The Bloor Perspective: IM on the march, HSBC in China, and IT services ups and downs

If ever confirmation was needed, a whole range of product developments are hitting the streets is heightening the importance of instant messaging (IM) to businesses.

Presence is an interesting subject area here. It seems so very simple that an individual is either online and present or not. However, the way we manage our presence is becoming an important issue for IM users. A quick look at the free products from AOL, MSN and Yahoo! shows how presence can be managed. Manually, users can change their online status so they appear as busy, available or even pretend to be offline.

The concept of presence is a key element of the Greenwich initiative that aims to embed IM and presence into operating systems. This is something Microsoft has signed up for and it should allow us to develop some basic rules that will automate our presence status depending upon the activity that is taking place. That way, if there are certain tasks that shouldn't be interrupted, the presence status can change automatically to tell others we are busy.

Standards are being developed to allow IM tools to work together. Along with this, IBM is releasing new versions of its SameTime IM solution along with the QuickPlace team collaboration tools with the aim of bringing them into line with WebSphere architectures.

This is recognition that IM will not just be a user-oriented solution but we will soon see applications exchanging information through instant messages.

Also announced last week was a new version of divine MindAlign 2002 allowing IM windows to be embedded into browsers. This gives a simple mechanism for sharing information outside the corporate firewall.

Yet another important player in the commercial IM space is Jabber. This is an open source-style solution that offers an extensible core upon which tailored solutions are built.
All of this confirms IM is going to be big news - if it isn't already - and that the tools on offer are already working towards common standards and the need for applications to share information.

*HSBC does mainland China, virtually*

HSBC pulled off a remarkable coup last week when it scooped one of the three available licences to deliver e-banking services to the Chinese, as only the second foreign bank to make a play for the expectedly huge Chinese market.

The licence, granted by the People's Bank of China, the central bank, enables HSBC to deliver online banking services to the Chinese population. This will include everything from opening and managing a deposit account to the transference of funds from one local bank to an overseas account.

HSBC, with its current as the world's local bank, has long had ambitions for China and its rumoured $1tr savings opportunity. Late last year it bought a stake in the Bank of Shanghai, primarily to tap into a wealth of knowledge about the locality and to shore up its presence there. It has done roaring trade in Hong Kong for the past couple of years too and the majority of this has been done online.

HSBC now claims to have at least 50 per cent of Hong Kong banking customers using its operations. The success has helped HSBC take its online customer base to more than 3.5 million globally. So, presumably, it knows what it's doing.

The opportunity in China has only come about recently - since the country joined the WTO last year - as banking restrictions have been relaxed. It won't be plain sailing, however. For at least the next couple of years HSBC won't be able to handle local currency transactions, as it might with a standard current account for the population, or operate brokerage services.

Some analysts are already questioning whether or not the move will be a profitable one. More likely, they say, is that it's a speculative move on a potentially enormous market. Whichever one, there's no doubt it will be an exciting and educational period for HSBC. Being at the heart of the internet revolution, as the barriers come down in a country as vast and powerful as China, is something most firms can only dream about.

*Services*

In the last few weeks we've seen differing views of the IT services market from EDS and HP. EDS first put the frighteners on the stock market with its announcement the IT services market has stopped dead in its tracks. A week later, HP declared that, even with current economic conditions, the market is still showing demand.

While the current economic uncertainty may be stalling buying decisions, the positive economics of outsourcing remain, and so the EDS view that the world has stopped turning is interesting. IBM Global Services is not without its difficulties at the moment - once the main revenue stream of the company, Big Blue's services operation has not been so prosperous in recent quarters and while the PwC acquisition moves IBM up the food chain, there is still the integration to complete in difficult times.

Against this backdrop, it may seem surprising that Ann Livermore, head of HP's services business, announced: "We haven't seen demand change much over the last six to nine months." While admitting the current slump in demand is the worst she has seen in her 20 years in the business, Livermore claimed companies are still looking to save costs by using managed services. HP has every reason to be buoyant as the company recently signed its largest ever services contract with the Canadian Imperial Bank of Commerce worth $1.5bn.

Just recently Carly Fiorina, HP CEO, spoke at the HP World Conference and Expo. In her keynote, Carly said: "We are now in a much better position to serve you than we were a year ago. We think that other competitors are now reacting to us." While some may challenge the words, they cannot deny HP has kept up the flow of new products and partnership announcements since the Compaq deal was finalised.

How the gap between the EDS and HP view of the world can be explained is unsure. EDS is primarily a services business whereas HP has a variety of well-established and respected products behind it. The execution of the Compaq integration is progressing better than many expected, while EDS has become tainted through its involvement with WorldCom. The business world is a confusing place at the moment - a fact no better illustrated than through the eyes of these giants.

**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .