The riddle of federation and clearing house Cracking the connectivity conundrum by Chris Lamb SVP, Head of Strategic Alliances Reuters Communication Services A major limitation of (IM) over the past few years has been the lack of Executive summary connectivity among different Public IM networks. From the beginning, Public IM networks provided IM free of charge, relying on revenues from advertising running on the client software. With a business model based on ad impressions, Public IM networks focused on locking users into their native clients instead of interconnecting with other networks.

In 2003, Reuters broke the deadlock and negotiated bi-lateral connectivity agreements between Reuters Messaging (RM) and prominent Public IM networks. A new revenue stream was created, based on network access charges rather than advertising revenue. It was a move that changed the business model and the fundamental dynamics of the industry; it legitimised subscription fees for IM and created the category of business-grade IM. And it drove a service that had previously only been embraced by techies and teenagers into the core of enterprises worldwide.

More recently, Enterprise IM (EIM) vendors such as and IBM have begun offering their own subscription-based business-grade IM. With assured revenue and a maturing Public IM subscriber base, business IM networks have started to connect with each other. Business- grade IM is moving towards the universal access availability of email, but in a way that avoids its vulnerabilities: spam, viruses, malware and other insults.

Reuters believes that there are three necessary steps to achieving universal interconnectivity:

1. The first is the current state ofconnectivity , where EIM networks can connect to the major Public IM networks: AOL® Instant Messenger™, Windows Live™ Messenger (formerly MSN® Messenger), and Yahoo! ® Messenger.

2. The second step, federation, is just beginning, thanks to the emergence of a standard based on Microsoft Live Communications (LCS). Autonomous EIM systems are connected through specific bi-lateral peering agreements.

3. The final step is the use of a trusted third party as aclearing house, through which all IM traffic passes as it moves from one network to another.

The move from connectivity to federation addresses security and quality issues, but only offers limited connectivity. The move from federation to clearing house is the point at which connectivity becomes virtually unlimited, without compromising security and quality.

In this model, Reuters has all the qualities needed to act as the major clearing house for IM traffic: a record of leadership in IM, a global presence, delivery of business-grade services, and a trusted brand. This white paper describes our vision on the evolution of these services.

1 The riddle of federation and clearing house by Chris Lamb Why is Instant Messaging (IM) connectivity so disjointed and why has it evolved so differently 1. The present state from email? This white paper looks at IM’s history, current state, and likely evolution. This paper also discusses how Reuters is driving ubiquitous IM connectivity while avoiding of affairs the pitfalls of email.

A short history of IM

To understand why IM connectivity has been so elusive, it is worth looking at the history of IM.

Emerging nearly two decades ago in the Internet’s technical community from a service called Internet Relay Chat (IRC), IM began as a synchronous text service for techies who needed to communicate instantaneously; only later did it evolve into something more than low-latency email.

In 1996, an Israeli start-up called Mirabilis launched ICQ, the first IM system to be deployed broadly beyond technical communities. In a world dominated by dial-up access, ICQ delivered the unique ability for users to see when their colleagues appeared online. This capability, called presence, proved immensely valuable, allowing colleagues to avoid playing ”email tag” and communicate in real time.

The success of Mirabilis and its business model set in motion a chain of events with aftershocks that still reverberate today.

Most significantly, the company offered IMfree of charge. Their business goals were twofold: minimise barriers to adoption and pre-empt competitors from undercutting on price. Truth be told, the founders did not have a revenue plan. However, when the user base grew explosively, Mirabilis needed to scale the infrastructure. Faced with expensive infrastructure costs, Mirabilis was forced to devise a way to monetize the community.

When AOL bought Mirabilis two years after founding – for $400 million – Mirabilis had no material revenues, but a significant user base. The purchase was justified as an “eyeball” play, but the only way to justify the purchase price was through advertising running on the client software.

The need for advertising, coupled with the usefulness of presence, has handcuffed the industry for the past fifteen years. Presence keeps eyeballs glued to the client, and glued to advertising running on the client. Consider an IM conversation between two individuals from different networks. They obviously see the same conversation, but they don’t see the same advertising — they see ads that run on their own network’s client software (native client).

So interconnection has no advantages for either network, because there is a diminished opportunity to maximize impressions and increase advertising revenue. The best way to increase revenue is to lock as many subscribers into one network, where they see the advertising on the native client.

In this environment, there was no incentive for the Public IM networks — AOL Instant Messenger, Windows Live Messenger, and Yahoo! Messenger — to connect with each other.

