Messaging Market Assessment

The messaging market assessment incorporates the unified messaging (UM) and instant messaging (IM) market. The UM market consists of platforms and services that integrate different modes of communication e-mail, voice mail, mobile, and fax that facilitate users’ ability to remain in touch.

For example, popular unified messaging services include fax over e-mail, call management services (such as call forwarding, one number service, etc.), and text-to- speech services (for example, accessing e-mail over the phone). UM services allow users to access messages from virtually any communications device – telephone, PC, or the Internet – and enable users to manage their messages from their familiar e-mail inbox using common e-mail (for example, Microsoft Outlook and Lotus Notes).

Instant messaging in the enterprise market is the ability of a user to determine if a colleague or associate is connected to the Internet (presence) and then able to exchange “real time” messages, superceding the pace of e-mails. These services are designed to ease enterprises’ and employees’ daily glut of communications by providing secure, user-friendly, and cost- effective solutions to improve enterprise communications. Services covered include transport over IP networks, though wireless IM is not addressed in this coverage. The evolving market for UM/UC is seeing major competition not just among vendors but also among different technology areas such as: traditional unified messaging companies, wireless carriers, wireless device manufacturers, VoIP vendors, and an emerging group of collaboration platform developers.

Market Review:

• Convergence Spotlight: Avaya announces “user-centric” communication to merge different media into a single, integrated tool. Avaya brings technology that focuses on making multiple communication mediums to work together. The promise is for increased productivity by connecting the right person, in the right place, at the right time, in the right ways. The focus of this converged communication system is to provide transparent use of all available media to each user. This means, for example, that the client can start a call on his or her cellular phone and finish it at their desk phone – transparently. It allows clients to also combine multiple channels, discovering that people with whom they would like to communicate are on the phone, so they can use IM to reach them, but then connect them into a telephone conversation when they are available.
• E-mail Security and Information: Proofpoint introduces its Proofpoint Spam Audit (PSA) program. The PSA analyzes all of the messages flowing in and out of an enterprise and provides comprehensive reports that can be used to help guide decisions on acquiring enterprise message protection solutions. The audit is designed to identify a complete range of messaging threats faced by today’s enterprises including spam, viruses, and violations of outbound e-mail policies. The PSA gives enterprises access to 30 detailed audit reports, all of which can be customized, exported to Microsoft Excel for further analysis, or printed for review. With this data in hand, companies can gain insight into the state of their messaging infrastructure and understand key metrics such as: how much spam their current anti-spam solution is failing to detect; the exact volume of spam versus valid messages entering the network; critical spam and e-mail statistics, such as message volume, top spam recipients, top viruses detected, attachments detected and much more; and the cost of spam and other messaging threats to the organization. AT&T also introduced its AT&T E-Mail Archiving, a fully managed service to help businesses and U.S. government agencies meet complex industry and federal regulations regarding e-mail archiving.
• IM and Security: IMlogic offers a means for enterprises to control and manage IM traffic in an enterprise’s network. Instant messaging is a powerful tool but uncontrolled and unmonitored IM use can expose an organization to numerous security threats. IMlogic’s IM Detector provides insight into IM traffic in a client’s organization.
• Get Ready for IM Spam or “Spim”: Instant-messaging spam or spim, as it’s often called is beginning its march into the corporate world. Spim isn’t nearly the headache that e-mail spam has become, largely because instant messaging isn’t as ubiquitous as e-mail in corporate settings and IM spammers are easier to catch with the closed nature of IM networks. But it is expected that spam IMs have the potential to frustrate end-users as much as e-mail spam. Enterprises are already preparing strategies to battle “spim” and outsourcers need to include this in their offerings.

Near-Term Market Drivers:

