Microsoft buys Groove, gains Notes inventor Ozzie

Microsoft says the acquisition of Groove Networks is a cornerstone of its collaboration offering for the Office suite of applications. It also puts Lotus Notes creator Ray Ozzie in Bill Gates' inner circle.

Microsoft's acquisition of Groove Networks Inc. capped a week of product rollouts that are aimed at making the Office desktop productivity software more attractive as a collaborative front end for back-end server software.

The software maker said on Thursday it would buy the closely held Groove, a company in which Microsoft had already made an investment of $51 million. Terms of the deal, which will close in the second quarter, were not disclosed. Its founder, Ray Ozzie, a creator of IBM's Lotus Notes software, will become a Microsoft chief technology officer, focusing on communication and collaboration software, the company said.

Groove's main product, Virtual Office, is essentially a peer-to-peer, shared whiteboard space that allows for sharing regardless of content type. Microsoft has made it clear that it's moving its products in the direction of adding more to their collaborative capabilities. Earlier this week, the company announced plans for an updated version of its hosted Web conferencing software, an update to its instant messaging server and a new, integrated multimedia client.

The addition of Groove software to the Microsoft Office product line was described by Jeff Raikes, group vice president of productivity, as the "trifecta of collaboration -- the combination of real-time, server-based and peer-to-peer communications."

Groove may aid in server system changes
Some analysts see Microsoft's collaborative activities and the acquisition of Groove, Beverly, Mass., as more progress in making Microsoft Office a front end for business processes applications. But the way that Microsoft has tried to do this takes a long time and requires a tedious upgrade across the entire server system, said Dana Gardner, an analyst at Yankee Group Inc., a Boston consulting firm.

"By buying Groove, Microsoft can inject a larger collaboration and back-end service capability to the Office applications as a stop-gap measure, to hold onto Office applications as a primary interface while the ongoing modernization of the server system continues," Gardner said.

Some of Groove's capabilities are redundant with existing Microsoft collaborative tools, including Microsoft's SharePoint software, so it's still unclear how the product will impact the current technologies. In making the announcement, Bill Gates, Microsoft's chairman and chief software architect, said some the Groove features will be integrated with Microsoft's collaboration tools.

In addition, Gates said peer-to-peer communications will be a big part of the next version of Windows, code-named Longhorn, so it's likely that Groove technology will show up there too.

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