Instead, the Public IM networks embarked on a land-grab for native users to exploit the network effect, which posits that the larger the network gets, the easier it is to get large. It is for this reason that Public IM networks balkanised so early, and why interconnectivity has been a conundrum. Even today, Public IM networks are still addicted to the narcotic of ad impressions. Like a recurring nightmare, this early fragmentation comes back to haunt the industry, again and again.

2 The riddle of federation and clearing house by Chris Lamb 1. The present state of affairs IM leaks into business cont’d For many years, IM has been used in the workplace, but not for the workplace. IT departments have attempted to stifle Public IM clients on the grounds that they lead to security problems and create productivity drains. But those efforts have been repeatedly side-stepped by clever IM client design and software that probes firewalls for open ports to worm its way through to the Public IM network. In a queasy detente, IT eventually resigned to having Public IM running on the corporate network.

Over time, began to adopt IM for business. As it came to play a useful role, IM gained the support of management and IT.

A free Public IM service has many implicit costs and risks, such as diminished productivity from distracting social chit chat, exposure to viruses, and increased liability from lack of logging and compliance monitoring. This led to the development of Enterprise IM (EIM) systems, such as Microsoft Live Communications Server (LCS) and IBM SameTime.

EIM vendors have justified the sale of their products to IT on the grounds of “lowest price does not equal lowest cost,” and by relying on the following arguments:

• take back control of your network.

• eliminate rogue clients, which can pose a security threat to your networks from malware and holes through firewalls.

• provide a system that can harness corporate productivity.

• monitor usage to eliminate legal risk and reduce unproductive, non-business related chit-chat.

3 The riddle of federation and clearing house by Chris Lamb The advent, legitimization, and deployment of subscription-based IM services have changed the 2. A change in game. Not ones to run corporate charities, both Microsoft and IBM are charging hefty license fees based on concrete value propositions. Business is happy to pay these fees to address risk, business model eliminate employee waste, and reduce the total cost of ownership (TCO).

Fee-based IM services, in turn, make interconnection between IM networks economically viable. Long gone is the notion that users must be natively attached to generate revenue.

In this new model, network connection charges replace advertising revenue and provide Public IM networks with new revenue streams. Customer pressure and changing economics are now moving the industry to a more rational approach.

Reuters was instrumental in this change, negotiating connectivity agreements with the major Public IM providers as early as 2003. More recently, with Live Communications Server (LCS), Microsoft began offering a Public IM Connectivity (PIC) license for users who want access to AOL Instant Messenger, Yahoo! Messenger, and Windows Live Messenger. PIC fees provide a new revenue stream to the Public IM networks, again debunking the conventional wisdom that all users must be natively attached.

Most importantly, the Pubic IM subscriber base has reached a point of maturation. With no more land to be grabbed, lack of interconnection is tantamount to a stalemate. The legitimizing of the EIM subscription revenue model, the maturation of the Public IM subscriber base, and end-user pressure have motivated the networks to interconnect.

4 The riddle of federation and clearing house by Chris Lamb The email interconnect model is one of ubiquitous connectivity and unencumbered access. Its 3. The impetus to unanticipated consequence has been a pandemic of viruses, spam, Trojans and malware, and interconnect other insults. Nobody wants a repeat of this mess for IM. Additionally, the impact of unfettered IM interconnectivity is more damaging. Because of presence and real-time access, IM is a much more intimate medium. No individual wants to deliberately share with 500 million people worldwide that he/she is “On the Phone.” And the CEO does not want a pesky salesman’s IM popping up like a jack-in-the-box in the middle of an important meeting,.

Therefore, IM interconnectivity needs to provide connectivity while mitigating vulnerabilities, a balance that email never achieved. There are three steps to making this happen:

First is the ability to connect from an enterprise messaging network to Public IM networks. This is called connectivity. Reuters Messaging has supported connectivity since 2005. Both Microsoft LCS and IBM SameTime offer this capability using PIC, though their technologies for delivering connectivity are quite different.

The second step is federationEIM . This is the bi-lateral peering of autonomousEIM IM systems (Figure 1).

User 1 User 2 User 3 User 4 User 5 User 6 EIM EIM

User Company1 User 2 1User 3 User 4CompanyUser 5 User2 6

Figure 1: Federation between two EIM systems.

Company 1 Company 2

Figure 1: Federation between two EIM systems.

The third step is clearing house, the use of a trusted third party as a neutral enabler. Each autonomous IM system is connected to a central consolidated access point (the clearing house), and through that, onto other IM systems (Figure 2).

