Microsoft on Thursday said it will acquire Groove Networks and make Groove's founder, Ray Ozzie, a chief technical officer at the software giant.
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, Washington, headquarters and at Groove's current home base in Beverly, Massachusetts, 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 on 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 organisation, which now has nearly 200 employees, will continue to work out of its existing location in Massachusetts.
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 few months, the company has shifted its sales strategy from making large companywide deals to selling smaller projects to smaller organisations and to individual departments within big companies, according to a representative.
In an interview one year ago, Ozzie said the company's intention from the beginning was to remain independent and become a public company.
But on Thursday, Ozzie said joining Microsoft will help Groove realise its vision of giving dispersed teams of workers better collaboration tools.
"[I] have an opportunity to contribute some of what I've learned — both the things that have worked and the mistakes I've made — to Microsoft's corporate-wide offerings, both information worker and related supporting infrastructure," Ozzie said.
Raikes said that the timing for the transaction was driven by Microsoft's growing interest in collaboration and by requests from several customers who suggested that Microsoft tighten its ties with Groove.
"It was the combination of that [customer] feedback and the opportunity we see in having more powerful collaboration offerings going forward — that was the tipping point," Raikes said.
Microsoft's two other chief technical officers are David Vaskevitch, who focuses on business applications, and Craig Mundie, who deals with emerging technologies, such as embedded computing, and government policies.
