Turek writes that "The announcement supports Nemertes prediction that instant messaging, telephony and presence are converging within applications and providing new competition for the desktop." The new product also adds the capability to tap users' Outlook calendars to re-route IP-based telephone calls to wherever they are supposed to be.

"Clearly, Microsoft is pursuing its goal of embedding presence into productivity applications," she writes, "but it's also butting up against the telephony world." That's not new, she adds because vendors including Nortel and Avaya have software-based phones that allow the same sort of call management facilities embedded in Istanbul.

"Those products are significantly more advanced than Istanbul," she writes, "and include find-me/follow-me capabilities, unified messaging and other capabilities not included in Istanbul." That could be a problem for the Redmond giant, and she points out other roadblocks as well.

Among them is Microsoft's typical exclusivity. "Although companies could theoretically run the Live Communication Server (LCS) client with a different server, Istanbul features are available only if LCS 2005 and Exchange Server are used." LCS 2005 is currently in beta test and not due out until January. Turek also points out that the way calendar information is to be used by Istanbul to establish presence may render presence information to be incorrect.

The Nemertes analyst points out the impacts you might look for from the Istanbul announcement:

• For Enterprises: IT executives should consider Microsoft's planned capabilities as they make their decisions about which enterprise IM client to deploy, and when to do so.

• For Vendors: Telephony vendors should look at Microsoft as both a partner and a competitor. Integration with the LCS server is a laudable goal—but be wary of partnerships that put your own client software at risk. Other IM applications vendors must focus on presence and integration with other productivity and enterprise applications.

• For Investors: Look for small start-ups that can add value to the new features Microsoft and others announce in the coming months. For the next 2-3 years, the large vendors will be drawing in broad strokes while companies that can fill in the lines could find profitable niche markets and be ripe for acquisition 3-5 years out.