The last 12 months have seen sweeping changes filtering through the world of instant messaging, with a tightened focus on enterprise-class services and a number of new products entering the field. Now, industry insiders predict a number of new developments in the IM arena -- all of which have major implications for vendors, IT managers, marketers, and ultimately, end users.
First up: interoperability. A number of folks see compatibility coming down the pipe for the many currently closed messaging and presence systems. That's expected to contribute to industry growth, as buyers seek to tap into a business-class system for more than just internal communications.
Some feel that compatible systems will gain traction in the market only after IT staffs have spent much of the year simply coming to terms with IM in the workplace. Then, they can get to work on weighing their businesses' needs, which will then contribute to pressure on vendors to deliver interoperability.
"Initially, all will hope for an 'enterprise standard,' but realize this is not possible yet, and will spend time/money just getting IM under control," said FaceTime Communications Chief Executive Glen Vondrick. "There will be a continued emphasis/push by users to see interoperability measures taking place, with technology standards and gateways from EIM systems to support the public networks."
Whether America Online, Microsoft and Yahoo! themselves will take part in that trend, however, remains up in the air. With all three in the process of fielding enterprise IM products that offer tools to manage employees' use of free, public IM, some expect that the networks won't be able to shun compatibility for long.
"At least one of today's big three IM providers ... will join forces with other service providers and carriers to support open interoperability of IM and presence," said Rob Balgley, chief executive of Jabber, Inc.
Still, others anticipate the public networks' commitment to interoperability remaining below enterprises' level of need.
"While consumer instant messaging is all about 'community,' enterprise instant messaging is all about integration," said Jeremy Dies, senior offerings manager for presence and IM at IBM's Lotus Software. "The proliferation of SIP/SIMPLE will guarantee that enterprises can connect IM communities securely and privately, and will permanently limit the three major consumer networks to their intended purpose: letting consumers chat with each other."
Yahoo!, at least, agrees that the matter will come to a head in coming months, as it and rivals market their new offerings.
"We expect that this move from 'for free' to 'for fee' will drive some big open issues, such as interoperability and protocol standardization," said Ken Hickman, director of product strategy at Yahoo! Enterprise Solutions.
Application Integration as Industry Driver
In addition to the ability to link to external messaging systems, many also predict business-class instant messaging and presence offerings becoming increasingly tied into other enterprise applications.
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Bruce Stewart, senior vice president at AOL Strategic Business Solutions, said he expects to see growth in IM-based applications "that seek to marry the notion of online presence with mainstream productivity and entertainment-based applications."
If correct, that spells good news not only for giants like Lotus, but for smaller players in the space, like PresenceWorks and Zion Software, which market products to embed presence in other apps.
"The true value of instant messaging in the enterprise is how it becomes a core component of enterprise applications," said Dies. "In 2003, we will see the first workflow applications that leverage presence awareness and even more applications that will react in some way to online awareness. In this world, security and ease of integration are the most important customer criteria."
Added Jabber's Balgley, "the ability to easily customize EIM as well as integrate and extend it into other applications and processes will become critical buying criteria ... EIM will increasingly become the backbone of a new generation of communication networks."
FaceTime's Vondrick said he expects most EIM vendors to feel pressure to provide APIs to extend messaging and presence-detection, in response to demand by users of workflow applications.
"Independent Software Vendors such as Siebel, PeopleSoft, et al. will look to integrate IM into their offerings and look to OEM this capability," he added.
Vondrick said that despite the hype, Microsoft won't be much of a player in the coming year with its Real-Time Communications technology, the software giant's much-discussed, OS-level, standards-compliant bid to dominate the IP-based communications space, including IM, multimedia messaging, VoIP, and application-sharing.
Into 2004, however, the offering will help cement the position of Microsoft, alongside Lotus, as a hub around which most new enterprise messaging products are be built, according to Vondrick. That, in turn, spells trouble for smaller, independent IM vendors.
"RTC will be too late to impact any major adoption in 2003, but will likely stall some purchasing decisions as users wait to get their hands on it for comparison to competing systems," he said. "IM will end up being a core component of system software such as Windows, but will face resistance until interoperability with other leading networks occurs. This ... will cause the smaller EIM players problems."