EIM EIM

User 1 User 2 User 3 User 4 User 5 User 6 EIM EIM Clearing House User 1CompanyUser 2 User 1 3 User 4 CompanyUser 5 User 2 6

Clearing House Company 1 Company 2 EIM

User 7 User 8 User 9 EIM

User 7CompanyUser 8 User 3 9

Figure 2: Clearing House. No direct federation between the three EIM systems. All communications pass through a central clearing house and all EIM systems can talk to each other.

Company 3

Figure 2: Clearing House. No direct federation between the three EIM systems. All communications pass through a central clearing house and all EIM systems can talk to each other.

5 The riddle of federation and clearing house by Chris Lamb The following examples of common interconnected systems illustrate the concepts of federation 4. Federation and and clearing house. clearing house in action Posting a letter The delivery of a letter from the US to the UK uses a federated connection. The United States Postal Service (USPS, an autonomous system in the US) and Royal (an autonomous system in the UK) have a bi-lateral peering relationship between them.

The agreed rules allow each service to deliver the other’s mail, with connection points and established rates of reimbursement. The USPS reimburses Royal Mail to deliver the letter to a UK address, and vice versa (which is part of the reason why the cost of sending a letter internationally is higher than domestic mailing). This arrangement has all of the attributes of a federated connection:

• established hand-off points.

• established ways to communicate and manage the relationship.

• reimbursement for delivery into the target country.

• policy and rules of engagement, for instance, disallowed items (e.g. explosive materials).

• methods for handling errors and exceptions (e.g. return to sender).

Federation allows two independent networks to connect and team in a predictable manner. Although each system remains autonomous, they provide a seamless end-to-end experience.

The US automated clearing house system

Because federation is bi-lateral, each partner must agree one-on-one with every other partner. This model breaks down when the number of partners becomes too large, the so-called n-squared problem. Federating ten partners requires forty five interconnect agreements. Federating 100 partners requires 4,950 interconnect agreements.

The alternative is a multi-lateral approach, a clearing house.

The US Federal Reserve banking system serves as an example. With tens of thousands of banks in the US, it would be impossible for checks to clear if each bank had to have a separate bi-lateral agreement with every other bank.

The ensuing anarchy would make Times Square look like a Zen garden.

In this situation, the only approach is to have a central conduit, the Automated Clearing House. All checks clear through a single clearing house as they pass from the originating bank to the destination bank. Member banks have a consolidated connection to the network. The Federal Reserve Bank is a trusted third-party intermediary that clears checks between all member banks. In addition to simplification, another major benefit of a clearing house is a harmonised policy across all participants: everybody plays by the same rules.

6 The riddle of federation and clearing house by Chris Lamb If there is a unifying theme for IM connectivity, it is an overwhelming demand to expand the 5. The evolution of scope of connectivity as broadly and as quickly as possible, while avoiding the problems plaguing email. We believe this evolution will have three main phases: connectivity • Connectivity: Public IM connectivity (2006 – 2008) • Federation: Enterprise IM access to communities (2008 – 2009) • Clearing House: any-to-any connectivity (2009 and beyond) Let us consider these phases in detail.

Public IM connectivity The current stage of evolution is that Enterprise IM products now offer connectivity to specific Public IM networks. In a major advance for an industry divided by technologies and fragmented by warring factions, Reuters pioneered Public IM connectivity as early as 2003 by negotiating agreements with AOL Instant Messenger and MSN Messenger (currently Windows Live Messenger). Envisaging the value in bridging these communities, Reuters created a new business model based on subscriber connectivity fees. This change in perspective was vital: by providing Public IM networks with an alternative to advertising-based revenue, the Reuters agreements legitimised a new business approach. Prior to these, connecting between IM networks was unimaginable. The Reuters connectivity agreements were copied by Microsoft and IBM, who now deliver Public IM Connectivity as part of their EIM offerings. More recently, Public IM networks, Yahoo! Messenger and Live Messenger have connected their networks. While it is a step forward, Public IM connectivity has number of limitations for business users. Most of these originate from the limitations of the underlying Public IM networks themselves. For this reason, we anticipate the industry will continue to evolve. Briefly, the limitations are: • transmission across the Public IM network is unencrypted and thus, not secure. • there is a lack of an authenticated name space. Public IM screen names do not tie a user to an organisation, which undermines confidence. • public IM clients are not designed to integrate with enterprise applications and into the business workflow. They are consumer products that carry advertising. Although some third parties have developed their own clients to offer workflow integration, the Public IM networks treat third party clients as unsupported and consider them to be rogue offerings. • most troubling is that the rogue client vendors cannot guarantee continued compatibility with the underlying Public IM network. Periodically, Public IM networks change their communications protocols without notice. Since the Public IM network provider is not gaining any subscription revenue, there is no business incentive to inform the rogue vendor. This creates an awkward stand-off, which can leave IM users in the lurch. The sudden loss of access to the trading community because of a sudden incompatibility is not a risk that a financial trader can afford to take. • there has been no comprehensive integration with compliance systems, an increasingly important requirement for electronic business communications in the US, UK, and elsewhere. In some cases, even if there is a deployed compliance system in place (such as FaceTime IMAuditor or Symantec IM Logic), enterprises are still at risk. They are vulnerable to users who bypass these systems when they log-in to their Public IM accounts from places outside the corporate network, such as hotel rooms, airports, or home. Reuters addresses this problem with a hosted compliance service and a capability called enforced logging, which compels users to utilise monitored connections. Given all of these limitations, it is only a matter of time before companies mandate that their users utilise native clients running on business-grade services, such as Reuters Messaging. Business users require business quality and business-grade reliability.

