Next Level of Instant Messaging

Microsoft's Live Communications Server 2005 can help your customers manage internal messaging, while staying connected to outside users running MSN, Yahoo! or AOL.

It's hard to believe that just a few years ago, instant messaging (IM) didn't even exist. Today, it seems people can't live without it. IM has become so prevalent that companies are considering proper management practices for this powerful tool. And to do so, many are taking a serious look at Microsoft Live Communications Server 2005 (LCS).

Microsoft's flagship IM engine is available in two editions: Standard and Enterprise. The Standard version runs on a single server and can service thousands of users. The Enterprise version supports large-scale services like load balancing and server clustering for back-end databases, so Enterprise LCS customers will have the resources to handle hundreds of thousands of users.

LCS communications are based on Session Initiation Protocol (SIP), a standard protocol designed to provide presence information. The advantage of using SIP is that it not only supports IM, but also any other means of instant communications. That's one reason Microsoft recently released Office Communicator 2005, a new multi-function IM client that supports any PC-based communications: IM text, voice and video. It also supports electronic telephony systems, so customers can use their PC to respond to external telephone calls. With the LCS/Communicator combination, telephones would no longer be necessary.

Microsoft has invested heavily in LCS to make it a powerful tool. It has negotiated with AOL, Yahoo! and its own MSN to ensure that customers using LCS 2005's Federated Services can connect with these three cornerstones of public IM. This means companies using LCS no longer need to support other IM clients, because this single client will let users connect with anyone, internal or external.

Microsoft Live Communications Server 2005 with Service Pack 1
Release: Standard Edition shipped in October 2004

Base Price: LCS 2005 Standard Edition Server license with 5 CALs: $1,199; LCS 2005 Enterprise Edition Server license with 25 CALs: $4,969

Setting up LCS is straightforward, even for the Enterprise version. There are a couple of tricky points when creating special domain name system (DNS) records to enable SIP presence,but once that's done, everything works like a charm. Like Exchange Server 2003, LCS requires Active Directory to store locator information. Therefore, LCS customers will need to be in the appropriate real-time communications groups and will need an account with SIP records enabled. Customers can also use LCS Archiving—though this requires a separate server—to monitor IM activity within their networks. One of the best things about LCS is that it pretty much manages itself, and can replace all other IM engines in a customer's organization.

There are a couple of limitations with LCS, though. First, companies using the Windows Messenger client will find that LCS only supports two-person meetings. That's because Microsoft wants them to use Microsoft Live Meeting—a hosted Web meeting service—to engage larger groups. That's fine, unless a customer doesn't like to have meetings hosted outside their company, which is a significant issue for the security conscious.

To alleviate that problem, Microsoft added a "new" feature in Office Communicator—NetMeeting. That's right. Microsoft has gone back to this component of Windows 2000 instead of breaking the two-person limit in LCS. This means customers can host larger meetings internally, but must also support NetMeeting.

Beyond these limitations, LCS works as advertised. Microsoft provides a ton of documentation, so it's easy to prepare and deploy. The installation itself is well documented and easy to follow. User training is minimal, because most IM clients work the same. Customers will need to make some decisions at a central level to determine how to manage the features and which settings to enable through Group Policy.

Spotlight Highlights

Key Features

  • Uses Session Initiation Protocol (SIP) to support instant messaging and other means of instant communications such as video, audio and text
  • LCS Archiving lets administrators monitor IM use
  • Load-balancing and clustering support to manage hundreds of thousands of users
  • Can host large meetings when used with NetMeeting
  • Simple installation and configuration


  • IBM Lotus Instant Messaging and Web Conferencing 6.5.1 Server
  • Novell GroupWise 7.0
  • Akonix L7 Enterprise
  • RIM BlackBerry Enterprise Server

Opportunity Assessment

  • Partners can reap rewards of the legwork Microsoft has done in integrating LCS with public IM systems from AOL, Yahoo! and MSN
  • Can deploy and integrate LCS and Office Communicator through Microsoft's Rapid Deployment Program
  • Stiff competition from established players, particularly Akonix and RIM for Microsoft shops

Competitive Landscape
Microsoft is not the only company to enter the internal IM fray, and it was by no means the earliest. There are many competing vendors—IBM, Novell and Akonix, just to name a few. You could also consider RIM as a competitor with its mobile BlackBerry IM.

All of the major vendors are moving to support and provision mobile IM. IBM Lotus Instant Messaging has a strong set of features that don't require Lotus Domino. The service can run on multiple platforms, but lacks enterprise logging features. Novell also has a good solution that is provided free with the latest version of GroupWise, although only Novell users are likely to embrace this solution.

Akonix has been working in the IM space for quite some time, and has a strong solution. In fact, whether your customers use Akonix L7 Enterprise or not, they may want to use the Akonix monitoring components that let them monitor any IM client activity within their network.

Finally, RIM also has a powerful mobile IM solution. Microsoft has been working hard to improve its Windows Mobile client to compete directly with RIM. Windows Mobile 5.0 is specifically oriented toward supporting IM on the Pocket PC platform.

Marketing and Sales
Microsoft provides members of its Partner Program with quite a bit of marketing and sales information. The Microsoft Action Pack, for example, gives you low-cost access to Microsoft software, as well as a ton of marketing and sales information to help you compete with other products when selling and positioning LCS. On the Partner Program Web site you can find out when new products and marketing tools become available. Once you're a partner, you'll have access to:

Product box shots to use in your marketing brochures

  • A Partner Logo Builder to integrate the Microsoft logo with yours
  • Case studies to show your customers
  • Competitive comparisons
  • Fact sheets
  • Presentations
  • White papers

All of this is helpful information that you can integrate with your own marketing materials. If you're a Certified Partner, you also have access to the Business Value Advisor, an HTML-based desktop sales tool that helps you quantify a solution's benefits, costs and risks, as well as its capabilities as they would be applicable to your customer's situation. This is quite a useful tool. You'll also have access to some pre-sales technical support, all of which makes it quite worthwhile to partner with Microsoft. Whichever way you go, you'll find that Microsoft offers a ton of information for LCS on the public Web site. It's one of their main product pushes right now.

Microsoft also has a Rapid Deployment Program (RDP) running with a vast number of key customers. Within the RDP, Microsoft offers free consulting services for the architecture, installation and deployment of LCS and Office Communicator. One systems engineer in this program stated that he alone is responsible for more than 30 individual customer deployments. The RDP usually runs for a period of weeks instead of months, so 30 clients in that time frame is an aggressive push on Microsoft's part.

The Final Word
In the end, this may be one of Microsoft's finest products. It's simple to use, extremely powerful—especially when tied to your telephony systems—and easy to deploy. What makes this product more compelling than its competitors is the legwork Microsoft has done with the three public networks—MSN, Yahoo! and AOL—to ensure that internal IM users can easily connect to external IM services. This is why customers can use Office Communicator to replace all other internal IM clients and why LCS is so powerful.

When you're selling and marketing this product, you should begin with any customer currently running either Exchange 2000 or Exchange Server 2003. By default, they already have the prerequisites in place.