The term "small office" is becoming more and more inaccurate as businesses find that their employees, associates, clients, and customers don't live in the same city or even the same country. As a result, collaboration software has become a necessity for many companies, even those -- or especially those -- who are official classified as "small."

However, today's collaboration applications require a level of administration effort and hardware infrastructure that few small businesses can support. Microsoft Exchange does offer the type of functionality a small business would like to have -- and a reputation for consuming budget dollars and person-hours that could send you running in the opposite direction. With any luck, you might run right into BlueTie.

BlueTie is a Web-based service designed to compete with server-based solutions like Exchange by delivering a hosted suite of business collaboration tools that require no hardware, software, or IT support.

BlueTie's suite of applications is built on the software-as-a-service model (SaaS), and includes e-mail, scheduling, to-do lists, contact management, file backup, and file sharing. It wraps these functions into an administrable package and offers them in two versions: free (or almost -- you may eventually notice some advertising), and $4.99 per user per month. The free account allows the owner/administrator to create up to 20 user accounts, each with 5 Gbytes of storage space on BlueTie's servers. The paid service offers more capacity (10 Gbytes per user) and features like an internal instant-messaging application, Outlook integration, support for mobile devices like Treos and BlackBerrys, and toll-free support.

A Subtle Interface
What BlueTie does is hardly revolutionary. E-mail, calendars, and file-sharing are familiar functions, even as Web services. You could duplicate almost everything about BlueTie from Google piece-parts. But BlueTie adds two critical pieces. One is a clean, usable interface that ties the pieces of the service together logically and works very quickly. The other is the administrative control that makes BlueTie the business-grade application that its name cleverly implies.

BlueTie looks like it's all business from the moment you log in. It's not afraid of white space on the screen, and it doesn't waste any cycles on eye candy. The application's functions are invoked for the most part by square-cornered buttons that give BlueTie a your-father's-Web-design look. (The calendar design, in particular, suffers compared with, for example, Yahoo's group calendar.)

But overall, plain is not a bad thing. With less screen distractions, you can do what you need to do done faster, and BlueTie works with admirable speed. Even things that you might expect would cause a measurable delay, like downloading your in-box view from the server, seem comfortably quick.

That's good, because being Web-based gives BlueTie a lot to overcome out of the gate. Web browsers and Web protocols historically have not made for richly functional Web applications. Ajax programming techniques have improved things dramatically, and BlueTie takes good advantage of them to provide as rich an application interface as it can. It's still not as rich as one might want, of course -- you cannot drag and drop files from one folder to another, for example, and there is no right-click context menu with a "delete" choice that would help you triage your in-box.

Meat-And-Potatoes Functionality
In fact, there is nothing very advanced in the BlueTie interface -- no clever widgets to set the duration of a calendar entry, no presence indicators to show who's online and who's not. (The paid version, with its IM client, offers more.) But then, there's nothing very advanced in BlueTie's concept of what collaboration means, either. The functionality of BlueTie is meat-and-potatoes.

The e-mail feature will look familiar to anyone who's used Outlook or Lotus Notes, with its three-pane screen design containing folders, folder view, message preview. It's very good Web-based e-mail. Like those applications, it's folder-oriented, so you create your own organization by creating folders, and dragging and dropping messages into them. It also has some nice search functionality. In fact, BlueTie is so much like a desktop application that you start looking for some features that it doesn't provide, like the ability to reset the read/unread status.

The calendaring application has the same types of strengths and limitations. You can share calendars with other BlueTie users and control which calendars you choose to display together. You can even choose how you share your calendar: just show "free" and "busy," give read-only access to all the details, or delegate complete read-write control. But on the other hand, there are limitations. For example, you can see other people's calendars, and when you add people to a meeting they get a notification and can accept or reject the invitation -- but there's no free-time lookup capability to help you find the most likely time for the meeting, and if you send an invitation and then cancel the meeting, the invitation lingers on to become a confusing historical footnote.

The document-sharing functionality provides considerable storage space; uploading is very easy and sharing very flexible. Selecting files, which can be a pain in some Web-based applications, is easy in BlueTie's interface: You just select files using your Shift and Ctrl keys. (But only files; you can't transfer entire folders.) As with calendars, you can choose whom you will share your documents with on a folder-by-folder basis (but not file-by-by file) and whether they'll have read-write or read-only access. There's a check-out/check-in function to keep multiple editors from overwriting one another's changes.

You're The Boss Of BlueTie
Everything about BlueTie user accounts is under the direct control of the owner/administrator. You can create and delete user accounts at will, and set the applications they can use and level of control they have. You can build a company directory, then add divisions within the directory and delegate as much or as little of your control as you want to the administrators you create for those divisions.

In short, BlueTie works the way a business works. It can be as rigidly hierarchical or as flat and laissez-faire as you want. And while it's simple enough to use ad hoc, it offers a number of higher-level features, like support for domain names that will let you use it as the permanent mail server for your company.

If you need an ad hoc shared workspace for a project, it's dead easy to create a BlueTie account, enable a handful of users, and upload some files. As the administrator you can configure and enable whatever's important, and turn off what's not. If e-mail or calendars aren't important, turn them off in the account defaults. If you want all the users to share their files, sign into each account as you create it and set the appropriate sharing level. When the project is over, delete the user accounts and everything goes away.

At the other extreme, if you're looking for an Exchange substitute -- and you might be, particularly if you're a small company that needs e-mail and light collaboration features but doesn't need .Net applications or the administrative overhead -- then BlueTie may be it. A BlueTie account (yes, even the free one) comes complete with a domain name, so you can set up e-mail addresses ([email protected]) for your business. If you already have a domain name, BlueTie may be able to work with that, too.

Pay Vs. Free
It's when you consider a longer-term commitment to BlueTie that you face the decision between the free and paid versions. Until very recently, BlueTie had been exclusively paid, but in October it launched its free service, which the company said would be supported by a "featuretisement" model that places click-to-action links within the context of the application. For example, a user who creates a to-do item to "buy flowers for Mom's birthday" might see a "Buy Flowers" link in BlueTie. No featuretisements appeared in the course of working with BlueTie for this review, and unless they get really obnoxious, they seem a relatively small price to pay. And even if that changes, there's always the alternative of paying for the service at $4.99 per month per user.

Short term, the free version of BlueTie looks like a very good deal for small businesses, particularly very small and virtual businesses that need collaboration without commitment. And for companies that can use a software-as-a-service alternative to running their own mail server and benefit from the collaboration features -- and that like the control and security -- paid BlueTie could be the beginning of a beautiful relationship.