7 The riddle of federation and clearing house by Chris Lamb 5. The evolution of connectivity Enterprise IM access to communities cont’d The second stage of the evolution, which is already beginning, is the move to federation. Until recently when a lingua franca emerged, the proliferation of different standards and proprietary techniques – a legacy of early network fragmentation – inhibited this step. In 2005, Microsoft released LCS 2005 Service Pack 1 (LCS 2005 SP1). This contained a network server called an access proxy (AP) that provides a basis to federate one autonomous LCS system with other like systems. Suddenly, the rudiments existed for building a viable federation and clearing-house offering. Acting on this, in 2006 Reuters launched RM 6, based on LCS 2005 SP1. Importantly, the LCS 2005 SP1 has two capabilities that raise it to business grade. First, it contains a security model built on Mutual Transport Layer Security (MTLS) for the exchange of certificates. Second, traffic on the federated links is encrypted. The actual protocol between the access proxies is Session Initiation Protocol/Session Initiation Protocol for Instant Messaging and Presence Leveraging Extensions (SIP/SIMPLE), with some proprietary extensions. LCS allows for three different modes of federation: • direct federation • restricted enhanced federation • unrestricted enhanced federation With direct federation, the network is locked down. This is the most secure federation mode. Users can federate out from their native system only to users on other sanctioned LCS systems. IT must manually configure the AP-to-AP connection for each sanctioned external LCS system. Unsanctioned LCS systems trying to federate into the native LCS network will be rejected. With restricted enhanced federation, the network opens up slightly. The essential difference between this and direct federation is that sanctioning is controlled on a domain name basis and not based on specific AP addresses. This allows for more flexibility as AP addresses in the network are added and changed. So users can federate with external LCS systems that have domain names in a sanctioned list. It is not necessary for IT to configure manually the AP address. The conversion of a domain name to a specific AP address uses a mechanism calledSRV DNS, which is similar to how a web browser converts a URL to an IP address. Additionally, incoming federation requests from external sanctioned LCS domains are accepted. Finally, unrestricted enhanced federation does not require a list of domains. It allows federation with any domain that has a valid SRV. In all three modes, the LCS systems exchange MTLS certificates and encrypt their communication. For more detail, please see the Microsoft Live Communications Server 2005 with Service Pack 1 Technical Overview*. Though rudimentary in nature, LCS federation has provided the basic capabilities to manage connections between autonomous systems. Perhaps more importantly, Microsoft has the market clout to drive LCS federation as an industry standard. Because Reuters Messaging is built on Microsoft messaging technology, we can deliver on these capabilities.

* http://www.microsoft.com/technet/prodtechnol/office/livecomm/library/sp1techoverview/lcssto_1.mspx

8 The riddle of federation and clearing house by Chris Lamb 5. The evolution of connectivity The advantages of federation cont’d Federation delivers all the underlying benefits for business-grade IM service: • secure connections for encrypted transmissions, based on the exchange of publicly signed certificates • accountable entities provide the confidence of known organisations and a way to resolve issues; federated systems are tied to business entities that either have a public record (via SRV DNS record lookup), or have addresses manually added to a mapped list of federated domains • no more dubious users, such as those found on Public IM (e.g. [email protected]); instead, identified users are tied to a corporate domain (e.g. [email protected]); federated systems are usually corporate entities with tight controls of their user bases, and not open to public user registration • lower business and legal risk, because communication between users of federated EIM systems is subject to the respective parties’ regulatory compliance framework In 2007, Reuters Messaging began federating with a number of deployed Enterprise IM networks. Most of these organisations are in the financial markets with LCS installations, and they need to gain access to the Reuters Messaging community. In some cases, our federation even connects different groups of users within the same financial firm. Typically, front-office staff, such as traders needing access to the trading community and to Reuters market data, use Reuters Messaging, while back-office staff use a deployed Enterprise IM system federated with Reuters Messaging.

