Following years of talk about interoperability among public IM services, Microsoft Corp. and Yahoo Inc. last week said they have finally teamed up to allow users of their consumer instant messaging networks to exchange messages. But some observers say the deal is of little consequence without the participation of America Online Inc. and could also lead to greater security problems.
The agreement comes as Microsoft and Yahoo face new competition in the IM space from Google Inc. and Skype Technologies SA and from market leader AOL. Although the deal is a step toward IM interoperability, without AOL and others in the game, users still face many of the same pains in using IM as a business tool. But the prospect of its two biggest rivals working together on such a public project is likely to put serious pressure on AOL to come to the table.
"Were excited to hear about MSN and Yahoo. Those would be the No. 2 and 3 most important vendors from a financial services perspective. [But] AOL is still very much a missing piece from the puzzle," said Graham Lawlor, chairman of the New York-based Financial Instant Messaging Association, an organization of 25 large financial companies dedicated to promoting IM interoperability. Lawlor said public IM services are widely used in the financial services industry, but the complexities of managing and using multiple systems are taxing.
"Its long overdue, and AOL should join in also," said an IT executive for a large stock exchange, who asked not to be named. "Our own users have gotten used to dealing with several different IM clients ... but their lives will get easier, too, once the major IMs become interoperable."
Microsoft, of Redmond, Wash., and Yahoo, of Sunnyvale, Calif., would not say whether they plan to work with the other public IM providers, but, for the near future, it appears they will just concentrate on IM interoperability between their services.
"The complexity of a deal like this and trying to execute is such that you cant even do it with more than one partner at a time," said Blake Irving, corporate vice president of MSN Communication Services and Member Platform Group at Microsoft.
AOL would not comment on its plans, but the Dulles, Va., company has opened up its network in the enterprise IM space to players including Microsoft, Reuters Group plc., Antepo Inc., Jabber Inc., Omnipod Inc. and Parlano Inc.
Some questioned the value of Microsoft and Yahoos deal. "With the proliferation of IM clients that communicate with all networks, [such as] Trillian, the benefit of public IM network interoperability is somewhat muted," said Charlie Gautreaux, server administrator for Charlotte Pipe & Foundry Co., in Charlotte, N.C.
IM security vendors applauded Microsoft and Yahoos effort toward IM interoperability but warned that the expanded network could become a new target for hackers.
"This will catalyze the opening and interconnectivity of all these different networks and lead to increased adoption of IM, but its a double-edged sword because it will also create a large surface area to target," said Jon Sakoda, chief technology officer at IMlogic Inc., in Waltham, Mass.
Microsoft and Yahoo said security will be a major focus going forward. They plan to implement a server-to-server interoperability model based on the SIP (Session Initiation Protocol) and SIMPLE (SIP Instant Messaging and Presence Leveraging Extensions) standards.
"In SIP, we do believe that SIP/SIMPLE is the right protocol to use and were going to use that, but its never been scaled at this level," said Irving. "So we actually have to be very careful and cautious on how we roll that out and make sure that security and privacy mechanisms that were using to protect users scale as well."