A couple of weeks ago, on March 10, 2005, Microsoft announced that it would acquire Beverly, Massachusetts, software company Groove Networks and would hire Groove's founder, Ray Ozzie, as Microsoft's Chief Technology Officer (CTO). What's significant in this news event is that we are witnessing Microsoft's awakening to its need to move beyond straight-line, product-based solutions to fulfill corporations' requirements for collaborative services that reach beyond ad hoc document and file sharing.

What Is Groove Networks?

Groove Networks' primary product is Groove Virtual Office. Groove Virtual Office allows users to readily share and integrate Microsoft Office products across the Internet. This includes coordinating Microsoft Outlook PIMs, Word and Excel documents, and other files in a peer-to-peer network, much the way that Napster-like software shares music, video, and other files among peer-to-peer connected users across the Internet.

In the current environment, Groove Networks provides the servers to establish and maintain the presence awareness of other users. However, the communication and sharing of information between users is strictly peer-to-peer, so theoretically the maximum storage space allowed by the network is limited only by the total available space of all the disk drives of connected users. This enables users to build networks of shared files and applications that could potentially rival the size of centralized systems of corporate mainframes.

Groove Networks also sells server software and interface tools so that software developers can enable their software applications to hook into the Groove Virtual Office.

History Repeats

So why is Microsoft's purchase of Groove Networks so significant? Consider what Lotus Notes did for the Lotus organization and how it transformed IBM's vision of the desktop and collaborative computing.

Lotus Notes, you may remember, was originally a product developed by Iris Software, which was under contract to Lotus specifically to build the Notes product. (See "The Once and Future Domino.") Ozzie was the founder of Iris Software and one of the original developers of the Computer-Based Education Research Laboratory (CERL) PLATO Group Notes back in 1973. Ozzie later became the driving technical and creative force within Iris Software that transformed Lotus Notes from a pre-Internet email application into a workflow/knowledge management collaborative suite.

Of course, Lotus Notes got a big jumpstart into corporations because many of those organizations back in the early 1990s were still using the Lotus 1-2-3 spreadsheet application. Lotus introduced those organizations to the idea of collaboration, and once corporations saw the opportunities that Lotus Notes provided for developing quick workflow applications, they latched onto it.

Lotus subsequently bought out Ozzie's Iris Software, and then IBM bought Lotus. After several years, Ozzie left the team and started Groove Networks. In the meantime, he had become an industry icon as Lotus Notes/Domino spread to over six million users.

In a way, history is repeating itself: Ozzie has found himself once again selling his small, creative software team to yet another mega-corporation.

Microsoft and Ozzie

Yet, as recently as January of this year, Ozzie appeared at Lotusphere in Orlando as IBM's guest keynote speaker, touting the amazing vibrancy of the Notes/Domino community. Listening to Ozzie talk, one had the impression that he was truly overwhelmed by the changes that the Notes/Domino product line was undergoing. What started out as a simple collaborative application has transformed IBM from a "heavy metal" computing giant into an agile supplier of collaboration suites.

Moreover, Ozzie must have been bemused by the sudden reinvestment IBM is making in the Lotus product line. IBM is now taking key elements of Lotus Notes/Domino and transforming them into a new open standards product brand that it calls IBM Workplace. IBM Workplace is now the strategic mechanism by which IBM will deliver the user interface of its On Demand infrastructure to the customer desktop.

Looking out at the assembled audience of thousands of users and developers at Lotusphere, Ozzie seemed vaguely hesitant in his address. Perhaps he was wistfully thinking back to the days when he was still driving the Lotus Notes/Domino vision. Or perhaps he was taking one last look at the user base that he and his team had created. For certainly negotiations were well underway between Groove Networks and Microsoft. And certainly, Ozzie knew that his move to CTO of Microsoft would be seen as a kind of Lotus Notes/Domino betrayal by loyal fans.

But Microsoft and Ozzie already had a long relationship, and indeed, Microsoft had provided some of the venture capital to help Ozzie start Groove Networks. So, if there is blame for Ozzie's defection from the Lotus camp, it must truly rest with IBM, which seemed more interested in using Ozzie as a figurehead than allowing him any real input into the product development of IBM Workplace.

Getting into Microsoft's Groove

Certainly, what's on everybody's mind, is the question of what Ozzie can do as a CTO within Microsoft. Will he be able to spur the organization to build the peer-to-peer collaborative environment that can rival the success of the IBM Lotus brand?

More significantly, can Ozzie help Microsoft understand that it must look beyond simple quantitative product excellence? Can he help Microsoft reach out to corporate IT to provide real-world problem-solving tools, much the way Iris Software built an application development platform out of an email tool?

That's the philosophy that Iris Software had when it was developing Lotus Notes as a collaborative suite: Work with the users until they get what they need! That's what Microsoft failed to do with Microsoft Exchange Server, still treating user requests with disdain and distaste. Ozzie's team within Lotus established www.notes.net, which was an interactive forum to solicit customer response. (IBM subsequently used that forum as a model for interacting with customers and developers.)

If anyone can help Microsoft transform, Ozzie is probably the man. And if he succeeds, suddenly IBM may actually have some serious competition in the collaborative On Demand market space.

Thomas M. Stockwell is Editor in Chief of MC Press Online, LP.