Next fall, the company plans an updated LCS server, code-named Vienna, that will offer improved support of federation between servers at separate sites, said sources familiar with the plans. Currently, interoperability between distributed LCS servers requires a special connector, but the results are spotty, solution provider partners say. LCS provides what Microsoft calls "secure instant messaging."

On the heels of Vienna, plans also call for a new LCS client, code-named Istanbul. That software will be completely rewritten in C# and add support for Microsoft's Ring Cam, according to sources familiar with the plan.

Over the longer term, a new server due to ship in 2005--code-named Kiev--promises full integration of LCS with Live Meeting and offers links to Microsoft's upcoming Longhorn operating system, sources said. To date, Live Meeting has been a Web-based conferencing system available as a paid service.

Converging the Microsoft-centric LCS--once known as Greenwich and then as Real-Time Collaboration Server--and Live Meeting won't be a trivial task. Microsoft acquired the Live Meeting technology with its acquisition of PlaceWare a little more than a year ago. PlaceWare offered hosted Web conferencing, and its servers were based on the distinctly non-Microsoft world of Java and Unix. Since that time, Microsoft executives have said that they continue to see Live Meeting as a hosted system.

A Microsoft spokesman declined to comment on the product plans (for more about Microsoft's realtime collaboration strategy, see related story).

PAULA ROONEY contributed to this story.