The limitations of federation Unfortunately, due to a number of constraints, federation can only take the industry part of the way to ubiquitous connectivity. Federation works best when connecting to a limited number of partners, because the n-squared problem limits the practicality of federation within large groups. The problem is more complex than just permutations. Because there is no aggregation of connections and no harmonisation of policy, most IT organisations are unable to support a large number of interconnecting partners. Each federation connection raises specific issues that need to be resolved one-on-one: interconnectivity policy, the security model, performance metrics, service level agreements, and other hand-off issues must be negotiated bi-laterally between the parties. Federating whilst ignoring these considerations is as safe as flying into the right airport, but landing on the wrong runway, and in the wrong direction. Moreover, with federation, companies are forced into direct connections with rivals. Many organisations prefer to avoid this type of “co-opetition” and connect with a third-party intermediary in order to reduce potential exposures. Nevertheless, federation is a useful, and even necessary, interim step while the industry finds its sea-legs. While it may be tempting to skip federation and move directly to clearing house, as a practical matter, connectivity needs to evolve in steps to allow the industry to grapple with the dormant surprises sure to rear their ugly heads.

9 The riddle of federation and clearing house by Chris Lamb 5. The evolution of connectivity Clearing house cont’d The phase that will see all these problems resolved is the clearing house, which offers ubiquitous connectivity, prophylactic protection, and business simplicity. A clearing house service will not only connect Enterprise IM systems to the RM community, it will also connect autonomous EIM systems to each other. The primary motivation for connecting via a clearing house is business simplification in many forms: Fewer connections. The number of federated connections gets reduced to one. In itself, this is ample justification to move to connecting via a clearing house. Harmonised policy. This is where the real value emerges. The scaling issue vanishes since there is no bi-lateral connectivity. Because there is only one interconnection point, all policy converges to the largest common denominator. In fact, many Enterprise IM systems will be forced to use a clearing house, since they cannot support multiple simultaneous policy models. As with any existing clearing-house network – the Federal Reserve, the Swift Banking network, Visa International – members have to adhere to a common set of rules and regulations. Third-party intermediary. In many industries, third-party intermediaries play an important role both separating and unifying industry participants, who are often rivals. A third-party intermediary is especially important for competitors in financial services who are forced into working together, for instance, investment banks working collectively on a syndicated deal. Our customers have indicated that they would rather connect through a third party than directly with potential foes. Reuters is willing and able to play this role, as we do already with the collection, analysis, and distribution of securities pricing information. Transitive trust extends trust through the clearing house to other domains. Organisations can connect to other unknown parties precisely because they are connected through a trusted clearing house.

10 The riddle of federation and clearing house by Chris Lamb 5. The evolution of connectivity Distractions cont’d There are several issues that have created a lot of industry buzz in the IM space. However, until connectivity has been addressed successfully, we believe that the following issues are distractions.

Differentiated presence This is the ability to be selective in providing different presence information to different classes of IM contacts; key contacts know that you are available, but others see you as busy. We believe differentiated presence is too nuanced in a world that simply needs to connect. Most users are not ready to comprehend, much less manage, differentiated presence at this time. The concept is abstract and immaterial in a world that lacks ubiquitous connectivity.

Rich presence This is the integration of presence from multiple communications devices: IM, cell phones, PBX phones, wireline phones, Global Positioning System devices and so on. We are not optimistic that this integration will take place, for several reasons: • IT within companies deploying Enterprise IM is not ready to tackle the management of rich presence. • at this time, users do not understand rich presence due to of lack of a relevant practical application context. • presence information is “owned” by multiple service providers, none of whom is willing to pass it to potential rivals. For telephone carriers specifically, sharing anything is anathema. Traditionally, they have built businesses based on proprietary lock-outs; witness the US mobile phone carriers’ attempts to thwart third parties from offering unlock codes for mobile phones. Integrating presence among these warring parties is a Sisyphean task. In the end, we believe these old modes of communication will be subsumed by new presence-enabled modes (IM, Social Networking and the like). Legacy telephone carriers will be left fighting over table scraps as business workflow consolidates around new presence-enabled modes of communication.

Directory federation In theory, the connection of active directories sounds wonderful, but in practice, competitors who have to collaborate — investment bankers on a syndicated deal — will never share their internal directories, out of general distrust. Instead, we expect abridged directory information to be offered to a clearing house, in much the same way that public companies provide the names and titles of officers and directors to the Securities and Exchange Commission. Collaborative connections will be made by individuals, similar to the model of Linked In, Facebook, and MySpace. Transitive trust at an individual level will allow members to hopscotch their way across the extended web of connections.

11 The riddle of federation and clearing house by Chris Lamb To be credible, a clearing house must deliver a set of capabilities worthy of this important 6. Core assets for industry role. Reuters has all of these assets and is positioned for this leading role. delivering clearing Trusted brand house capabilities The organisation must offer a trusted brand. A number of start-ups have attempted to enter the clearing house business and have failed, because they were unknown entities. No CIO is willing to stake his career on an unknown start-up. A world-class brand is paramount.

Financial stability As the hub of the community, a clearing house must be in it for the long haul. The community cannot survive the demise of a clearing house.

Free from coercion A clearing house must be free from coercion and even the perception of coercion.

Treat all parties equitably and fairly Given its role as an intermediary, a clearing house must treat all parties equitably and fairly. Disputes are sure to arise, and the clearing house must play a facilitative and mediating role between the disagreeing parties, and have the muscle to enforce the resulting outcomes.

Independence, integrity, and freedom The ability to provide data, news and services according to these ideals is incorporated into the Reuters Trust Principles.

High Availability Service Provider Offering a reliable and highly available service with business continuity is an essential ingredient, not a business for rookies. No company can afford to choose a service provider with a spotty service record. The importance of the function is too high to trust clearing house to a second-tier player.

12 The riddle of federation and clearing house by Chris Lamb Organisations looking to federate need to prepare appropriately. Much of the angst with the 7. Preparing for initial deployment comes from the lack of industry experience and the lack of an engagement model. Although Microsoft has provided the mechanism to federate (through LCS 2005 SP1), the the transition question arises, “What now?” Business needs will have to drive any federation strategy. The fundamental question is who needs to federate and why? In the context of the financial markets, our customers tell us that Enterprise IM is now being deployed in their mid-office and back-office. These users need to federate with the trading desk teams, who in turn need access to the wider financial community, much of which runs on Reuters Messaging. Reuters offers a federation service between deployed EIM systems and Reuters Messaging, giving a company pervasive IM connectivity, while simultaneously allowing connections to the financial community. Once the needs and use-scenarios have been defined, IT managers need to address policy questions:

Do I want to allow just anyone to federate into my EIM system? Probably not. One of the values of federating into the Reuters Messaging community is to obtain community access, while keeping the network locked down to other federation overtures. RM is a tightly controlled and provisioned community with authenticated names.

Do I want to federate with my competitors? Again, probably not. From time to time, you may want to collaborate with your competitors – teaming on a specific deal – but direct federation may place your network at risk. Direct connection is also politically unpalatable. In this scenario, a trusted third-party clearing house is your best option.

How can I be sure that my federation policy and compliance policy are consistent? Having a business strategy that incorporates both compliance policy and federation policy is vital. Our customers have told us that one of the reasons they want hosted compliance from Reuters is that it applies universally to all users. Crafty users cannot bypass it, as they can when using a public IM service from a computer not attached to the corporate network. Similarly, integrating compliance and federation policies, such as actively preventing certain individuals or functions (e.g. investment bankers and financial analysts) from contacting each other, is another important consideration. In general, it is best to “walk before you run.” Reuters has a phased connectivity strategy, starting with Public IM connectivity, moving to federation, and finally to clearing house. Many of our customers are moving through these phases, getting comfortable with the concept of connecting their IM systems to an ever-expanding circle to other organisations.

13 The riddle of federation and clearing house by Chris Lamb Despite the fragmented nature of current IM networks, it is clear that IM does have a future in 8. Conclusion which pervasive connectivity is available without the wild-west risks bedevilling email. The causes of IM’s balkanisation are largely anachronistic. Today we have the motive and the means to work towards a future that provides broad connectivity and mitigated exposure. You can trust the Reuters brand, its strength, and its roadmap to get you there safely.

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14 The riddle of federation and clearing house by Chris Lamb