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In the Groove: An Interview with Ray Ozzie, Groove Networks

By Angel Mehta, Managing Director, Sterling-Hoffman Management Consultants

Touted as one of the Top Ten Technology Innovators (InfoWorld.com - April 29, 2002), Ray Ozzie is known as the man who created Lotus Notes, the network-based document sharing communications environment that took organizations by storm in the early 1990’s. Today, Ray Ozzie is focused on Groove Technologies (www.groove.net), an interactive collaboration software that Ray believes is taking organizations into a new dimension of communication.

Sterling Hoffman: What is your response to industry comments that Groove Networks is really just an updated version of Lotus Notes?

Ray Ozzie: To truly understand the differences between Notes and Groove, you need to explore the way humans naturally interact with each other. That’s what we did that led us to choose a decentralized model for Groove, rather than a centralized model like Notes. Think about it - humans interact in a wide variety of ways. Sometimes we want to express emotion, whether its urgency, surprise, impatience, etc. Sometimes we might want to communicate in different time domains, and others we may need to do something in real time. Sometimes images are the best descriptor; others it might be text or numbers. What I’m getting at is that people are inherently multi-temporal, multimedia creatures and we pick our tools—pen and paper, a phone, a fax — based on how we feel it best to communicate with other people in a particular situation. Now, contrast that to the state of the technology. In Notes, the core paradigm that users interacted with was a form, a document. You could do any kind of communicating you wanted, as long as it fit in a form. Go to the Web, what is the dominant paradigm on the Web? It’s the form, it’s the page. The reason that a lot of these Web-based collaboration systems are not dramatically taking off, and not taking us into a new dimension of functionality, is that they’re just simply propagating the same model that Notes had and that the Web had: you get pages and you put pages. It’s a very constrained mode of usage.

Groove is designed from the outset to embrace multiple media and modes of collaboration. You can sketch in it, you can talk in it, you can include pictures, and, of course, you can use forms. It handles everything from real-time or near real-time interaction to totally disconnected interaction very, very smoothly without any change in how you use it.

Sterling Hoffman: In your opinion, has the attitude towards an ‘IPO’ changed in this market? How so?

Ray Ozzie: More than just the attitude has changed. The requirements have changed as well. You have to be profitable, or clearly on your way to profitability, and you must be demonstrating quarter-over-quarter revenue growth. A couple of years ago, the attitude was ‘Why not go public?’ Today, the attitude is, ‘Why go public if you don’t have to?’ As for Groove Networks, our ambition is take the company public when we’re confident we can deliver consistent results for our shareholders.

Sterling Hoffman: What are your / Groove’s key priorities for the next 2 quarters?

Ray Ozzie: On the product front, we’re working on a few things. Our 2.1 release of Groove Workspace is slated for later this summer. I can’t give you specifics on what it will include, but we’ll be enhancing our integration with email, which remains the collaboration tool of choice. We’re also focused on more tightly integrating Groove with Microsoft technologies, including making it easier for developers to build Groove tools from within Visual Studio.NET. On the sales side, our number one priority is extending our reach into Fortune 1000 organizations, and helping our current customers accelerate adoption of Groove. Other priorities include communicating our value proposition more effectively and increasing sales of Groove from our Web site by cultivating a customer base among small businesses and individuals. From an alliances standpoint, one of the key milestones in Q3 will be the availability of software applications with embedded Groove collaboration services from our partner PTC. This is the first example of our “powered by” Groove strategy where ISVs can leverage Groove platform services to add a collaborative dimension to existing applications.

Sterling Hoffman: Why do you think collaboration type products are so ‘hot’ right now?

Ray Ozzie: All collaboration products, at a fundamental level, help individuals bridge boundaries separating them from others with whom they need to interact to get their job done. Collaboration is “hot” right now because these barriers between individuals – geographic, organizational, temporal – are growing in dimension and number. More and more, project teams are comprised of dispersed groups of individuals, including representatives from multiple organizations. A multitude of factors are contributing to this “decentralization” of the workplace including increased outsourcing of key business functions, reduction of travel budgets and a growing percentage of teleworkers across all industries. To help “bridge the gap,” collaboration products are being used to create virtual workspaces that allow these teams to work more intimately with each other, as if they were in the same room. Our belief, of course, is that a decentralized architecture is best suited to meet the needs of decentralized project teams, because like email, it corresponds to the style and modes within which they work: ad-hoc, end user-initiated interaction in real-time, asynchronous and offline situations, securely across firewalls.

Sterling Hoffman: How would you describe your customer-base at this point in time?

Ray Ozzie: We currently have more than 30 Fortune 1000 class customers at various stages of deployment. Most are in pilot stages, while others like GlaxoSmithKline are approaching broader scale deployments. Our 2.0 release addresses many of the enterprise readiness requirements some of our earlier customers had helped us define. From a vertical standpoint, we’re seeing early traction in industries that have highly decentralized processes, such as pharmaceutical, professional services, and government. Groove allows businesses in these industries to increase their “return on connection” in the relationships they now deeply rely on with customers, partners and suppliers.

In addition to our enterprise base, we’re having early success in selling Groove Workspace as an out-of-the-box solution to small businesses and individuals. Our Web site is the key channel here, though we anticipate developing additional channels with the VAR and solution provider communities over time.

Sterling Hoffman: Current market data indicates that customers are extremely skeptical about new software purchases. Are you having the same experience? How do you convince a company that the Groove platform impacts their bottom line?


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