In-Depth

Getting in the Groove

Now that it's under the Microsoft umbrella, partners see a bright opportunity in Groove Networks' collaboration technology.

• By Hailey Lynne McKeefry
• September 01, 2005

Until last spring, only a handful of resellers were pushing technology from Groove Networks, proclaiming that the ad-hoc collaboration solution could change the way certain verticals did business. With Microsoft's acquisition of Groove in April, solution providers now are jumping on the bandwagon and looking at how they can integrate the technology into their existing practices.

Partners that may have hung back at the prospect of partnering with a small, unknown software company increasingly are confident that Groove presents a solid opportunity. "Now that Groove is part of Microsoft, we know how we get training and interact with the account team, so the partnership becomes much more natural," says Manish Chandak, vice president of national practices at Quilogy Inc., a Microsoft partner based in St. Charles, Mo. "I don't know if we would have done Groove otherwise, because taking on additional vendors takes more bandwidth from our standpoint."

Early adopters of Groove anticipate the additional support Microsoft will offer. "Groove was one of our first partnerships, and now we are eagerly looking forward to developing a relationship with Microsoft," says Brooks King, president of U.S. Corp-orate Networks LLC, a Groove partner in Atlanta. "We are very excited about what the acquisition represents. Combining the talents of these two organizations can only lead to significant opportunity."

Groove—the Short Story
The acquisition brought Groove's products and team under the umbrella of Microsoft's Information Worker business unit. Microsoft has said it will add Groove's products to its Microsoft Office System lineup and will, at least initially, continue selling Groove products on a stand-alone basis. It also will evaluate potential ways of complementing other Microsoft technologies, such as Windows SharePoint Services.

"The plan of record is that Groove will continue to be made available as a stand-alone product," says David Scult, general manager of the Microsoft Groove subsidiary. "In addition, we are looking at all sorts of bundling and integration possibilities. We are looking across the entire product line at Microsoft [for opportunities] to bundle Groove. We have made an absolute commitment that Groove Virtual Office will [continue to] be available [as a stand-alone product]."

Groove will continue to operate out of its Beverly, Mass., headquarters. Ray Ozzie, creator of both Groove and IBM/Lotus Notes software, now is one of three Microsoft chief technology officers, reporting directly to Chairman and Chief Software Architect Bill Gates.

The Concept
Groove's Virtual Office technology allows occasionally connected workers to collaborate—even if they are on multiple computers, in various locations and in different time zones. In that sense, analysts and VARs agree, it complements existing Microsoft collaboration technologies such as SharePoint.

"Groove has enhanced Microsoft's collaboration story," Chandak says. "You can't assume that everyone is always connected and that collaboration happens only within organizations and boundaries. [In reality,] a lot of collaboration happens outside the boundaries and needs to happen when people are not connected. Groove enhances those scenarios."

Groove Virtual Office, introduced in mid-2004, is designed to allow people to readily form virtual workgroups and to work as if they are continually connected. It does this by creating "workspaces," which allow users to share information, synchronize folders, use built-in chat and instant message (IM) via either voice or text, and alert everyone in the group when something changes.

"Groove is about making decisions quicker and more effectively for customers, partners and employees," says Douglas Coots, a partner at OTB Solutions Group, a Seattle-based Microsoft solution provider. "Groove is a fantastic enabler of the lightly connected model in the way that it allows people to be connected with others who are not necessarily sitting on a broadband connection."

In addition, Groove integrates strong security measures, which satisfy organizations' increased security concerns.

"The nice thing about Groove, with 128-bit encryption and invitation security, is that it is highly secure," says Dick Federlie, senior manager at OTB Solutions Group.

Some have compared Groove with Lotus Notes, pointing to the unique user interfaces of each, as well as the loyal and vocal groups of technology evangelists that have grown up around them. "Groove has similar capabilities to Lotus Notes but doesn't require the heavy lifting that Lotus Notes requires from an administrative perspective," Scult says. "Once Groove is implemented, it doesn't require extensive administrative overhead."

Perhaps the innovative nature of Groove's technology is its biggest hurdle to adoption, resellers and analysts agree. "One of the issues with Groove is that it has a different user interface," says Ron Anderson, owner of FAI Consulting Services Inc. in New York. "Because it is peer-to-peer, you have to sell it into more sophisticated organizations."

Once they get into the Groove concept, users are enthusiastic, but it can take time for them to fully understand the technology. "Groove is a very difficult product to explain," says Paul DeGroot, an analyst at Directions on Microsoft in Kirkland, Wash. "That's kind of a yellow flag for partners. Frankly, part of the problem is that Groove seemed to have trouble explaining its technology in a way that was immediately obvious to people. It's a special mixture of current technologies, such as IM, collaboration, white boarding and [peer-to-peer file sharing]."

Turning to the Channel In that regard, Groove is not unlike Lotus Notes, which took time to catch on with users, at least in part because Lotus initially struggled to adequately explain it.

And like Notes, Groove's success depends heavily on the channel's support. "Lotus was extremely successful, in part, because many partners bet their business on the technology," Scult says. "For thousands of Lotus partners, that was their only business. Over time, many partners have become dedicated to Microsoft and SharePoint. Being able to tap into that will be a key to our success in growing a Microsoft Groove channel."

Groove's founder agrees. "As Groove Networks, we could never get any substantive traction with the channel," Ozzie admitted in a recent interview with Redmond magazine (a sister publication to Redmond Channel Partner). "In today's times, people have little money to invest in new speculative technologies, and Groove was a speculative technology by a small startup with an unknown future. One of the great positive things that Microsoft does in the Groove realm is [to] add tremendous credibility, longevity and sustainability" (see "Channel Questions for Ray Ozzie").

