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Commentary: Business calls via the Internet should remain on hold

Microsoft's announcement that it has released a voice-enabled version of MSN Messenger 3.0 will be welcome news to many companies and individuals trying to reduce telephone costs.

By Eric Paulak and Jay Pultz, Gartner Analyst

The announcement today by Microsoft that it has released a voice-enabled version of its instant messenger, MSN Messenger 3.0, will be welcome news to many companies and individuals trying to reduce telephone costs in a rapidly changing marketplace.

See news story:
Microsoft lets IM speak for itself

Microsoft has incorporated technology from Net2Phone, an Internet telephony provider, into Messenger 3.0, which allows conversations between PCs and telephones in addition to text messaging via pagers, fax and email. This Internet telephony capability will add to the use of the Internet to deliver voice communications because it will make the functionality seamless to Microsoft Messenger users.

However, an even bigger step could come if this Internet telephony capability is added to the promised compatibility between Messenger and instant messaging products from Yahoo and America Online.

Telephone calls represent a significant portion of companies' network budgets--approximately 33 percent. Although network service prices continue to drop, Messenger 3.0 will likely fuel the popularity of Internet telephony while helping to reduce voice telephone costs further. However, companies should approach such technologies cautiously because the puzzle is comprised of several pieces, including carrier-based service and equipment such as routers and switches.

Companies should begin to gain familiarity with all of the technologies involved in Internet telephony by starting pilot projects that deploy limited technology between internal locations such as company offices. Although it is clear that Internet telephony is the future for voice communications, the speed of the evolution of network technology and the rate of adoption remain to be seen.

Parts of voice traffic can be handled with Internet telephony today, but the technology needs to mature before it can handle all the needs of a company.

(For related commentary on applications of IP telephony, see registration required.)

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.