Paradigm shift with new MS IM Server

Microsoft Corp.’s new Live Communications Server (LCS) 2005 could prove to be a crucial ingredient in the spread of corporate instant messaging use, some users and analysts say.

The offering, which is compatible with most popular IM systems, has corporate users and vendors eyeing new opportunities for more-secure messaging.

Taylor Collyer, director of server marketing at Microsoft, said that when used with a special connectivity pack, LCS will allow more-secure interaction with users running Yahoo Inc.’s Yahoo Messenger, America Online Inc.’s Instant Messenger and Microsoft’s MSN Messenger. Those IM communications will be enabled in secure, encrypted messages, permitting LCS users to more safely communicate with users of the popular free IM clients.

That’s important, Collyer said, because “people don’t want corporate secrets leaking out the back door.” LCS is due to ship in December. In 2005, Microsoft will release a new IM client, code-named Istanbul, that will be the preferred client for LCS. Graham Lawlor, chairman of the New York-based Financial Services Instant Messaging Association (FIMA) and program manager of IM at New York-based Deutsche Bank, a heavy user of secure enterprise IM, said the interoperability promised by LCS 2005 is a “pretty fundamental change in the industry, especially coming from a company like Microsoft.” It will allow the broad user base of the free IM community to take advantage of the “richness of enterprise IM,” which offers more security and usability than free IM clients, Lawlor said.

FIMA was created in 2002 to pressure vendors into standardizing IM software to meet compatibility, security and other business IT needs. The FIMA lineup includes Bank of America, Citigroup, Credit Suisse First Boston, Deutsche Bank, J.P. Morgan Chase & Co., Lehman Brothers Inc., Merrill Lynch & Co., Prudential Securities Inc. and UBS Warburg LLC.

Some FIMA members have been beta-testing LCS 2005, Lawlor said, and most are at least investigating the product for possible use. Mike Miller, director of support services for newspaper and television conglomerate Media General Inc. in Richmond, Va., said IM use at his company is still light; only about 100 out of some 8,000 workers use an IT-endorsed system. Those workers use the free AOL IM client, with added security, logging, management and control features provided by Waltham, Mass.-based IMlogic Inc.’s IM Manager software.

Media General has looked at enterprise IM systems, but company officials agreed that there’s no need to act until user numbers grow, Miller said. Genelle Hung, an analyst at The Radicati Group Inc. in Palo Alto, Calif., said corporate interest in IM is due, in some cases, to the technology’s “presence” feature, which enables users to see who is available and online.