Channel Questions for Ray Ozzie Microsoft earlier this year bought collaboration software company Groove Networks, and in the process, it gained a new CTO--Ray Ozzie, father of Lotus Notes. Redmond Channel Partner editors Doug Barney and Paul Desmond caught up with Ozzie for a few choice channel questions. Lots of products, including Notes and Exchange, have rich collaboration functions, but not many people use those features. What can the industry do to get people to exploit collaboration technology? The value of the collaborative technology rises in proportion to how vertical the collaborative solution is. Is that Ozzie's Law? Yeah, it's Ozzie's law (laughs). It is actually a law attributable to Notes VARs. Notes was a platform technology. Sure, it does mail and directory and calendaring when you install it. But its business value would really rise in proportion to how much a VAR would come in and customize it to a legal app, or emergency responder app or some app based on what you do. Groove is the same way. If somebody downloads it and it's a blank page, they might see some value or they might not. But if somebody that they know and trust says, 'Oh, I'm using it for this and that. Let me give you a template,' then suddenly it works for them. Suddenly the value is much higher. Two things cause applications like Groove to succeed on a broader basis. No. 1 is the distribution of templates that are more vertical in nature. And as part of the bundled offerings, they have to be very targeted. And again, VARs [play a role in that]—people who are solution providers who really understand their domains much more deeply than any big horizontal software company could. Are there specific things you are planning to do with the channel to help foster that vertical orientation? I believe Notes would have been ultimately a much less valuable technology if the channel had not picked it up and done what it wanted to do with it, and found a way to make money for itself while solving problems for partners. As Groove Networks, we could never get any substantive traction with the channel. In today's times, people have little money to invest in new speculative technologies, and Groove was a speculative technology by a small startup with an unknown future. One of the great positive things that Microsoft does in the Groove realm is add tremendous credibility, longevity and sustainability. Now, finally we will be able to give partners a message. Figure out a way to leverage it for your own selfish benefit because the moment you do that, everyone will benefit. How important is customization? If you go to the Groove Web site, there are the beginnings of what we call rapid solutions that you just click and download. It's a starter template, it's semi-vertical, and it's fairly nascent. That will not be mature until partners get involved and really start enhancing.

Indeed, when Microsoft bought the company, the Groove reseller roster included six partners in the United States and seven more in the rest of the world. By contrast, some 275,000 companies belong to the Microsoft Partner Program. The company is betting some of them will be natural choices to develop applications that leverage the strengths of Groove. "We've targeted some of the experienced SharePoint partners, who have been in the marketplace with their own SharePoint solutions," Scult says. "They understand what has already been accomplished [in terms of Microsoft's collaboration technology] and where there is still need."

Finding the Sweet Spot
The best opportunities for the channel may lie in creating vertical applications. "Our business is, in part, driven by the value that new technologies make available," Coots says. "This is a very exciting opportunity for us to understand what those value propositions are in specific verticals and offer those to our customers. We are focusing aggressively on taking advantage of this opportunity with Groove."

The list of potential users is vast, resellers say, pointing to financial service organizations; emergency response teams; healthcare, pharmaceutical and biotech companies; and security-related industries. Sales and marketing departments, as well as professional service organizations, offer other obvious opportunities.

"Groove is very compelling for small to medium businesses and also has resonance in the enterprise," says King, adding that his organization is looking at potential applications, including knowledge management, human resources pipeline management, IT issue tracking, new hire orientation, order entry systems and inventory tracking.

Architecture, construction and structural engineering firms are also prime candidates. "I met with a large architectural firm and had a conversation about how they work," says Chandak. "They have large files that they need to share in a geographically dispersed way. They work with a lot of outside contractors—with Groove it is easy to do that."

Building Awareness
Groove partners, although caught somewhat unawares, are generally open to exploring the opportunity that the acquisition brings. "The acquisition caught us blind," says LuAnne Bell, vice president at Blue Atlas Interactive LLC, a Groove partner in Germantown, Md. "Our plan as a partner is to market to existing Microsoft partners in the hopes that we can begin to collaborate. By joining together, we see a huge opportunity for SharePoint/Groove integration."

Groove is counting on the help of large resellers to get the solution into the hands of enterprises. "We want larger major systems integrators to pick up Groove—that's necessary for multimillion dollar corporate deployments and deployments in the public sector, where they only award contracts to the largest distributors," Scult says.

Over the next six months, Microsoft will be offering programs developed around joint selling, and enablement and delivery of technology, Scult says. "Before the next wave of Office products, there will be much broader awareness of Groove, targeting those SharePoint partners and trying to bring them up to speed," he adds. "We don't want to go too fast, and we want to be respectful of their business investment and the opportunities."

Initial response to the programs has been strong, Microsoft reports. "We've seen a lot of interest from those partners that are already doing joint marketing, either event marketing or seminar selling," Scult says.

Partners, meanwhile, are clear about what they want from Microsoft to help them sell Groove.

"We want our people to get trained on the technology so we can represent and sell it correctly," Chandak says. "There is a good understanding on the sales side, but we need to move that to the delivery side."

"We would like to see Microsoft share knowledge on regional sales opportunities so partners are able to effectively follow up on new users to offer extended professional services," Bell says. "I would expect Microsoft would help us meet new partners since it is in their best interest to have a vibrant Groove network. That can grow faster if there is a support system behind it."