• Return on Investment (ROI) and Lower Total Cost of Ownership (TCO): Clients are looking for investment return and service providers that can document productivity, time savings, and messaging flexibility can provide continued integration in business networks.
• IM and the Law: The financial industry faces particular concerns concerning compliance, privacy, and security with IM. For example, institutions that fail to turn over records of electronic communications as demanded under the Sarbanes-Oxley Act of 2002 could face stiff penalties. Whether IM is subject to Sarbanes-Oxley remains unclear at this point. In 1997, the Securities and Exchange Commission issued guidelines for the use of e-mail, but IM has not yet been written into any SEC regulations.
• Security: For security, some companies may turn to monitoring products, such as Akonix L7 Enterprise 2, a gateway that monitors and regulates consumer AOL Instant Messenger, AOL ICQ, MSN Messenger, and Yahoo! Messenger usage. Trend Micro also offers multiple product versions in its messaging security software family. The products are designed to thwart viruses and other malicious content in emails before they are transmitted through the corporate network .The products include; InterScan Messaging Security Suite, ScanMail for Microsoft Exchange, and ScanMail for Lotus Notes.
• Customer Premise Equipment vs. Service Provider: The market is divided into those that offer UM services, and those that sell UM software for an organization to utilize. These two approaches offer enterprises access to voice, fax, and e-mail from a central location, and each should be evaluated to determine which delivers on the needs of the organization. For example, a service provider model offers quicker set-up and implementation times, but more importantly, does not require additional staff to manage the UM system. A service provider model also allows users to stay up-to-date with new features in a timelier manner. The service provider approach allows for rapid scalability and is well suited for smaller enterprises that don’t have the internal support means. However, the customer premise equipment approach does offer enterprises more flexible than a service provider offering. The customer has much more control about which features he or she wants deployed, how long messages will be stored, and message presentation. Prospects need to consider the options that best fit their business needs.
• Video IM: Apple introduced its iChat AV, an enhanced version of the IM client that adds video- and audio-conferencing capabilities, which ride on top of the AIM network. Those features also are available in connection with local, ZeroConf-based instant messaging, which has been supported since the initial version of iChat. Apple’s product allows for users to simply plug in a Firewire video camera or a USB microphone to begin signaling to others, via the iChat Buddy List, their ability to chat. In May 2004, AOL’s ICQ division is planning to launch video functionality for its client through an Xtraz add-on.
• Price: For many consumers, the main concern about messaging services is price, with service being a second priority. Because free messaging has performed well, users have varied expectations when it comes to instant messaging services. This has meant as a driver that companies looking to bring paying businesses on board must deliver added value while still within a price range that users are willing to step up for the service. Many businesses have not adopted the premium services because of the cost, though as more industries are required to meet government regulations, they will look to players that can offer a solution at the right price.

Long-Term Market Drivers:

• Educating the Market: With a lack of knowledge of the cost savings that can be incorporated with UM/IM services, many users and enterprises have been reluctant to migrate to a solution. Clearly, communicating these benefits will help drive the market. Further, users need to know what they may need to do to be in compliance with various govt. regulations which require tracking messages going out from a company.
• UM Incompatibilities: To date, there are varying standards in protocols for UM, including standards-based and proprietary systems. For example, in some cases there have been complications in receiving and reading faxes over e-mail, as sending and receiving services may be incompatible. Other UM services require users to download a program that reads the fax file through e-mail. These incompatibilities and inconveniences have impeded the adoption of UM.
• System Upgrade Costs: Despite growing interest by customers in UM, often the hurdle to overcome is a company’s investment in a legacy system that it is not yet ready to abandon. Migrating to a UM service is a long, slow-growth curve without a guarantee of service, quality, or return on investment.

Offensive vs. Defensive Responses:

IM and the Law:

• Offensive: Service providers that do not prepare for the inevitable rules and regulations that are likely to be placed on IM services could find themselves receiving financial penalties and damage to their brand.
• Defensive: Service providers cannot take potentially costly maneuvers with the uncertainty that currently surrounds rules, regulations, compliance and privacy issues with IM and can take a wait and see approach to determine exactly how IM will be handled in the courts.

Security Products:

• Offensive: Implementing new security products would allow companies to differentiate their messaging services from competitors, providing sales forces with proof points and provide a company image of a leading technology adopter.
• Defensive: Implementing new potentially costly and unproven security technology at this time, especially for smaller players, is placing the cart ahead of the horse at this time.

Price:

• Offensive: Service providers that are leading with free services or providing very cost-effective solutions should capitalize on this to expand market share. Service providers can play up the greater reach from increased market share from a free service to capture paying customers looking for more bells and whistles.
• Defensive: Service providers should also highlight features and functionality, and avoid the price issue when discussing messaging services if they are not offering a competitive price.

Return on Investment (ROI) and Lower Total Cost of Ownership (TCO):

• Offensive: Enterprises that adopt messaging services by consolidating messaging systems will realize a lower TCO and easier administration when compared to the equivalent three separate solutions for e-mail, voice mail, and fax.
• Defensive: Enterprises will have high expenses associated with transitioning out of legacy PBX systems prior to realizing the potential cost savings associated with messaging services.

Video IM:

• Offensive: Video IM services are a natural progression of text IM and providers would be wise to implement these services in their portfolio of messaging products and services, leading the way for new revenue opportunities.
• Defensive: The demand for Video IM has yet to be determined and the current available technology does not warrant providers including this into their portfolio.