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Front Page > Site News & Announcements > Instant Messaging News > General / Other IM News

AOL and Yahoo! Back Away From Enterprise IM

Posted by BigBlueBall News BigBlueBall News is offline on 06-23-2004, 01:00 AM  

Jeff Hester

June 23, 2004


Less than two years after announcing instant messaging products targeted
specifically at the enterprise market, both Yahoo and AOL have announced plans
to discontinue their business-centered offerings. With their exit, this leaves
only IBM’s Lotus Sametime and Microsoft Windows Messenger to vie for the
business market.


The latest news in the enterprise instant messaging arena came when

AOL announced
that they were withdrawing their enterprise IM offering. AOL’s
withdrawal came less than one week after a
similar
announcement from Yahoo!
 


Why the turnabout? Both AOL and Yahoo! have millions of customers that use
their free instant messaging software, and many of them already use the same
version when they’re at work. The enterprise editions were designed to
capitalize on corporation’s need for enhanced security and accountability, but
carried a hefty price tag. Smaller companies less concerned about IM security
can limit or even block IM access through a corporate proxy server. Firms
wanting to allow IM use in a controlled, accountable environment also have the
option of installing third-party software such as
IMLogic to monitor or even record IM traffic.


The Real Reason

But I think the real reason they’ve pulled back out of the enterprise market is
simple economics -- they couldn’t sell the product effectively, and had to cut
their losses.


How did this happen when both AOL and Yahoo! already have a large portion of
the free instant messaging market? What they didn’t count on was the vital
synergy between email, directory services and instant messaging.


Most companies use one of two email platforms: IBM Lotus Notes or Microsoft
Exchange. These two products account for nearly 90% of the business email
market. Along with them, companies have an existing investment in
infrastructure, training and support. The systems require directory services to
keep track of login information. Nobody wants a separate system to track or
integrated; neither the poor end user or the overworked IT department.


The Reality

The easiest solution for most companies? Do nothing. Let employees use the
free instant messaging services that are out there, but lock down specific
features that pose a risk, or install third-party watchdog software to ensure
regulatory compliance. Companies that need more robust messaging will usually
opt for the product that best integrates within their current environment. If
they currently use Lotus Notes for email, they will likely use Lotus Sametime
instant messaging. If they use Microsoft Exchange Server for email, Windows
Messenger integration is a no-brainer. There is no point in complicating the
matter with yet another enterprise level system. In this environment, how could
Yahoo! and AOL possibly compete?


The Wild Card

The wild card in the equation is
Jabber. This scrappy
company offers an alternative: an enterprise IM server that provides multiple IM
protocol compatibility via server plug-ins. This could prove very attractive to
many companies that are not sure which direction to go with their IM strategy,
or who need support for external IM networks like AIM or Yahoo. They can provide
a secure, internal IM network for employees, and extend that as needed to
support public IM networks.


In the end, smart companies will evaluate their instant messaging needs in
the context of a complete communications picture that includes email, voice
technology, and external instant messaging needs before jumping into any
purchasing decision. Very few companies can dictate to their clients, partners,
suppliers or customers which instant messenger to use. Using several IM networks
will remain a fact of business for the foreseeable future.


##


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