A couple of years ago, Sprint's information services department was thinking about blocking streams of instant messages that were punching holes in its corporate firewall and causing headaches for PC technicians.
Until some of the telecom giant's top executives intervened. "A number of execs and upper management were using AOL Instant Messenger. They viewed it as a tool to communicate with peers, board members and to communicate with one another because e-mail was too slow," said Doug Utley, who was on the information services team at the time and is now product manager for Sprint's Web services conferencing unit. "When that started happening, it became more acceptable."
To Sprint and many other companies, instant messaging has evolved from a teenage fad to a valuable communications tool that is central to everyday business. Companies are using IM not only to send real-time messages, but also to collaborate on projects, exchange data and create networks linking all types of Internet devices.
Many companies that once resisted IM for security and other reasons are now embracing the technology. This has created new business opportunities for major companies that range from Internet services such as America Online, Microsoft's MSN and Yahoo to established enterprise software giants such as IBM, Sun Microsystems and Oracle.
Joining that list is a cottage industry of smaller companies that provide additional services along the food chain, such as IMLogic, FaceTime, Jabber and Bantu.
"The sea change is that enterprises are realising that this is actually a productivity tool, a real-time business and connectivity tool," Forrester Research analyst Charles Golvin said. "The mind shift is instead of trying to block this, let's take advantage of it to make us more nimble and responsive."
IM's corporate potential rests largely on the shoulders of the software's three largest developers: AOL, Microsoft and Yahoo. All three companies operate proprietary networks and will resist interoperability until they can work out suitable business arrangements to communicate with one another.
Microsoft is approaching IM from two opposite directions: Its MSN Messenger remains a free IM service like AOL and Yahoo, but its server group has just launched a trial version of Greenwich, a real-time collaboration service whose cornerstone is IM. Greenwich will become a component of Microsoft's XP server push, burrowing IM more deeply into the corporate network.
The tail wags the dog
Unlike communications tools widely used in business such as e-mail and the telephone, IM is unique because it was never controlled by the enterprise. It flourished in the workplace just as it did in the public Internet as employees downloaded and used the software on their own.
In 2002, 84 percent of enterprises had some form of IM software operating within their networks, according to Osterman Research. That percentage is expected to rise to 91 percent this year, the study said, and virtually all corporations will have clients operating by 2007. Most of these products will be used without the sanction of corporate information technology departments.
Employees at all levels cite many reasons that the software is well-suited for the workplace. For example, one always knows if a contact is online, at lunch or reachable on a different phone number listed on his or her status message. And IM has the immediacy of a phone call without any obligation to make small talk, saving time and therefore money.
Of course, as with anything new, not everyone is completely comfortable with the technology. Many companies, especially in regulated industries such as finance and health care, continue to restrict IM usage, fearing security gaps, compliance breaches and loss of productivity from nonbusiness communication. Still others are simply trying to figure out what to do with the technology.
As a result, what started as grassroots adoption of free IM software from AOL, MSN and Yahoo has forced corporate IT departments to rethink their policies to accommodate the popular tool.
Industry veterans often compare IM to the early days of e-mail, when businesses ran proprietary software for internal communication and ignored calls to operate with technologies from other companies for competitive and security-related reasons.
The financial sector in particular has been conflicted in its view of IM. Companies have cracked down on IM use, fearing that employees were violating federal compliance rules requiring them to log and archive communications with clients.
At the same time, IM has increasingly become an indispensable tool for the industry, helping people make quicker real-time investment decisions. In October, a group of the largest banks--including Credit Suisse First Boston, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS Warburg, Deutsche Bank and J.P. Morgan Chase--established a group called the Financial Services Instant Messaging Association to encourage leading public IM providers to adopt industry standards for interoperability.
Technology companies are not waiting for the standards issue to be settled before developing products for the enterprise market. A week before the banks formed their organisation, Yahoo disclosed plans to launch an enterprise version of its Yahoo Messenger product, expected this quarter. Roughly one month later, AOL and MSN announced their own plans for corporate instant messaging.
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