Microsoft, in announcing its intention to buy Groove Networks and to make Groove founder Ray Ozzie a CTO, is taking bold step toward expanding its collaboration strategy and embracing Grove’s peer-to-peer technology that helps users work together over the Internet, industry analysts say.The deal calls for Microsoft to add Groove’s products into Microsoft’s Office System lineup of products and services, along with bringing over Groove’s core management and development team. Ozzie, the creator of Lotus Notes, will report directly to Microsoft Chairman and Chief Software Architect Bill Gates.While Microsoft executives declined to discuss a roadmap for what and when they might integrate Groove with any of its collaboration products, Gates, in a late morning press conference on Thursday, said Microsoft will be looking to stitch in several of Groove’s capabilities into Longhorn, the follow up to Windows XP, Ed Scannell of InfoWorld.com reported. “We will bring together the peer-to-peer and authentication capabilities Groove has built into their application with the equivalent things we have been incubating at Microsoft to strengthen the platform,” Gates said. “Clearly, a big thing with Longhorn is its peer-to-peer capabilities, and Groove will help us pull that together.”“Groove has some fantastic and unique features we want to fit into the entire Office offering,” Gates added. Integrating Groove should enhance Microsoft’s Office System strategy on the desktop, one of the company’s largest revenues generators, although again officials declined to say how and when. By combining Groove with its existing collaboration products, including Office, SharePoint server products, and Live Meeting Server, Microsoft officials believe they have achieved a collaboration “trifecta.” “The combination of realtime server-based, and peer-to-peer communications will clearly be a significant enhancement, so you can expect that as part of our product planning for the next major wave. We are expecting to use it very broadly,” said Jeff Raikes, group vice president in charge of Microsoft’s Information Worker Business unit. Currently, Microsoft has Office SharePoint Portal Server line and Windows SharePoint Services that allow IT shops to create and manage shared spaces for groups of information workers within an IT-based network. Just this past week the company introduced Office Live Communications Server and Microsoft Office Live Meeting that together reportedly offer a unified communications infrastructure for information workers. The acquisition not only enlivens the strategic vision of Microsoft but gives to IBM, which now owns Notes, one analyst said. “Microsoft has been on a strategic path to turn Office and .NET into the next generation of collaborative systems but has never been able to capture the momentum that Ray Ozzie did for Lotus,” said Rob Enderle, founder and principal analyst of The Enderle Group. “The world that Microsoft resides in just got a whole lot interesting and IBM executives just got a very rude wake up call this morning.” However, the timing of the acquisition seemed to come at a difficult for both companies to integrate its complementary technology into two critical releases scheduled for late 2006, namely the long-awaited follow up to Windows XP, code-named Longhorn, and the next version of Office, which is designed to fully exploit Longhorn. “Microsoft has two big releases coming next year in Longhorn and Office 12, which are radically different from their predecessors. They both have millions of lines of code, hundreds of developers, and programming teams well into their development phases. It is going to be hard to take a step back and stitch new technology and strategies into those products,” said said Nate Root, a vice president at Forrester Research.Groove makes a wide range of software and development tools that allow geographically dispersed workers collaborate over the Internet, IDG News Service reported. The company’s Virtual Office product allows workers to communicate and securely share information such as files, calendars, sketch pads, task lists, Web links and photos over the Internet. Microsoft has twice invested in Groove, Gates said, and he has long thought about whether Microsoft could hire Ozzie, who has “made a huge contribution in terms of giving us feedback about (Microsoft’s) platform,” and whose ideas have “influenced” the Word user interface. Ozzie is particularly skilled at thinking about the problems and needs of workers and “building the technology in a simple way that can help people become more productive,” Gates said.Groove’s Virtual Office helps users across an enterprise, or outside that en-terprise, to work together over secure Internet connections, IDG News Service reported. The product uses a peer-to-peer architecture that allows individual PCs to communicate directly with one another and to share documents or communicate via instant messaging.“The PC has come to stand for the Personal Communicator, and so we have optimized Groove for a specific usage model that is very synergistic with how people use Office documents and tools on a day-to-day basis. This is why it is very important to view [Virtual Office] as part of the Office system of products,” Ozzie said. Gates said Ozzie will be on the company’s Senior Leadership Team and will be helping to shape and influence many of the technical pieces of the company’s collaboration strategy. Some observers agree that Ozzie’s lofty position sends a signal that his role will be much more than that of shepherding the deal to completion followed by retirement. “It looks like they want Ray to be around for the long haul to make some other paradigm changing inventions like Notes and Groove. You can imagine some pretty far out conversations over a cup of coffee or a beer between those two,” Root said. Technology Industry