AOL Scraps Enterprise IM

Just days after Yahoo pulled the plug on the enterprise version of its free instant-messaging client, AOL plans to announce that it is halting sales of its own enterprise IM offering.

Just a few days after Yahoo Inc. pulled the plug on the enterprise version of its free instant-messaging client, America Online Inc. will announce today that its halting sales of its two-year-old enterprise offering, AIM Enterprise Gateway.

AOL officials said the company will continue to invest in services to help users of its free AIM client use instant messaging as a business tool. For example, AOL earlier this month announced it had teamed up with voice conferencing company LightBridge Inc. and Web meeting vendor WebEx Communications Inc. to enable AIM users to launch Web meetings or conference calls off their buddy lists.

"We are not pulling out of the enterprise space—we see a lot of growth in the workplace," said Brian Curry, senior director for AIM network services. "The enterprise IM market is probably one of the fastest growing segments of IM usage."

As for existing AIM Enterprise Gateway customers, Curry said AOL will migrate those users to IMlogic Inc.s IM management software. IMlogic will provide licenses for its IM Manager tool, designed to help businesses monitor IM traffic to enforce corporate policies and protect against security threats, and its IM Linkage platform, which allows companies to integrate presence and IM capabilities of both public and enterprise IM networks into their business applications.

AOL, of Dulles, Va., has been working with Waltham, Mass.-based IMlogic since June of 2003.

/zimages/3/28571.gifClick here to read more about IMlogics enterprise messaging products.

Analysts say AOL and Yahoo, both consumer-focused companies, had trouble competing in the enterprise space against such heavyweights as Microsoft Corp. and IBM.

"IT buyers wont make IM decisions in a vacuum: If theyre already getting software from a company like Microsoft or IBM, theyll go with them for an instant-messaging solution," said Michael Osterman, president of Osterman Research. "What AOL is doing is refocusing, instead of going head-to-head with Microsoft and Lotus."

"This was a smart decision for AOL," said Nate Root, an analyst with Forrester Research. "Theyll have more success selling directly to individuals."

Both analysts predicted that going forward, Microsoft and IBM will likely dominate the enterprise IM market, much like in the corporate e-mail space.

"It will probably come down to the usual suspects in the collaboration market, with Microsoft and IBM dominating, and companies like Oracle and Jabber challenging on the sidelines," said Root. "IM will probably become another communications layer of the larger collaboration platform, where Microsoft and IBM are largely dominant."

Microsoft spokesman Brian Holdsworth said Friday that the Redmond, Wash., company has no plans to stop selling its enterprise IM platform, Live Communications Server 2003. "We think this market is still an emerging technology," Holdsworth said. "Were really just scratching the surface."

Carl Kriger, senior product manager for IBMs Lotus instant messaging client, reaffirmed that IBM has no plans to scrap its offering, either.

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