Many business people are choosing text-based instant messaging (IM) over phone calls and e-mail—preferring its immediacy and streamlined efficiency in getting real-time information from partners, suppliers and colleagues working remotely. Instant messaging is essentially the text version of a phone call. For many, it serves as a backstop for e-mail problems.

Dedicated solutions such as Campfire, from 37signals, brings benefits to businesses that work in teams or on projects because it enhances collaboration in a secure environment. Aside from the opportunities for time and cost savings, let’s see if there are risks and downsides.

What is Campfire and who is it for?

Campfire is a Web-based group chat tool that lets businesses set up password-protected chat rooms quickly and easily without wrangling with instant messaging clients and services. You can invite a client, colleague, or vendor to collaborate in real time?perfect for making quick-fire decisions with multiple people without having to set up a conference call.

The major benefit of Campfire is that it slots right into 37signal’s insanely-good project management application, Basecamp, so you can assign projects to dedicated chat rooms. In addition, Campfire lets you upload files, which is ideal for updating projects on the fly.

Pricing & setup

Similar to any hosted software solution you don’t need to download, install, or configure anything (no costly IT support required). All you need is a Web browser and an Internet connection. It’s as simple as visiting a Web page. Campfire is even compatible with Apple’s iPhone, thanks to the software’s awesome API support.

Campfire is a pay-as-you-go service. There are no long term contracts or commitments. You simply pay month-to-month. If you cancel, you’ll be billed for the current month, but you won’t be billed again. And if you cancel a paying plan within 30 days of signing up, you won’t be charged a thing.

There are four subscription levels. The cheapest is Basic ($12/month), which is limited to 12 chatters (total number of people chatting across your account in all your rooms at one time) and 1GB storage (used for files). Next up is Plus ($24/month), which is capped at 25 chatters and 3GB storage, followed by Premium ($49/month), which extends to 60 chatters and 10GB storage. The service tops out with Max ($99/month), offering 100 chatters and 25GB storage.

You can change plans at any time, and if you change you don’t lose a thing. The upgrade is instant and all your old chats and files are still available to you. Frustratingly, Campfire doesn’t make it obvious that there’s a free version?you’ll only spot the downgrade option when you log into your account. Sure it’s limited to 4 chatters and 10MB storage space, but it’s a great add-on for small teams using Basecamp.

Does it do it well?

Instant messaging is brilliant for one-on-one chats, but it’s not ideal for groups of three or more. Furthermore, if you’re on MSN and your co-worker is on Skype, you can’t chat. Campfire is network-agnostic and built from the ground up for teams and groups. More importantly, Campfire chats are password protected from prying eyes—you set up the rooms, you decide who you invite, and you specify who can see which rooms. Plus, Premium and Max accounts also include 128-bit SSL security (same used by banks).

Campfire is unlike ‘traditional’ chat room software designed for consumers. It’s built on the same professional interface as Basecamp, so it’s intuitive and all features are easily accessible. The basics such as time zone, logos and header colour scheme can be personalised, and Admins can view files uploaded by users and search chat transcripts (all chat sessions are automatically saved) based on the room, person, or day.

Admin’s can also ‘lock’ a room. Once a room is locked, nobody else can enter the room and the conversation is held ‘off the record’—the conversation will not be archived if the room is locked. They can delete transcripts, invite new members, delete members, and restrict members to certain rooms. They can also rename and delete rooms. There’s a search box for pinpointing people and subjects, too, along with visual feedback on file space used (%).

Rooms are easy to navigate and being able to see when a room was last visited (and by whom) is always useful. You can scroll up to see conversations that were had before you arrived, and your own comments are highlighted in yellow for easy reference. Posting a message is a snap, and you can toggle audio alerts buy clicking a speaker icon.

Guest access allows you to invite users to a room temporarily. Turning this feature on generates a URL which you can share with anyone. Having a permanent link to a real-time chat room gives Admin a lot of flexibility. Uploading a file is a snap and if you upload a GIF, PNG, or JPEG image it actually appears in the chat window, which is useful because users don’t need to open an image editor.

Where does Campfire disappoint?

Pricing—make sure you keep a tabs on who wants access to your chat rooms before you sign up. Remember that there is not a limitation per room, but an aggregate across all rooms. For example, 65 people may have accounts in your system, but if you’re on the Plus plan only 25 of them can be in your chat rooms simultaneously.

You also need to be careful when integrating Basecamp with Campfire. Your trusted Basecamp users will be treated as guests in Campfire and the guest access will automatically be turned on in your Campfire chat room (potentially opening up the room to the public). This seems like a bad security flaw. Integration in Basecamp is also a bit limited, requiring users to click the Chat tab to see any new discussions. What would be nice is to have a small iFrame on all Basecamp pages with a chat window.

A daily digest would also be an excellent add-on for Campfire, as would the facility to download transcripts. To ‘download’ a transcript you have to either copy the page source and paste into a HTML editor or copy the page and paste into a word processor. Both work but are clunky. And since the transcripts are specific to individual days, downloading weeks’ worth of transcripts is a nightmare. We are amazed this feature isn’t included as standard. It would also be awesome if there was some way of notifying users (especially Admins) that there are new messages.

Would we recommend Campfire?

We were sceptical at first, especially as chat software can be intrusive in the workplace. But after using Campfire for a month or so it turned out to be much effective than we anticipated. Above all, Campfire helps teams to communicate better—emails from multiple people are too darn hard to follow if threads aren’t maintained.

Campfire allows everyone involved in a team or a project to participate in discussions throughout the day. For instance, managers can alert team members when new issues crop up, or provide clarification on new projects. Campfire’s flexibility is widespreading, and thanks to third-party Windows and Mac OS X desktop programs, widgets and more, extended functionality can only improve.

Campfire is an exciting communications solution for switched-on businesses and is almost an essential add-on for Basecamp users. It’s not perfect—most notably the lack of new message alerting and transcribe downloading—and, sure, you’ll have to force some conversations back on track, but you’ll be able to have fun and get work done at the same time in a safe environment. 37signals knows business.