Microsoft buys Groove: World domination continues.

March 12, 2005
©2005 Rich Stillman, Waystation Partners

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The pundits have been burning up the Internet this week with articles about Microsoft's purchase of Groove Networks. Never mind that Microsoft has provided a major fraction of Groove's funding since 2001. A corporate purchase is the biggest statement Microsoft can make, whether they're doing it to integrate or suppress the technology of the company being bought. In this case, it's pretty clear the goal is integration. And although they could have moved a bit faster, Microsoft couldn't have made a better move.

A revolution in search of a market

Anyone who has used Groove to support collaborative work knows what Microsoft is buying. Groove combined just about every collaborative tool ever imagined - instant messaging, shared workspaces, simultaneous document editing and multipoint text, audio and video conferencing - into a single product, connected via peer-to-peer networking and exceptionally clever replication techniques. It extended these capabilities to every application on the user's computer, not just a special "collaboration-enabled" suite. In doing so, it changed collaboration from a separate application to a tightly integrated extension of the tools for which most people use PCs. This was a powerful new capability, even if most people and companies didn't realize how useful it could be. In an effort to make the product understandable, reviewers compared Groove to everything from Lotus Notes to Napster to Doom. Groove's product did so much that it suffered, in fact, from a "threshold of understanding" problem: even though people took to it quickly once they tried it, the product looked so formidable from the outside that few actually gave it a chance. So this potentially industry-changing technology has languished for five years, a revolution in search of a market.

Presence awareness and frictionless collaboration

Probably the most powerful enabler in the Groove product is its ability to keep track of which members of a project team are online at a given time. This technique is known as "presence awareness" and creates a fluid, never-ending environment in which any team member can easily find others and collaborate: have a conversation, co-edit a document, run budget numbers, even play chess (yes, board games were part of the original distribution). Team members can drop in for updates, or stay and work as part of the group, using technology to extend the traditional "bullpen" to work over long distances. Presence awareness has been at the core of instant messaging applications since the late 1990s and before, but Groove was the first product to allow all applications, including mainstream apps like Microsoft Office, to join the party. Whether or not it was widely accepted at the time, this was a major advance in software capability and integration. For some of us, this is not news. As far back as 2000, I wrote a paper titled Pervasive Messaging that pointed out, among other things, the value of presence awareness for both mobile and office-based workers. I revisited this topic in a March, 2003 talk at Babson College called "Mobilizing Email. While both of these focused mainly on the mobile worker, both also stressed the value of building work communities through pervasive, frictionless collaboration and presence awareness. These are exactly the strengths that Ray Ozzie's Groove brought to Microsoft this week. Groove-style collaboration in Office, or even Windows, will be the advance that makes the next versions of these products the first must-have upgrades in years.

Here comes the cavalry

The compelling nature of collaborative extensions may very well turn out to be Microsoft's salvation. After crushing virtually all their conventional competition, Microsoft's major competition for the past few years has been the open-source movement, whose business model offers longer development time horizons than those granted to most companies. The lack of compelling new features in Microsoft's core products has given open-source developers a mostly stationary target to compete against. Products like and Fedora have nearly closed the feature gap with Microsoft, while offering much lower pricing, competitive TCO, less onerous licensing requirements, better security and faster responses to bug reports. I predicted in a November, 2003 article that Linux had a window of opportunity to build a market on the desktop because Microsoft would not offer serious new features until around 2006. Before Microsoft's acquisition this week, I was ready to extend that window. Groove, however, changes everything. Linux-based applications, and Linux itself, are years behind in integrating collaboration. Just as open-source products have begun to offer the stability, user-friendliness and feature set end-users expect, Microsoft has gotten the chance to redefine the argument by buying into to the most important computing tool users didn't know they needed.

Third time's a charm

It's a truism that Microsoft gets almost everything right the third time. DOS, Windows, Word, Excel, Internet Explorer, PocketPC and Visual Basic all came into their own in version 3. In almost all of these products, version 1 was essentially a test-market product and version 2 a public beta used mainly by early adopters. After these two attempts, the press would write off Microsoft's effort as halfhearted and ill-informed. Microsoft would respond by developing (or acquiring) version 3, based on customer feedback and the lessons learned from the first two rounds, and take over the market. Groove qualifies as Microsoft's third foray into the collaboration space. Version 1 was the relatively clumsy tools built into Office 97 and later versions. Version 2, the SharePoint tools available with Office 2003, was hampered by poor integration and by Microsoft's decision not to bundle the product with every copy of Office. The Groove architecture is a logical next step and, since it's already built on Microsoft's .NET platform, is such a perfect fit that it makes one wonder if this week's buyout wasn't part of Groove's 2001 business plan. So, Microsoft, in buying Groove, has made the next strategic move in the war over desktop dominance. Given Microsoft's marketing skills, and their power to set the terms of the debate, look for the next great battle in that war to be fought on the field of collaboration.
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©2003 Rich Stillman