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Instant Messaging shows how businesses often chase technologies they didn’t expect

The hands popped up as soon as the floor was opened to questions toward the
end of the morning session on ”How to Speak IM.”

By D.C. Denison, Globe Staff, 3/25/2002

Nearly 50 people were gathered in a conference room at Boston’s Parker House for the
Spring 2002 Instant Messaging Planet Conference and Expo. Many of the attendees
had questions: What’s the best way to integrate instant messaging into a corporate
network? Is anyone using IM for supply chain management? Can instant messaging
be beefed up to handle video?

The flurry of questions underscored the popularity of instant messaging, a hit that
caught the technology world by surprise. Launched with little fanfare by AOL in the
mid-’90s, it has grown steadily ever since, spurred in part by the launch of instant
messaging products by Yahoo and Microsoft.

The explosion of IM is having the inevitable result: Technologists and entrepreneurs are
now playing catch-up, trying to determine how they can capitalize on IM’s promise and
momentum.

In this respect, instant messaging is like previous surprise technology hits in the
Internet era. In fact, the Internet itself, and later the Web, were both growing rapidly
before businesses jumped on their bandwagons. Internet search technology also
achieved massive adoption very rapidly. Only the nimblest companies were able to get
out in front of that trajectory. Napster and peer-to-peer networking also escaped from
the barn before anyone could create a workable plan to profit from the technology. In
fact, the major record labels are still playing a frustrating game of catch-up in the
online music space.

Sometimes, it seems, tech just happens. And when it does it creates a unique
dynamic for many tech-related businesses. Suddenly there is a rush to understand
this new technology and capitalize on it. The agenda shifts 180 degrees: Instead of
laboring mightily to launch a new concept, the challenge is to quickly catch up to a
trend that is already a hit. Often the trend emerged not from a corporate or government
research program but from a small engineering office or a college dorm.

The origins of instant messaging, for example, go back to the first days of the Internet,
when early technologies like Unix talk and Internet Relay Chat made it possible for
users to track when other people were online and engage them in real-time text
conversations. The architecture of instant messaging is built into the Internet.

AOL introduced instant messaging to a general audience in the mid-1990s, when the
service rolled out the ”Buddy List” as a way to track users who were currently logged
on to AOL. Buddy Lists were an immediate hit, and a surprised AOL quickly
introduced an Internet version, available as a free download. In 1998, AOL attempted to
solidify its hold on the instant messaging franchise by purchasing its only serious
competitor in the space, ICQ (for ”I seek you”). By that time, however, a host of
competitors, large and small, were on their way to market.

Now instant messaging is nearly mainstream. According to research released last fall
by Jupiter Media Metrix, 53.8 million Americans were using an instant messaging
product at home during September 2001, a rise of 28 percent from the previous year. A
smaller but still significant number, 13.4 million, were using instant messaging at work
during the same period.

Certainly it was IM’s unexpected hit status that brought 150 technology types to the
Instant Messaging Planet conference earlier this month in Boston. And one of the first
orders of business, as with many earlier trends, was to adapt the technology to the
corporate environment.

Peter Harker, who heads business development at Communicator Inc., a start-up
based in White Plains, N.Y., was at the conference to beat the drum for ”Hub Instant
Messaging,” a new product his company will be launching in April.

”We wanted to give the business community a product that provided the benefits of
consumer instant messaging without the risks,” he said.

Hacker’s product adds a new layer of security and identification to instant messaging
functionality.

”Instant messaging makes a lot of sense in a business setting,” Harker said. ”But you
want the conversations to be secure: You want to know whom you are talking to. You
don’t want to be trading sensitive information with someone with a screenname of
`Scooby8.”’

”The IM enterprise industry is in its infancy,” said Bob Woods, managing editor of
Instant Messaging Planet, an online publication that has been tracking the nascent
industry since late last year. Instant Messaging Planet was also a sponsor of the
Boston conference.

”At this point many companies don’t know that their employees are using the
consumer IM providers, like AOL and Yahoo, at work,” Woods said. ”The IT
departments aren’t happy about this. At some point, they will probably want to roll out
their own versions of IM. But before they do, there are many issues to work out, such
as security and privacy.

”There are a lot of opportunities for companies that can build in this kind of
functionality,” Woods added.

The approach makes sense to David Weinberger, author of a recently published
Internet book, ”Small Pieces Loosely Joined,” who delivered one of the keynote
addresses at the conference.

