Enterprise IM Generated $119 Million In 2003

Unregulated instant messaging spurs need for hardened enterprise solutions. EIM penetration in North America is only 10 percent.

September 3, 2004

2 Min Read
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According to analysts the global enterprise instant messaging (IM) market earned revenue of $119 million in 2003. It is a number that will grow, as organizations become more familiar with the security threats posed by public IM systems.

Despite public IM technology's immense popularity among enterprises, it is likely to take second spot behind enterprise IM (EIM) in the long term. Unregulated IM's advantages of lure and reach are expected to lose out to its drawback of security issues.

According to a new report fron Frost & Sullivan, public IM throws up a host of security threats to enterprises. Moreover, with greater emphasis on compliance, it becomes even more necessary to archive and log all IM conversations for auditing purposes.

Although free public IM is flourishing and is projected to do so for the next five years, EIM vendors are likely to break through the market by stepping up efforts to integrate various capabilities and educate end users on the benefits of EIM.

There is huge potential for EIM all over the world. Even though 90 percent of enterprises in North America use some form of IM, the actual penetration of EIM is only 10 percent in the region."The Europe, Middle East, and Africa (EMEA) region lags behind North America in terms of adoption by about 1.5 to 3 years while the Asia Pacific region is about 1 to 2 years behind EMEA," say analyst S.V. Purushothaman. "This provides immense scope for business development in these regions."

EIM could also receive a shot in the arm from regulations such as Sarbanes-Oxley (SOX) and Health Insurance Portability and Accountability Act (HIPAA) that require enterprises to stringently monitor their communication processes.

However, compliance with these regulations will involve huge capital expenditure for R&D, thus reducing the funds available for marketing and promotion. This can give IM vendors another chance to score over EIM vendors.

Further, IM vendors are finding it easy to improve their revenue as many enterprises are looking to monitor and control their IM networks without investing in EIM applications. If major EIM vendors do not focus on total interoperability, IM gateways vendors are expected to remain unchallenged.

Microsoft has been working toward interoperability by integrating with AOL and Yahoo networks for enterprise-level secure communications. Despite this move proving that interoperability is possible, vendors may be reluctant to open up their networks to their competitors without adequate compensation.0

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