Microsoft Banks On Ray Ozzie's Groove Net

Microsoft has invested $51 million in Ray Ozzie's Groove Networks Inc., extending an already-close technical relationship that could lead to new types of collaborative applications.

Microsoft is taking a minority equity stake in Groove, whose CEO is Lotus Notes author Ozzie and whose board includes Lotus 1-2-3 designer Mitch Kapor. Groove's application--peer-to-peer software that lets teams collaborate on projects over the Internet and make offline changes to files--shipped this spring. Combined with real-time instant-messaging software from Microsoft, Groove's software could create new ways of working for PC users, both companies say.

"There's an incredible amount of computing power out there, and one of the best things we can do with software is figure out how to optimize the distribution of that computing power," says Jeff Raikes, Microsoft's group VP for productivity and business services. "This is a very sizable investment for our company."

Groove and Microsoft have demonstrated software that lets users of Microsoft's Windows Messenger invite buddies into a Groove online workspace. Upcoming technology will include more integration between Groove and Microsoft Office XP, as well as with upcoming Windows-based Tablet PCs, Ozzie says. The Tablet PC's wireless networking environment is "perfect for Groove," he says. The companies also say Microsoft's Visual Studio.Net development tools, due late this year, will make it easier for developers to extend Groove's app.