I have a theory on why Microsoft acquired Groove Networks, and it’s all about Google.
What if Google decided to release an office productivity suite? What if they took it a step further and made it an internet-accessible sharepoint clone, with online document editing, spreadsheets, presentations, project planning, and collaboration. Here’s the disruptive kicker: What of Google’s suite of tools was a “good enough” replacement for Microsoft Office? These tools might not be as full-featured as their Microsoft Office counterparts (when was the last time you heard someone praise Word for being so full-featured?) but what if they’re good enough, and free? Google could follow their common practice of generating revenue with unobtrusive relevant ad overlays, and give this to consumers for free. The only price is that you check your privacy at the door.
This could mean big trouble for the Microsoft Office cash cow. People still use Office 95, and even Office 6.0 when they can get away with it. Office has been good enough for quite a while.
My bet is that Microsoft picked up Groove to try to compete better in the online collaborative workspace environment. Whether they can integrate the technology into a compelling platform to compete with Google is a story for another day.
Update: InformationWeek has some similar thoughts in this article: http://blog.informationweek.com/windows/archives/002914.html