Industry Consolidation, Bigger Budgets
A number of insiders also said they see consolidation among smaller vendors, through mergers -- among rivals, and providers whose products are seen as better add-ons for workgroup software offerings -- as well as more inelegant exit strategies for those failing to embrace interoperability, or unable to compete against the marketing clout of the public networks' EIM offerings.
Few expect to see massive interest in IM from new segments of enterprise clients. Instead, investment by the usual suspects, such as financial services companies and other regulated fields, will continue to lead the industry's development.
But while security and management issues have been the initial drivers of industry growth thus far, Vayusphere CEO Pushpendra Mohta said he sees corporations in the coming year viewing IM not as something that needs reigning in, but instead a way to improve business.
"2003 is the year when corporate IM finally captures the attention of the CIO," he said. "CIOs will look for business ROI, and that will come from incorporation of presence awareness into enterprise workflow, and application integration with IM."
To that end, a number of insiders also said they see businesses actually preparing formal budgets for enterprise IM deployment.
"Enterprises will be preparing, if they haven't already, formal budgets for EIM; to date, EIM purchases have primarily been ad hoc," said Jabber's Balgley. "Enterprise buying motivation will move beyond the more obvious issues of security, etc., [which are] related to consumer-based IM, to more meaningful issues, such as strategic utilization of EIM."
Toward a Wireless Future
One of those strategic uses of messaging is likely to be in the wireless arena, some said -- a prediction that could help mobile application vendors finally make good on a years-old, dot-com-era vision of omnipresent connectivity.
"In 2002, we saw significant penetration of messaging into wireless that should increase in 2003," said ActiveBuddy Chief Technology Officer Timothy Kay. "Messaging is proving to deliver a better user experience on wireless devices than do wireless implementations of the Web."
One reason for the increase is that devices and networks are finally becoming ripe for richer applications, which a number of insiders said could serve as a major driver of interest in enterprise IM.
"We are seeing demand for wireless IM clients now after having had wireless clients in our IM product for the past two years," said Vayusphere Product Manager Gaurav Marwaha. "The demand for wireless clients reflects the more mainstream use of wireless devices in the enterprise, due to the maturity of wireless PDAs and last year's widespread deployment of private (802.11) and public wireless networks (GPRS, CDMA1x)."
Many said wireless's increasing importance in the enterprise will serve as another driver for EIM compatibility with other systems. Mobile marketing efforts, too, are poised to see heightened interest through this trend.
That's especially true especially as wireless carriers continue efforts to promote consumer and business use of non-voice offerings, like Short Message Service.
"In the wake of the 'coming of age' of the mobile medium, we will see SMS moving from a tactical marketing tool to a strategic marketing channel," said Lars Becker, chief executive of U.K. mobile marketing shop Flytxt, adding that he sees mobile interactive services reaching new industries -- like financial services, utilities, and travel -- and taking advantage of new technologies, like Multimedia Messaging Service.
"MMS will attract the most attention, once marketers see how they can use color, enhanced imaging, video clips (maybe) and audio files to recreate their branding and advertising campaigns via mobile," he said. "This activity will eventually lead to a boost in marketing activity in the mobile sector."
Some also said they see additional trends contributing to growth in business-oriented mobile messaging.
"The integration of instant messaging functionality within wireless devices will continue expand as more phones and PDAs are manufactured with IM clients embedded directly into the devices, making it even easier for consumers and enterprise users to keep in touch with contacts," said AOL's Stewart.
Greater use of wireless for messaging could have other consequences, as well. For one thing, Vayusphere's Mohta said that integration of public instant messaging networks with SMS "might be the driver that truly launches SMS in the U.S."
Will we really see progress in interoperability, wireless IM and full-blown budgeting for enterprise IM? Be sure to let us know your reactions, thoughts and predictions for 2003!
Christopher Saunders is managing editor of InstantMessagingPlanet.com.
Interested in learning more about the future of IM and mobile messaging? Join us at the Instant Messaging Planet Spring Conference and Expo, Feb. 24 and 25 in Boston. Sessions include "IM 101: Where are We Going?" and "IM and ROI: The Business Case."