Jennifer Tanaka, Newsweek

You 'Pinging' Me?

IM—instant messaging—has already arrived at the office. But businesses may not be ready.
Walk down the halls in most any office these days and you’re likely to hear the familiar sound of an instant message arriving on someone’s computer: “Ping!” The technology—“IM” to its devotees—is like a rapid-fire e-mail that’s instantly sent and received, popping up on top of everything on your screen, as if someone stuck a Post-It note there. About a third of today’s 200 million IM users worldwide are doing it at work. As it turns out, the tool that was so popular initially with teenagers is also great for doing business. Analysts predict that by 2006 IM will overtake e-mail as the primary communication tool at work.

        CORPORATE IT departments may not be ready for the switch. Unlike e-mail and spreadsheet programs, IM today is largely an unauthorized software tool. (Companies can’t monitor it. What they can’t track, they can’t hold against you.) Workers download it free from the Net through an opening in the fire wall (the one that lets you surf the Web). According to Jupiter analyst Michael Gartenberg, the boss is pretty much in the dark. “If I ask 10 CIOs if IM is being used for business-critical communication, nine of 10 would say no,” he says. “And eight out of nine would be wrong.” One sure sign a technology has arrived? IM handles are turning up on business cards.

        Erik Ernst is a perfect example of the new breed of corporate user. An e-commerce consultant in Chicago, Ernst has installed four IM programs on his work PC. The programs connect to public IM networks operated by AOL, MSN, Yahoo! and an AOL subsidiary called ICQ. But because these networks don’t talk to each other, he needs to maintain all four programs. Ernst, 28, started using IM in college. He says it’s simply more effective at reaching people when they’re online. The reason is when they’re logged on, their names pop up on his “buddy list.” With IM, clicking on a name opens a separate dialogue box. Ernst can then start chatting (“Wanna get lunch today?”), forward files and documents, or send a music clip. Does IT know about this? “Nope,” Ernst says with a shrug.

        Actually, the IT department probably does know. It’s just in denial. “They know,” says Robert Mahowald of IDC, a consulting firm in Framingham, Mass. “But because their budgets are too small to deal with it, it is a conscious decision to look away.” In other instances, Mahowald says, IT may believe there’s nothing wrong with letting employees use IM.

        As the technology is poised to become popular with a new user base, companies are beginning to realize instant messaging may be exposing them to financial, viral and legal risks. IM now is designed for broad consumer use. And, because it’s free, there’s no incentive for providers to make it more than nominally secure. As a result, it’s easy to tap into channels of IM chatter, theoretically allowing a hacker to eavesdrop. And since IM bypasses the corporate fire wall, it can carry viruses. Perhaps most important, in regulated industries like banking and health care, it’s illegal to conduct official business or transmit private information unless the communication can be logged and archived. That’s not doable with free IM software.
        New products from AOL, MSN (Microsoft’s ISP business) and Yahoo, the big three public IM providers, are addressing these issues. All have recently launched heavy-duty IM products, generically called “enterprise IM.” They’re hoping to exact a toll from companies—from $30 to $45 per desktop—after having given IM away free of charge to consumers for so many years. IBM has already claimed a slice of the corporate IM pie; two thirds of the Global Fortune 100 use its Lotus Sametime product. And 25 smaller companies offer an enterprise-IM software product, each addressing a different niche of this burgeoning market.

        Microsoft’s code-named Greenwich server software is also jockeying for position. “We’re attempting to integrate IM capabilities into the server,” says Bob O’Brien, group product manager of Microsoft’s Greenwich project. This means the ability to send instant messages will reside in any program running off a Greenwich-enabled server. Reuters America, the news and financial-information services company, customized an early version of Greenwich, now officially named Real-Time Collaboration Server 2003. The company, which sells data to banks, has created a Reuters-branded instant-messaging service which it is offering to employees and subscribers. Reuters is thrilled to one-up Bloomberg, its main competitor, which offers an e-mail service to its subscribers. And, take a leap into the future while they’re at it.