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    IM Interoperability: Its the Business Model, Stupid

    By
    Matthew Hicks
    -
    August 9, 2004
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      The tension between technology and business models is intensifying in the instant messaging market as the largest IM providers test new approaches for working together.

      So far, business is winning.

      Last month marked a turning point in the ability for users to communicate across the largest IM networks. Microsoft Inc., Yahoo Inc. and America Online Inc. forged an agreement for letting messages and presence information move between Microsofts forthcoming Office Live Communications Server 2005 and the three big networks—MSN Messenger, Yahoo Messenger and AOL Instant Messenger

      While a far cry from broad interoperability, the deal shone more light on the fact that business issues, and not technological ones, are the major bottleneck to interoperability. As part of the deal, Microsoft officials have said, the IM networks will receive a share of license revenue from the interconnection feature in LCS.

      Details of the financial arrangement remain scarce, but analysts and industry observers say the Microsoft deal could point to an IM interoperability future built more on business agreements than on any common messaging protocol.

      “Everybody wants interoperability, but everybody wants it around a business model that works for them,” said Royal Farros, chairman and CEO of messaging vendor MessageCast Inc., in Redwood City, Calif. “What the big three are trying to do is to find a way where if they open up to interoperability, they all can get paid.”

      Farros likened the emerging IM approach to the way telecommunication companies charge one another for calls as they transverse various network boundaries. The enterprise space is a fertile testing ground because, unlike the free consumer IM client, there is revenue from IM server licenses, Farros said.

      Analysts have predicted that Microsofts move with its public IM rivals will lead the top networks to forge more deals with other enterprise IM players, such as IBMs Lotus division. Lotus already links with AOL in its Instant Messaging product.

      But if the leading IM providers focus on specific business arrangements for interconnections, where will that leave the technological efforts toward a common protocol?

      In the short term, analysts say, adoption of a common protocol will be secondary to the still-developing business models, and users and vendors will be left with multiple protocols.

      AOL, MSN and Yahoo each run their services on their own proprietary protocols.

      In the server space, the vendors have split into various camps. Microsoft and IBM support different implementations of a protocol based on Session Initiation Protocol (SIP), called SIP for Instant Messaging and Presence Leveraging Extensions (SIMPLE). Meanwhile the Extensible Messaging and Presence Protocol (XMPP) became a standard through the Internet Engineering Task Force, and it is largely backed in the open-source community and through enterprise IM vendor Jabber Inc.

      For its part, Denver-based Jabber has acknowledged that XMPP is far from a single, widely adopted standard. Jabber, which competes with Microsoft and Lotus for enterprise customers, last month responded swiftly to Microsofts deal by announcing plans for a gateway between its Jabber XCP product, based on XMPP, and IBMs version of SIMPLE used in Lotus Instant Messaging.

      “XMPP, SIP and SIMPLE needed to cooperate and work together, and at the end of the day, we want to allow our customers not to make a specific protocol decision but an application decision,” said Rick Emery, vice president of business development at Jabber.

      Jabber expects to release the gateway in the fourth quarter of this year and to release additional interoperability between XMPP and SIP implementations.

      Next Page: Living in a multiprotocol world.

      Multiprotocol World


      To Stowe Boyd, president of market researcher and Weblog publisher Corante, the IM market is far from embracing a common protocol since providers have only just begun to figure out how to make money from connecting with one another.

      “Its an acknowledgement that we live in a multiprotocol world,” Boyd said. “And Jabber Inc., as opposed to the open-source group, cant win by continuously proclaiming that XMPP is better because most people dont care a hoot about protocols, but they care about whether IM helps them do what they want to do.”

      In many ways, the IM industry is in a position similar to e-mail before wide adoption of standard protocols, analysts and vendors said. The closed networks such as MCI Mail and CompuServe gave way to gateways among networks before the exchange of messages opened up completely through standards.

      “If you look historically at how e-mail evolved, you had individual deals and then at some point that was not satisfying people,” said Sara Radicati, president and CEO of The Radicati Group Inc., a research firm in Palo Alto, Calif.

      Radicati said she considers Microsofts move a short-term approach to gain early interconnections among IM networks, but she said a widely adopted standard will be necessary in the longer term.

      /zimages/4/28571.gifClick here to read more about enterprise reaction to Microsofts LCS 2005 plans.

      The federation between LCS 2005 and the three IM networks will focus on one-to-one messaging and presence information but wont allow more advanced features such as multiparty chat sessions, which a common protocol could enable, Radicati said.

      “People will start to want full, protocol-level interoperability,” she said.

      At the same time, the number of major enterprise IM platform vendors is narrowing after Yahoo and AOL conceded the space to software companies, Boyd said. In June, Yahoo stopped offering its separate enterprise IM service, called Yahoo Business Messenger, while AOL dropped its AIM Enterprise Gateway product.

      Both companies instead have been touting their partnerships with IM gateway server vendors such as IMlogic Inc., FaceTime Communications Inc. and Akonix Systems Inc., which add monitoring and management tools to the public networks.

      /zimages/4/28571.gifClick here to read about how the retreat of AOL and Yahoo could open doors for others.

      Their decision to leave the enterprise market signaled a shift in focus for the large IM networks and helped set up a scenario for greater cooperation with enterprise software companies such as Microsoft, Boyd said.

      “The business issue was formerly strategic, and that was because they wanted control of their brand and their market in enterprise space,” Boyd said. “But now theyve rethought it. … Now, theyre thinking tactically.”

      /zimages/4/28571.gifCheck out eWEEK.coms Messaging & Collaboration Center at http://messaging.eweek.com for more on IM and other collaboration technologies.

      /zimages/4/77042.gif

      Be sure to add our eWEEK.com messaging and collaboration news feed to your RSS newsreader or My Yahoo page

      Avatar
      Matthew Hicks
      As an online reporter for eWEEK.com, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for eWEEK.com. Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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