Network management Toolkit

Companies increase IM surveillance

Tags:
IM,
Surveillance,
Instant Messaging

Dawn Kawamoto CNET News

Published: 26 Oct 2004 15:45 BST

Aiming at IM
According to the ePolicy-AMA survey, 60 percent of US companies now use software to monitor incoming and outgoing external email, while 27 percent of employers use software to track internal email between employees. By contrast, employers have been relatively slow to monitor instant messaging, with just 10 percent of companies surveyed indicating they have taken steps to listen in on desktop chat.

"Employers think IM is an emerging technology and they don't have to monitor it yet," Flynn said. "But if they have employees in their 20s, chances are [those employees] probably have been using IM since high school and view it as old technology. And if a company doesn't provide enterprise IM, [workers will] probably go out on the Internet and download a free version."

IM giants America Online and Yahoo launched plans two years ago to offer corporate versions of their IM products, promising better security, along with regulatory compliance features not found in their free versions. Both have since scaled back those plans, but other companies have stepped in to fill the void, including industry titans such as Sun Microsystems and IBM, which are embedding their own IM products into their existing applications, and smaller companies such as IMLogic, FaceTime Communications and Akonix.

"Industry estimates say that by the end of 2005, IM in the workplace will surpass email in the workplace," Flynn said. "IM is coming on fast, and given that, employers need to take the necessary steps now with their policies and monitoring software."

Monitoring software downloads is a top issue as well, industry observers and legal experts say.

In 2002, an Arizona company paid $1m to settle a lawsuit with the recording industry that charged copyright violations involving MP3s stored on the company's computer systems. Since then, many corporations have adopted policies banning file-swapping software in the office and installed network traffic management software to track down potential violators.

Despite hot prospects, the industry has not seen a flood of new players. Instead, it has seen a rise in consolidation, particularly this year, Jeffries analyst Egbert said. Among recent deals, Blue Coat purchased Cerberian, CyberGuard acquired Webwasher, and Internet Security Systems bought Cobion.

Websense, for one, has seen its revenue and earnings soar. Sales went from $19.5m in the second quarter of 2003 to $26.6m in 2004. Net income for the same period jumped from 19 cents a share to 25 cents. Analysts expect the company will generate 25 percent annual growth over the next three years.

Customers such as PepsiCo and Ford Motor use Websense software to track and report employee Internet usage, block access to some Web pages, and set temporary access windows that limit the times some sites are available.

Expectations for the company have cooled recently. JPMorgan, which served as an underwriter for Websense's IPO, downgraded the stock from "Overweight" to "Neutral" on Friday. Websense shares fell 12 percent for the day, closing at $39.70.

"We believe upside potential in September is not as great as in June, and that December will be even tougher," Sterling Autry, JPMorgan analyst, said in a research note. "With the growth rate in seats up for renewal slowing, it places even more emphasis on gaining new customers...but the number of new seats bought by each new customer declines."