BIG IM PROVIDERS MAY STRUGGLE IN ENTERPRISE

After seeding the consumer market with free software and services, the biggest instant messaging players are invading the enterprise landscape. But they may find the transition more difficult than anticipated.

Over the past two weeks, both AOL and Microsoft have announced IM products designed to go inside the enterprise. Yahoo, which combined with AOL and Microsoft owns virtually 100% of the consumer market, announced a similar product last month.

Earlier this month, AOL launched its AIM Enterprise Gateway, an IM server deployed behind a firewall that gives IT managers the ability to control corporate users' access while also allowing them to log, audit and create reports on all AIM communications. The company also will address a major stumbling block to widespread enterprise adoption by offering encryption service early next year.

MSN Connect will offer similar services, but on a more traditional server that enterprises will purchase.

However, the success that both companies have enjoyed in the consumer market may prove to be their biggest competition. A study by Osterman Research claims about 60% of businesses already use a consumer version of IM. It will be a challenge getting corporations to pay for seat licenses or subscription fees for a service that has been free. In addition, enterprises willing to pay for IM already have found other providers, most notably Lotus, which has offered secure enterprise IM for several years, said Jeff Pulver, CEO of pulver.com.

“I'm sure they'll do well, but the people that really needed it have already reached out,” he said.

However, the ability to monetize IM will give providers the incentive to interoperate, which is the key to increasing the enterprise pie for everyone, according to Glen Vondrick, CEO of Face Time, which built the engine behind both AOL's and MSN's service.

“Now they can create tariffs with each other instead of just saying ‘let's it do it for peace and free love,’” he said.

Interoperability among the various enterprise IM systems appears a long way off, though. A spokesman for AOL said the company still has the goal of making its software interoperable with other vendors but it's taking longer than anticipated.

But not everyone is buying it.

“These folks run it like the old Russia,” Pulver said. “They are totally in control of everything. They want complete domination. It's the antithesis of how the Internet was built.”