March 10, 2005 11:45 AM PST

Microsoft to buy Groove Networks

Microsoft on Thursday said it will acquire Groove Networks and make Groove's founder, Ray Ozzie, a chief technical officer at the software giant.

Ray Ozzie
Ray Ozzie
Founder, Groove

Microsoft said it will incorporate Groove's "virtual office" collaboration software into its Office line of productivity applications. Ozzie, the inventor of Lotus Notes and a collaboration guru, will report to Bill Gates, Microsoft's chairman and chief software architect.

Ozzie will be one of three chief technology officers for Microsoft. He'll be in charge of information worker software and collaboration tools, and he'll work both at Microsoft's Redmond, Wash., headquarters and at Groove's current home base in Beverly, Mass., which is north of Boston.

Gates lauded the advances Groove has accomplished in collaboration for Microsoft Office and said that Ozzie's expertise in other areas, notably security, authentication and peer-to-peer computing, will be brought to bear in other Microsoft products, including the forthcoming Longhorn edition of Windows.

"I thought about 'Could we ever hire Ray and his team?' for a long, long time. So it's a big, big day for me that this is finally taking place," Gates said during a conference call Thursday. "The Groove product really has some fantastic and very unique features."

Microsoft was an investor in Groove, which has closely tied its collaboration software to Windows and other Microsoft products.

Microsoft said the Groove group will become part of its Information Worker division. The acquisition is expected to close in the second quarter. Terms of the deal were not disclosed.

Groove was founded in 1997 to create productivity software for groups of information workers. The organization, which now has nearly 200 employees, will continue to work out of its existing location in Massachusetts.

"To some extent, Microsoft has had a shotgun approach to collaboration. It's not clear to me which of Microsoft's approaches...will be a winner."
-- Paul DeGroot
Analyst, Directions on Microsoft

Microsoft intends to keep the Groove facility and may expand its operations in the area, said Jeff Raikes, group vice president of Microsoft's Information Worker group. Ozzie, Raikes and other Microsoft executives announced the acquisition to Groove employees at their office Thursday morning. No layoffs at Groove are planned.

Called Groove Virtual Office, the company's software lets people from different companies collaborate by working over secure Internet connections. The product uses a peer-to-peer design in which individual PCs can communicate directly with one another to share documents or communicate via instant messaging.

The software has been sold as an add-on to Microsoft's SharePoint Web portal software because it lets mobile workers get updates on ongoing projects without having to use a virtual private network.

Groove has customers in government agencies and large corporations looking for better information-sharing tools. In the past several months, the company has shifted its sales strategy from making large,

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9 comments

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No Surprise Surprise ...!
Having tracked Groove for the last three years this does not come as a surprise. Notes was always a product that Microsoft feared as a killer-app and the slow death of Notes was a great relief.

Ray Ozzie like many others decided if you cannot beat them join them. He designed Groove to be an office compatible app from the start. Maybe now the collaboration and communication mess in MS will finally be resolved by Ozzie (new CTO).

Another company that I think will go this way is MindMap and maybe even Salesforce if Microsoft CRM doesn't get going soon!
Posted by (2 comments )
Reply Link Flag
Another weak collaboration tool
Peer-to-peer, chat, IM, email, file sharing, on-line meetings... they are all just pushing bits from point A to point B. People often have face-to-face meetings without accomplishing that much.

The key is not to just communicate, but to actually collaborate, and that requires that people actually get down to the meaning of the thing that they are working on.

A really interesting and useful collaboration tool for software developers is ReadySET Pro (<a class="jive-link-external" href="http://www.readysetpro.com/" target="_newWindow">http://www.readysetpro.com/</a>). It actually gives teams a big head start on formulating their use cases, test cases, security plans, requirements documents, design documents, and project plans.
Posted by (4 comments )
Reply Link Flag
Groove is not the end
&lt;&lt;The key is not to just communicate, but to actually collaborate, and that requires that people actually get down to the meaning of the thing that they are working on.&gt;&gt;

You make valid points, yet seem to be suggesting that Microsoft is going to rebrand and sell Groove as it exists. The article clearly states that this product will be handled through the Microsoft philosophy of "embrace and extend." On page 1 of the article, it is stated that the new functionality will be integrated with SharePoint. Since SharePoint already represents an application that allows people to collaborate, communicate, and share more than words, groove is merely another handy piece of the puzzle that is sharepoint. My hope, is that the sharepoint UI will be greatly simplified. It is still too confusing for simple users.
Posted by David Arbogast (1709 comments )
Link Flag
Slight Bias
Isn't Jason Robbins the creator of ReadySET? Is that you by any chance?
Posted by Andrew J Glina (1673 comments )
Link Flag
Groove Stinks
As a former Groove user, I can testify that my personal user experience with the tool sucked. Perhaps others had a better time with it - but noone at our company did. As near as I can tell, all Groove does is integrate the functionality of a number of other desktop applications in a cumbersome and very slow-to-use way. What's the point in avoiding VPN use if synchnozing your groove desktops takes an hour and half, and the groove application makes your entire system slow and unstable?

Good luck, Microsoft, in salvaging this white elephant of a technology. There's a reason groove's however many years of business have netted them a whopping 100 customers - everything this product does can be done by other technologies already that are stable and extensively deployed.
Posted by dreadsword (17 comments )
Reply Link Flag
MS Manual Information Workers
Any office worker who really knows how to leverage Linux, knows that a Linux box can be configured to be their automated Information Worker, while they concentrate all their time on higher level knowledge tasks.
MS is still pushing the old early 1980s bums-on-seats manual information systems, and will surely continue to loose market share as business discovers the increased productivity in deploying a desktop Linux system.
American businesses continue to be disadvantaged by the Gates designed desktop, and his company must take the lions share of responsibility for holding back the advancement of office computing, and by association the American economy, while he follows his dream of being the world's richest individual.
Thank common sense and social necessity for the Open Source initiative.
Posted by Stomfi (52 comments )
Reply Link Flag
reality check
There is a reason linux is not on desktops in corporates and it is because everything you described Linux sucks at. To suggest it is great at collaboration and automation or Information would have to be one of the biggest stretchs of truth I have ever heard.
Posted by (16 comments )
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