The concept of "presence", in software, is a status indicator that conveys ability and willingness of a potential communication partner.  Presence is usually associated with instant messaging.  For example,  someone might set their status to "Away", "Busy", or "Out To Lunch".  In this way, instant messaging users can tell whether their friends are available to chat.  Often, this is represented by color indicators.  Other systems use icons, such as a phone to indicate the user is busy, talking on the phone.  Whereas some systems have a preset list for status, other systems allow users to create custom status.  So, someone might have their status set to "Studying at the University of MD".  Taking this a step further, some systems allow a constant feed of presence information to other users or "subscribers".


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
From Wikipedia: 
 
In computer and telecommunications networks, presence information is a status indicator that conveys ability and willingness of a potential communication partner - for example a user to communicate. A user's client provides presence information (presence state) via a network connection to a presence service, which is stored in what constitutes his personal availability record (called a presentity) and can be made available for distribution to other users (called watchers) to convey his availability for communication. Presence information has wide application in many communication services and is one of the innovations driving the popularity of instant messaging or recent implementations of voice over IP clients. A user client may publish a presence state to indicate its current communication status. This published state informs others that wish to contact the user of his availability and willingness to communicate. The most common use of presence today is to display an indicator icon on instant messaging clients, typically from a choice of graphic symbol with an easy-to-convey meaning, and a list of corresponding text descriptions of each of the states. Even when technically not the same, the "on-hook" or "off-hook" state of called telephone is an analogy, as long as the caller receives a distinctive tone indicating unavailability or availability.

Common states on the user's availability are "free for chat", "busy", "away", "do not disturb", "out to lunch". Such states exist in many variations across different modern instant messaging clients. Current standards support a rich choice of additional presence attributes that can be used for presence information, such as user mood, location, or free text status.