March 11, 2005
Microsoft Acquires Groove

Microsoft acquired Groove Networks yesterday and Ray Ozzie was named CTO. The press is focusing on this as about Ray joining Microsoft, which underplays the potential importance of Groove's technology. Microsoft has been a substantial investor in Groove for years and Bill Gates' huge respect for Ray is well known in the industry. The companies have been working closely together.

Ray has been a colleague and friend for over 20 years. He came to Lotus is 1982 with the vision of Notes already in mind, having been inspired by the PLATO system he used as an undergraduate at the University of Illinois. He paid his dues as the technical lead for Lotus Symphony, the intended successor to Lotus 1-2-3. Ray, I promise never to ask you to build a word processor out of a spreadsheet. It just doesn't work.

Ray conceived and led the Notes project, which I chartered, from its inception in 1984 through IBM's acquisition of Lotus 1995, and for a while thereafter. We created a unique arrangement based on a large measure of trust in which Ray and his team were firewalled off in Iris, a separate company from Lotus, to give it the room it needed to grow. I left Lotus prior to the launch of Notes, which proved to be a key early Windows application. Ray and his team were so trusted by Microsoft that they were a given a copy of the Windows source code to help debug it.

In 1998 I was privileged to be invited by Ray to be the first outside investor in Groove and I served on its board until 2003. I had determined to step down then because my path in open source was taking me further away from Groove. This decision was accelerated by the disclosure that the ill-advised Total Information Awareness project was using Groove but would have certainly occurred anyway.

When Ray came to me the other week and said that the Microsoft acquisition would keep the current Groove employees in place in Massachusetts and create incentives for them and that it was best way to continue to realize the company's vision of peer-to-peer information sharing, I decided I could support the transaction even though a surface reading of my career might suggest otherwise.

In several press calls I've tried to emphasize that the world looks very different in 2005 than it did in 1998 when Groove started. Now I would say a project like Groove should most likely be started as free/open source software. You could not do it as a cathedral; it would have to be put together as a set of incremental pieces. Additionally, there would still the problem of how do you innovate in the context of open source, which is the same challenge we are facing at OSAF, but I believe it is solvable. On the other hand, by leveraging a worldwide developer community, open source projects require enormously less capital and can pursue strategies for growth with dramatically more flexibility than firms needing to meet the expectations of investors. It would be a very different path.

Open source has shown itself to be capable of massing enormous efforts to develop computing infrastructure and applications. Web technology, and more broadly Internet-oriented client-server technology, has made enormous strides in all dimensions, making it all that much more difficult for peer-to-peer solutions to be equivalently good, despite its unique affordances.

With the prospect of open source-based server capabilities of all kinds becoming more like the electrical power and distribution system, universally available on demand in whatever amount is needed, a whole class of objections to client-server architectures such as dependence on non-local, unreliable and inconvenient infrastructure diminishes. Groove's peer-to-peer architecture performs uniquely well in areas where the telecom infrastructure is weak, such as conflict-ridden areas of the Middle East and Asia where both military and humanitarian aid groups have deployed it successfully, but this alone is a niche application.

The challenge now is whether Ray and Groove, which represent forces of architectural innovation, can have a successful impact at Microsoft, which after all, is a large (58,000 person), middle-aged (30 year-old) company. It's hard to know whether the loss of nimbleness due to size and age is a greater challenge to Microsoft than is open source.

Posted by at March 11, 2005 06:55 AM