At brokerage Terra Nova Trading L.L.C., its now official: Instant messaging, once banned as a threat to security and productivity, has not only been blessed by IT, it is becoming as critical to communications as e-mail.
Sure, brokers still scream orders at one another the old-fashioned way. But under the din, traders, customer service agents and sales staff now instant-message one another, letting colleagues know when an important customer is on hold or a server goes down.
What precipitated the change of heart at Terra Nova? The availability of an enterprise-class IM platform from WiredRed Software Corp. that, unlike widely used consumer-oriented services, provides security and manageability to satisfy not only IT but also the Securities and Exchange Commission, said Kevin Ott, vice president of technology at Terra Nova, in Chicago.
“The speed at which we can transmit the information thats moving through here is very important because seconds make a difference in trading,” Ott said. “It gets really loud on the trading floor, and e-mails get lost. Using a nonconsumer platform allowed us to manage IM our way.”
While corporate attitudes toward IM continue to vary, growing numbers of enterprises—even in security-conscious industries such as financial services—are beginning to embrace IM platforms designed for enterprise deployment. Earlier this year, seven large financial services companies started the Financial Services Instant Messaging Association to push IM providers to adopt interoperability standards.
IT managers who are deploying enterprise IM admit that issues such as interoperability among enterprise IM platforms have yet to be ironed out. And even IM converts such as Ott say the jurys still out on whether IM increases productivity. Still, they say, theres one compelling argument for deploying enterprise IM products: Theyre much more secure and manageable than their consumer-oriented counterparts, which, like it or not, employees will use if not given an alternative.
According to a recent survey by IT research company Osterman Research Inc., of Black Diamond, Wash., consumer IM platforms, which open ports in firewalls that could introduce viruses and other security risks to a corporate network, are being widely used either officially or unofficially in organizations. The research company also found that 42 percent of enterprises use IM for business applications.
“The majority of IM [use] is unofficial and on consumer platforms,” said Michael Osterman, president of Osterman Research. “While thats OK for communications between friends, it does not suffice in the enterprise. Security, auditing and logging functions, as well as directory integration are the three things organizations serious about IM need in an enterprise-grade platform.”
Enterprise-class IM offerings typically differ from their consumer- oriented counterparts with the addition of services that allow IT administrators to manage IM accounts. These products enable logging of messages and scanning of content as well as user authentication and management. Encryption using Secure Sockets Layer is also standard in most enterprise IM products. (For a technical analysis on these capabilities, see Tools Help Make IM Ready for Enterprise.)
In addition to those standard features, some enterprise IM products will authenticate users by tapping into the corporate directory, thereby enforcing company-standard naming conventions. And some enterprise IM vendors have committed to supporting standards needed for interoperability among IM platforms.
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Enterprise platforms for IM are nothing new. While many companies were banning the technology a few years ago, some enterprises took the initiative and standardized on the Sametime platform from IBMs Lotus Software division. Sametime allows secure IM among users associated with the same Domino server directory. Other enterprises deployed products from vendors such as OmniPod Inc. and WiredRed Software Inc. that allow for encrypted IM behind firewalls and directory integration. (See review of the WiredRed E/pop server.)
Until recently, deployments of such products have been relatively rare. WiredRed, for example, claims 3,500 corporate installations. In comparison, America Online Inc.s consumer-oriented AIM (AOL Instant Messenger) service claims 180 million registered users.
However, the enterprise IM market is likely to heat up soon, say experts, thanks in part to new offerings from heavyweight vendors such as AOL, Yahoo Inc. and Microsoft Corp. AOL, of Dulles, Va., released an enterprise version of its popular consumer AIM client called Enterprise AIM Services this fall. Yahoo, of Sunnyvale, Calif., has announced plans to release Yahoo Messenger Enterprise Edition, which will integrate with database, directory and operating system products from Novell Inc., Sun Microsystems Inc. and Oracle Corp. The Yahoo product is slated to ship in the first quarter of next year.
Perhaps the biggest play for the enterprise IM market will come from Microsoft, of Redmond, Wash., experts say. The company has announced plans to make MSN Messenger Connect, an IM service oriented toward enterprise users, available in the first half of next year. Initially targeted at financial services companies, MSN Messenger Connect will be followed by Microsofts planned release of a real-time communications server, code-named Greenwich, that will include IM and conferencing capabilities and links to Exchange e-mail.
