." The finance chief does believe her colleagues would use IM more often—if they thought the appropriate security measures were in place.

IM vendors hear that a lot. Dennis Karlinsky, lead product manager for real-time collaboration at Microsoft, says the company is addressing corporate concerns about security. Microsoft's corporate IM platform, Live Communications Server, allows for authentication and encryption during IM text-based sessions. It also gives users the option to turn encryption on and off for audio and video sessions and for application sharing between two people.

"When you look at the offerings in the enterprise IM space, encryption is at the top of everyone's list," notes Karlinsky. "If you don't have that, you really can't play in that space."

Plain Rude
Enterprise IM vendors say they're already seeing a change in attitudes about their products. "When E-mail first came out, there were issues about what is the proper protocol" for its usage, recalls Edmund Fish, senior vice president and general manager of desktop messaging at America Online Inc., headquartered in Dulles, Va. "Now people are asking whether they need permission to send an IM. The cultural issues have changed."

Probably so. But industry critics say IM won't truly take off at the workplace until subscribers of different services can talk to one another. Currently, the IM products of the major competing vendors do not work across different platforms.


Executives at both AOL and Microsoft say they are working on the problem. "We believe the only way at present that instant messaging can take hold in the enterprise community is if there is complete interoperability," acknowledges Karlinsky, who notes that of the two, only Microsoft now supports both the Session Initiation Protocol (SIP) and SIMPLE (SIP Instant Messaging and Presence Leveraging Extension).

At Quick International, vice president of marketing Marie Vigliarolo says employees have been waiting for the IM product they use, FirstClass, to become interoperable. Interoperability, she says, would greatly enhance communications with employees and suppliers around the world. And in fact, the most-recent release of the FirstClass E-mail groupware product (which is marketed by Open Text Corp.) does work across supported OS platforms. It also allows users to save a chat session and file it away.

Still, Vigliarolo says she doesn't use IM very often. When she does, it's to communicate internally. "I think you have to be mindful of manners," she explains. "I don't think it would be right to instant message a customer, because you're interrupting them and it can get annoying and distracting."

Civility aside, the productivity gains from instant messaging will win many converts, predicts Gartner's Latham. He believes that IM will have complete, transparent interoperability by 2006 or 2007. Such a breakthrough, when coupled with ramped-up security and more-robust archiving capabilities, will make IM "a major communications medium indefinitely within businesses," says Latham.

And as other observers point out, new technology always takes some getting used to. The first automobiles, for instance, were met with ridicule and derision ("Get a horse!").

Forrester Research's Root believes that the next generation of enterprise IM platforms will blend in seamlessly with existing messaging platforms. That way, a worker won't have to choose a channel to communicate with another user. Observes Root: "Instant messaging is just one of a whole Swiss Army knife set of tools that will be used to conduct business."

Esther Shein, based in Framingham, Mass., writes often about business technology.




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