MSN Next to Hook Up with Reuters

Continuing its efforts to interoperate with leading public and enterprise instant messaging providers, Reuters has signed an agreement to link its IM network with Microsoft’s MSN network, say sources close to the financial services information giant.

The deal, expected to be announced tomorrow, is similar to an earlier arrangement with America Online. The unit of AOL Time Warner agreed to collaborate on making its consumer AOL Instant Messenger and ICQ networks able to send to and receive messages from the Reuters Messaging network, which is in use by more than 50,000 users, chiefly at financial services firms.

Since then, London-based Reuters also has signed a deal with IBM’s Lotus unit, the leader in enterprise instant messaging, to explore creating a gateway that would link the Reuters network to businesses’ Lotus Instant Messaging servers. Also, since last year, Reuters has an existing interoperability agreement with Parlano’s MindAlign, another big IM player in the financial services space. (Parlano introduced a gateway in late August to connect to Reuters.)

As with the more recent arrangements with AOL and IBM, a third party — IM gateway provider IMlogic — has been brought in to handle the technical work of linking the two networks. Boston-based IMlogic’s gateway technology will be deployed at Reuters’ data center and will provide connectivity with Lotus IM servers, AIM, and MSN.

“These different networks work on different protocols, and you need a translation engine,” said Francis deSouza, IMlogic’s president and chief executive. “The second part [that IMlogic adds] is security, because historically, if we allow unauthorized users to connect to the network, there’s a security risk. Our server in the middle manages all that and provides secure connections between all the networks.”

That technology is baked-in to MSN Connect for Enterprises, the Microsoft-specific connector linking its soon-to-be-released enterprise IM product, the Live Communications Server — on an early version of which Reuters Messaging is based — to the MSN Network. MSN Connect for Enterprises, in turn, will form the basis of the Reuters Messaging gateway.

“Reuters is our largest deployment of [Live Communications Server,] and the MSN Messenger Connect for Enterprise services extend that reach to our more than 100 million users,” said Peter Ollodart, director of MSN Connect for Enterprises at Microsoft. “The highest level of benefit there is from Connect is that sellers can use the Reuters Messaging network with a very large base of customers and do that in such a way that’s safe for them and compliant for them.”

Reuters expects to have the gateways with IBM, AOL, and MSN — and any other IM firms with which it strikes a deal — up and running by March, when it will unveil the next version of its IM service.

As a result of their compatibility with Reuters through IMlogic’s gateway, it’s expected that both AIM and MSN will support Reuters Messaging’ enterprise authentication and naming convention — users appear on the Reuters network as user@company.com.

A union of this nature between Redmond, Wash.-based Microsoft and Reuters isn’t unexpected, considering the two companies’ close ties.Reuters had been an early beta user of Microsoft’s upcoming Live Communications Server, codenamed “Greenwich,” and a development partner in the MSN Connect for Enterprises gateway.

Additionally, Reuters’ initiatives in IM and real-time communication are being driven by David Gurle, part of the team responsible for the development of “Greenwich” and the software behemoth’s work with Reuters, while at Microsoft. Gurle joined Reuters in March.

Interoperability now?

The lack of interoperability among the major networks has long been an issue of contention for consumer instant messaging users, but it’s especially acute in financial services, which is one of the first industries to have adopted IM for business use. Major rivals in the financial industry have even joined forces to encourage vendors to interoperate.

As with the AOL deal, the agreement with MSN marks the first time that Microsoft has agreed to open its network to connect with another IM provider’s systems. In years past, however, Microsoft has supported IM interoperability among the major networks in consumer IM — particularly targeting AOL, which operates a larger IM network.

More recently, though, the company has been increasing efforts to keep its network off-limits from third parties. Earlier this month, Microsoft unveiled an upgrade to its network protocol that would lock out users of third-party IM clients.

But both AOL’s and Microsoft’s willingness to open their networks under certain circumstances thus represents a sea change in their way of thinking. That’s a result of the explosion of instant messaging into the enterprise — and the consequent launch of business IM products from the networks, and others, to capitalize on the trend.

Now, with partners like Reuters willing to pay for access to the IM networks — exact terms of which have not been disclosed — the networks suddenly have a business model that encourages openness.

Standing in the way of interoperability, “there have always been two issues — business and technical,” said Microsoft’s Ed Simnett, lead product manager on the Live Communication Server. “MSN Connect for Enterprises starts to demonstrate some value-added business models, and that’s got people thinking.”

Microsoft has shown a willingness to open up in other areas, as well — including consumer IM. While it has taken measures to limit unauthorized third-party access to its MS network, it’s simultaneously pursued a related licensing program to permit third-party IM clients’ access to the MSN network — while monetizing their connectivity.

For Reuters, the efforts to link with major IM communities increases the value of its IM network by enabling its financial services industry users to connect with clients and partners, and even other in-house colleagues, who might be using the public IM networks or a Lotus IM server.

The company also plans to begin levying its first fees as a result of such partnerships, beginning with the March launch of its next client. Indeed, Reuters envisions offering basic IM for free, while charging enterprises for value-added services, like multi-network compatibility and other services.

Future developments

The deals between Reuters and IBM, Microsoft and AOL makes Yahoo! the odd man out, as the only major public IM network to lack a connectivity agreement with the financial services information player — or with any other IM network, for that matter.

But sources familiar with the situation said that Yahoo! and Reuters are in talks about just such an agreement.

Steve Boom, senior vice president at Yahoo! Enterprise Solutions, declined to comment on any formal discussions between the two companies, or with other IM networks or enterprise IM vendors. But he did reiterate the company’s stance on connectivity to other communities.

“If you go back four, five years, Yahoo! and Microsoft have been the ones clamoring for interop,” he said, referring to the networks’ early efforts to gain access to the AOL Instant Messenger community. “We think the enterprise market will drive it, rather than the consumer market … there’s a business model here, now that people are paying for IM … I’m sure the financial services community, just like every other community, wants interoperability.”

In addition to Yahoo!, sources say Reuters is also talking to IM players working with the open-source eXtensible Messaging and Presence Protocol (XMPP) — also known as the Jabber protocol — about connectivity with XMPP-based servers. Spokespeople from the Jabber Software Foundation declined to comment.

Christopher Saunders is managing editor of InstantMessagingPlanet.com.

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