”In a sense, IM is a commodity product, in the way that the bits move across the
network,” he said later. ”So the innovation is on the edges.”

Specifically, Weinberger cited security, tracking, and archiving as areas where instant
messaging companies are focused.

”It’s interesting,” he said, ”because in the scramble to provide additional value, many of
these companies are providing businesses with the very same elements of control that
IM has been used to overcome.”

Weinberger said that one of the most attractive features of instant messaging
communication has been its informality. Yet a host of companies are now vying to offer
ways to archive and inspect instant messaging streams, which runs counter to the
spontaneous quality that made instant messaging so appealing to the first generation
of users.

But business is only one of many possible environments for instant messaging. At this
stage of its development, entrepreneurs are actively imagining instant messaging
scenarios that will play in a variety of contexts. Think of all the far-flung possibilities
that were imagined for the Web, and e-mail, and Napster clones. Instant messaging is
now the focus of similarly adventurous business plans.

For example, representatives from Clique Video Messenger, based in Hopewell, N.J.,
were at the conference to demonstrate how their product can add video imagery to
instant messaging communication. ActiveBuddy, based in New York, is trying to
expand the instant messaging concept into news and entertainment. They have
hooked up instant messaging to intelligent computer agents that can deliver updated
information on a wide variety of topics, from rock band Radiohead to professional
baseball.

Jed Kolko, a senior analyst at Forrester Research who tracks consumer technology,
believes that instant messaging technology is on a trajectory that will lead to the
mobile phone displays.

”In Europe and Japan, short messaging services [SMS] is very popular, but it hasn’t
translated to the US,” he said. ”Instant messaging on your mobile might be the way
may that the idea gets introduced in the US.”

Kolko can also envision instant messaging expanding into videoconferencing and
application sharing.

”Both of these tasks require synchronous communication,” he said. ”You want to
instantly connect with people and collaborate. Instant messaging would be very good
for that.”

Michael D. Osterman, who runs his own marketing consulting firm specializing in
electronic messaging, imagines further developments down the road for instant
messaging.

”Eventually, IM functionality will be built into software, it will disappear into office
applications,” he said. ”Programs like Excel and Word will have native IM that will allow
you to invite other people to collaborate with you on a spreadsheet in real time.”

Customer service is another inevitable use of IM, said Osterman. ”It offers another way
to communicate, live, with customers,” he said. ”Some of the communication will be
automatic: If you are booked on a flight and it’s late, the airline will IM your cellphone
with the new departure time, maybe even the gate. That can happen automatically.”

Many of these scenarios, of course, hinge on a level of interoperability among instant
messaging clients that is still far from being realized. This too, is an echo of previous
tech trends. Some of the earliest e-mail clients were incompatible: Graphics and
attachments would open in one e-mail program but not another, for example. The first
versions of Web browsers from Netscape and Microsoft diverged in their handling of
important code like Javascript.

Instant messaging is still bedeviled by similar incompatibilities. AOL, which dominated
the first generation of instant messaging, has consistently refused to allow other
instant messaging clients to access its user base.

This approach worries Weinberger. ”If IM clients don’t work together, it will keep the
entire industry from growing,” he said.

Consultant Osterman, however, confidently predicts IM interoperability barriers will
dissolve within 18 to 24 months.

”Most new technologies – even going back to the telephone – start with operability
problems,” he said. ”This is a phase.”

Progress toward a common standard will likely be helped by the rapid adoption of new
clients from Yahoo and Microsoft. Microsoft, in particular, has been making a
significant investment in instant messaging, promoting its IM client on its Web service,
MSN, and building it into Microsoft’s new operating system, Window XP.

Which is one more way that instant messaging appears to be following the trail of hot
technologies that preceded it.

Just like the early e-mail companies and Web browser businesses that went before, it
appears that the burgeoning IM industry will have to deal with the big-foot entrance of
Microsoft into the game.

”Microsoft is definitely becoming a much stronger player in instant messaging,” said
Instant Messaging Planet’s Bob Woods.

”And, of course, that could change the market totally,” he added.

D.C. Denison can be reached by e-mail at [email protected].

This story ran on page C1 of the Boston Globe on 3/25/2002.
© Copyright 2002 Globe Newspaper Company.

http://www.boston.com/dailyglobe2/084/business/Tech_happens+.shtml

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