The ability to communicate in real-time using instant messaging (IM) is increasing workers’ productivity and that in turn is driving IM adoption in the enterprise, according to a new study by the Radicati Group.
Although corporate IM accounts are expected to reach 60 million in 2003, IM still hasn’t reached its full potential in terms of neither usage nor functionality in the enterprise space, says Genelle Hung, market analyst at the Radicati Group. Corporate IM accounts are expected to increase to 349 million in 2007.
Over the next 12 to 18 months users can expect to see the integration of IM with other enterprise applications such as customer relationship management (CRM) and enterprise resource planning (ERP), officials from several IM vendors said during a panel discussion moderated Thursday by Radicati. The study results were also discussed during the conference call.
America Online (AOL), Microsoft, Sun Microsystems, Bantu, Comverse, and WiredRed Software all participated in the call.
"Through the management server we’re going to let people tap into the (IM) service at an application program interface (API) level and leverage presence, leverage messaging, and do all that stuff that leverages encryption," said Brian Curry, senior director of strategy development, Strategic Business Solutions Team at AOL.
He explained this would be for users to plug (IM) in for the "purposes of file transfer and for messaging value-add as well as for the creation of automated agents and adding front-ends to (users’) back office applications."
Users can also expect to see enhancements to security features, and identity management.
"As IM becomes more prevalent in multiple applications, it’s going to become more difficult for people to filter IM messages they get," said Patrick Dorsey, Group Manager for Sun ONE Communications and Collaboration Software at Sun.
"What we see going forward is a greater need for identity management software as well as the underlying profile or description," he said, explaining that these functions would be along the lines of allowing users to determine who can contact them, when and for what purposes.
Vendors of corporate IM products can expect to see their revenues almost triple by 2007, from US$116 million to $344 million in 2007, according to Radicati’s report. That is the first type of vendor in the corporate IM market as defined by Radicati: the corporate IM vendors, who provide IM technology to clients deploying corporate IM, according to Hung.
The second group is the enterprise development tool vendors who look to use IM to develop value-added applications that allow users to communicate with other applications or having applications drive IM. Radicati expects revenues for these vendors to increase from $2.6 million in 2003 to $7.5 million in 2007.
Third are the IM management vendors who provide technology to manage, log and archive enterprise IM traffic. Radicati says there is a great market opportunity for these vendors because of lack of interoperability between different IM clients. The research firm predicts that revenue for IM management vendors such as FaceTime Communications Inc. and IMLogic Inc will increase from US$6.8 million in 2002 to US$25.7 million in 2007.
However it looks like vendors are interested in eventually settling on a standard, and it looks the most likely candidates are Session Initiation Protocol (SIP), and Session Initiation for Instant Messaging and Presence Leveraging Extensions (SIMPLE), followed by Extensible Messaging and Presence Protocol (XMPP).
This was the consensus from the Sun, AOL, Comverse, WiredRed and Microsoft officials participating in the call. The lone dissenter was the Bantu official, who said interoperability wasn’t a huge concern of its clients.
Radicati’s report on enterprise IM market shows that North America leads the way with corporate IM implementation. Sixty-seven percent of the companies currently using enterprise IM worldwide are in North America. This is because most IM vendors tend to be based in North America and are targeting domestic markets before foreign markets, Hung said.
However, North America's percentage of the worldwide IM implementations will drop to 50 percent by 2007 as Europe's usage rises. Hung forecasts that the number of European-based corporate IM vendors will increase in the coming years. In 2003 IM deployment in the enterprise in Western Europe sits at 20 percent but will increase to 32 percent of worldwide IM deployment 2007.
There will be little change in the deployment in Asia-Pacific, which is at 12 percent in 2003 and will increase to 14 percent in 2007. The rest of the world comprises only one percent of enterprise IM implementations in 2003 and will increase to only two percent in 2007.
Radicati is an independent market research firm based in Palo Alto, California that researches topics such as messaging and collaboration, identity management, security, wireless technology and unified messaging.