Hailstorm Initiative to Expand IM

Microsoft Corp. is working on an instant messaging initiative, code-named Hailstorm

Microsoft Corp. is working on an instant messaging initiative, code-named Hailstorm, that ties into its .Net strategy to have computers, devices and services collaborate directly with one another, a source close to the company said last week.

In addition to IM, Hailstorm will operate as a development platform that enables users to do Web-based e-mail, real-time stock quotes and calendar functions.

Microsoft, of Redmond, Wash., plans to introduce Hailstorm next month to developers of applications and Web services as well as to content providers.

A spokeswoman for Microsoft said the company doesnt comment on code names or unannounced products but didnt deny the existence of Hailstorm.

Industry professionals and analysts said they believe Microsoft is seizing a ripe market opportunity, but it is not the first company to do so.

Lotus Development Corp. and Jabber.com Inc. are already moving in this IM-as-a-platform direction.

Lotus will release this quarter a hosted and integrated platform to provide instant messaging based on Lotus Sametime as well as e-meetings and virtual workspace capabilities based on Lotus QuickPlace. The Cambridge, Mass., company is now pilot testing Lotus Collaboration Services with select customers.

Last month, Lotus released Sametime 2.0, which features interactive audio and video conferencing over IP and the ability to broadcast audio, video, and data presentations on a corporate network and the Internet.

Jabber.com, of Denver, will release next month Commercial Server 2.0, an open-source IM platform that uses Extensible Markup Language technology and a distributed client-server architecture to give companies control over their IM services, applications, branding and presence management.

"The [Microsoft IM] application is a launch point," said Mitchell Shapiro, a startup strategy consultant for StreetScience Inc., of Morgan Hill, Calif. "Theres no reason not to extend its capabilities because its a permanent thing on the machine."

Others said they believe Microsoft is searching for a way to turn its IM user base into a revenue stream and attract new users.

"No one has figured out how to make money on IM," said David McNett, a software engineer at United Devices, an Austin, Texas, company that aggregates computing, storage and bandwidth resources on the Internet and corporate intranets. "This is a shotgun approach to stumble upon a magic mixture of services for an IM client to make money either through a premium service or affinity programs."