One company that is jumping on the Greenwich platform to launch enterprise IM—after two years spent investigating the concept—is Reuters Group plc.
Reuters, which disseminates information to financial institutions and the media, began looking into the enterprise potential of IM because it wanted to compete with an e-mail-based messaging product released by archrival Bloomberg L.P., of New York. The Bloomberg product allows users of its proprietary terminals and network to exchange messages with one another.
In search of a way to respond, Lewis Knopf, managing director of collaboration services for Reuters, in New York, became interested in IM initially because of its ability to notify a sender of the recipients presence.
At the time, however, most IM platforms lacked the enterprise features Knopf needed.
“A few years ago, looking at the consumer space, we got the potential power of IM but couldnt do anything because were in an industry that requires things like security, auditing and logging,” Knopf said.
The companys foray into IM started in April 2001, when Knopf launched a pilot using the Exchange 2000 Instant Messaging Service features built into Microsoft Exchange Server 2000 to determine whether employees would use the technology. Knopf got his answer quickly. He advertised the capability once and let employees figure out how to use the technology on their own. Within two months, 15,000 Reuters employees worldwide were using IM for everything from providing answers on fixed-income products to customer service agents to communicating internally during sales meetings.
The success of the pilot pushed Knopf to ask Microsoft to add enterprise elements, including auditing and security, to its consumer IM platform. But Knopf also wanted a solution that was based on standards, which would allow customers using the Reuters messaging platform to communicate with IM users on products from different vendors. The software company invited Reuters to participate as an early adopter of its Greenwich software, which is based on the SIMPLE (SIP for IM and Presence Leveraging Extensions) proposed interoperability standard. Greenwich is tied to Reuters Active Directory for user authentication and identification.
After deploying Greenwich companywide earlier this year, Reuters decided to partner with Microsoft to use Greenwich to develop the Reuters Messaging Platform, incorporating the security, auditing and logging elements the financial industry required. Reuters made the platform available to the financial services industry free of charge Oct. 14 and subsequently migrated all its employees worldwide to it.
Reuters provides logging as part of its free service and allows keyword searching of archived messages. IT managers from companies with employees using the platform can get additional auditing and searching capabilities from Reuters partners FaceTime Communications Inc. and IMlogic Inc.
Today, Reuters Messaging Platform has 75,000 registered users in more than 3,500 financial services companies in more than 100 countries. Because both Microsoft and IBM are backing the SIMPLE standard, Knopf said he has had discussions with IBM about opening a gateway between Reuters Messaging and Lotus Sametime. This could vastly increase the number of users on the Reuters messaging network.
“We are in an industry where interoperability is absolutely key, and our view is this industry needs to be pushed into multinetwork access,” Knopf said. “Ultimately, it shouldnt matter what system people have, and we think the world has to converge on a messaging standard and leave the platform up to the individual companies.”
Indeed, the question on the minds of many IT managers is the future interoperability among enterprise-class platforms. Currently, a user on the AIM platform, for example, cannot communicate with a user on Yahoos client because they use different messaging protocols. Experts say that while it may not make sense for IM providers to make their consumer platforms interoperable, there is incentive for them to do so with their enterprise IM platforms.
In the enterprise, said analyst Osterman, “you need interoperability in order to communicate with partners and suppliers. These vendors understand that.”
Well, at least most do. Although Microsoft and IBM continue to support SIMPLE, AOL recently pulled its support for the proposed standard.
That wont stop enterprises such as Reuters and Terra Nova from pushing for interoperability among enterprise IM platforms. Ultimately, such companies will want to instant-message partners and suppliers—and applications—using different messaging platforms.
Financial services companies such as Reuters and Terra Nova are required by the SEC to enforce rules for how IM is to be used and what can be transmitted. Without common message management among enterprise systems, enterprises will be required to develop and enforce increasingly strict policies for the use of IM.
At Terra Nova, for example, trade orders cannot be taken using IM. Ott also continues to ban consumer-based IM platforms, does not allow files to be transmitted over IM platforms, and audits and logs instant messages rigorously.What Terra Nova has not banned, however, is use of IM for real-time communication among employees. Even there, Ott is continuing to evaluate the bottom-line benefits.
“Weve certainly seen an increase in the usage of IM, but increased productivity is certainly to be debated,” Ott said. “If it goes the way of e-mail, well need additional policies to ensure productivity doesnt drop significantly around here.”
Senior Writer Anne Chen can be reached at anne_chen@ziffdavis.com.
