Snapshot: AOL Instant Messaging’s Enterprise Federation Program

Vendor Name: AOL
Date of This Document: April 14, 2005
Author: David Ferris
Source of Information: Brian Curry, VP, Premium and Subscription Services, AOL
Quick Summary of Firm's Offerings. Runs the largest public IM service, AIM, and a smaller one, ICQ. This program is for vendors of enterprise IM solutions, and it will let their customers' internal IM systems connect with AIM and ICQ.

Company Statistics

· # Live Seats: AOL estimates there are about 14M business people that use AIM or ICQ at least once a month. The great majority are AIM users rather than ICQ users.
· Other: AOL estimates there are about 46M AIM users, and 4M ICQ users, in the US. AOL also estimates that globally, there are about 65M AIM users, and about 20M ICQ users. Here, a user is counted as an account that logs in and sends an IM message at least once a month.
· ICQ is strongest in Germany, Brazil, Hong Kong, and Israel.

Enterprise Federation Program

Product Name: AOL Enterprise Federation Partner Program
Product Functionality:
· Program is for vendors of enterprise IM solutions
· It helps these vendors provide their customers with connectivity with the global AIM, AOL, and ICQ communities
· Initial partners are Antepo, Jabber, Omnipod, Parlano
· Inter-system connection is done through AOL's Federation Gateway. This is AOL-developed software which runs on AOL premises. Among other things, it routes messages, and translates protocols as necessary between SIP/SIMPLE, XMPP, and AOL's proprietary format.
· The resulting end user functionality is: 1) A corporate IM user can put people in the AIM and ICQ communities on their buddy/contact lists, and communicate with them; 2) Corporate users will use their email addresses as IM addresses, rather than the less-scalable strings of today (eg "dferrisfri")
Major Benefits:
· Companies can easily connect their internal IM systems with the largest public IM community. This should be very valuable for many applications, eg customer service, sales.
Launch Date: Program started in April, 2005.
 Pricing: AOL charges its partners on a per-seat basis. The charges are not disclosed. Partners will charge their customers in different ways.
Main Plans--Next 12 Months:
· Add further partners
· Hopefully this will stimulate sales for partners
· Validate the federation model for connecting enterprises to AIM
· AOL is also testing additional services for customers of AOL EFP partners. These include business-to-business clearinghouse services and advanced communications features.
For Further Information.

Ferris Research Comments

· For several years, AOL has been working to provide real support for enterprise connectivity. This is a further illustration of its efforts.
· AOL's major IM competitors, Yahoo and MSN, have far less commitment to enterprise support. Microsoft seems to be deemphasizing MSN enterprise IM connectivity, in favor of connectivity through LCS 2005. Yahoo shut down its enterprise sales unit.
· The picture for how enterprise IM will look in five years' time is unclear. It could clearly be dominated by Microsoft's IM offering, and that of Lotus, with perhaps one other player. On the other hand: 1) Microsoft's had great difficulty getting a usable IM system out to its customers and that situation might continue; 2) Telephony players are discovering the key role of presence. As new VoIP solutions are deployed, presence might bring other IM players to the fore.
· With LCS 2005, different companies with LCS 2005 will be able to federate directly. But for each pair of links, they'll need to implement and manage the link. Using AOL as the connecting hub should be much more practical. (Shades of X.400 for us old fogies!)
· Most of the internal-to-external communications will be encrypted. Because most public AIM users don't use the encryption option, the hop between AOL's computers and consumer AIM/ICQ users probably won't be encrypted.
· There were plans at one time for federation between IBM/Lotus instant messaging and AIM/ICQ. These were not consumated. Pity.
· Ferris suspects AIM has far more business users than MSN or Yahoo. Can't prove it right now, 'though.

Ferris Research Consulting

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