Microsoft Corp has penciled in the first quarter of 2003 for the release of MSN Messenger Connect, the beachhead for its foray into enterprise-grade instant messaging services, which will put it into competition with Yahoo! Inc and America Online Inc.

Connect is a server/service combination for which Microsoft will charge up to $24 per user per year subscription. Leveraging technology from FaceTime Communications Inc and IMLogic Inc, the system will also integrate with existing Microsoft products and forthcoming products from its "Greenwich" communications project.

AOL, Yahoo and now Microsoft are targeting the enterprise IM market for very simple reasons. Companies are already using the services, but the providers are not seeing any revenue from that usage. In addition, companies are concerned that without proper logging and security they will be exposed to liability and vulnerabilities.

Yahoo and AOL have both released early versions of their offerings in the last five weeks. Yahoo said it can encrypt messages using Windows' built-in SSL capabilities. AOL said it is working on a PKI-based security enhancement with VeriSign Inc. Microsoft has not disclosed if Connect will have any security functionality.

After logging and security, a third key feature in all three offerings is the ability to manage internet corporate namespaces. All three of the big public IM firms are addressing the problem the same way - by adding @domain extensions to usernames, much like email addresses, so users can message inside and outside the enterprise.

While Yahoo hopes to leverage its technology integration agnosticism (tying into multiple directories, for example) to win customers and AOL its huge user base, Microsoft appears to be pushing its ease of integration with existing Microsoft infrastructure as a key differentiator.

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