Life on the edge

After billions of dollars invested in PC "productivity applications" and a marketplace dominated by Microsoft, does the world need more software for so-called knowledge workers?

Ray Ozzie thinks so and, he says, macroeconomic forces are on his side.

The founder of Groove Networks argues that organizations are becoming increasingly decentralized. Instead of being tightly bound to corporate centers, workers are being unleashed, laptop in hand, to work in different locations or out of their homes. A globally connected economy allows corporations to outsource tasks from manufacturing to software programming. Independent contractors who work for several companies at once are on the rise as well.

For Ozzie, a collaboration software guru, those trends are placing demands on technology that aren't being addressed effectively today. Small groups of people need to team up on projects that can span different organizations and locations. He contends that Web applications have their limitations, as do other products, such as Lotus Notes, which Ozzie created in the mid-1980s.

As Groove prepares to beta test the third release of its software, which Ozzie calls an "inflection point" for the company, Ozzie sat down with CNET News.com to talk about how technology needs to adjust to changing work dynamics. In addition, the technology visionary talked about peer-to-peer computing and the company's close relationship with industry giant (and Groove investor) Microsoft.

Q: In your most recent Web log entry, you talked about how decentralization and peer-to-peer technology are having an impact on your government customers and on society. What has fundamentally changed since, say, your days at Lotus?
A: What collaboration software--and technology in general--is all about is reducing the cost of coordination in one way or another between entities who need to work with one another, whether those entities are individuals or organizations.

The bleeding-edge customers using Notes were trying to use it with companies outside.

When I started working on Notes back in 1982, and when we finally shipped in, like, 1989, I guess I had the changing nature of the organization on my mind. In the enterprise at that point in time--it is hard to imagine going back that far--the concept of re-engineering a corporation had become a trend.

BPR (business process re-engineering), right?
Exactly, and the whole notion was the changing nature of the organization internally. Departments were supposed to work with one another as opposed to working in a "siloed" fashion internally. And that really drove the nature of what Notes was all about. And Notes worked very well for these big global enterprises in that zone. When we founded Groove in 1997, it was based on some things I saw happening in customers in the 1995-1996 time frame. The bleeding-edge customers using Notes were trying to use it with companies outside. They were working with groups outside their corporate boundaries. And these were big companies--channel masters--and they were trying to force Notes out there, and in some cases, it worked. But it was tough.

Groove was really founded based on the changing nature of business in general--the fact that business would become more decentralized. What we saw happening in a limited form was going to happen more and more. Companies would be--I do not think that at the time I would have referred to it as outsourcing--partnering more and more with smaller companies. Supply chains would become important. Firewalls would be a big constraint. I think that we pretty much were right in reading that trend. It has happened more in some industries than others.

So what's changed since Groove launched in 2000?
What we have noticed during the last 18 or so months is that its focus has gone well beyond the changing nature of business--to the changing nature of work in general. It is not just how businesses are interacting with one another in a very decentralized fashion. It is how individuals and small groups of people--very small companies--are assembling into teams and doing things very dynamically in a very mobile and geographically dispersed fashion.

I never could have imagined when we started Groove that by this point in time, according to various statistics, more than half of what we in Groove refer to as information workers--people who use Microsoft Office--work from multiple locations. I am not saying that they do not have a job in a cube. They work from home significantly in addition to working in the office. They work on a client site. So Groove's latest release really tries to focus on are the things that really cater to the individual in this mode of having the need for a "virtual office." You know, to put what they would do in their physical office into their PCs so that by virtual means, they can essentially--and in a secure fashion--join a meeting with various people, and organize and file documents.

Wasn't the Web browser supposed to give people access to information everywhere?
The browser does indeed give people access to information. It is the ultimate access tool, but the browser is at odds with another trend. Leave Groove aside for a moment. One of the biggest subjects I think is not written about very much--but it is so obvious and it is going to be the story in a year or two--are the trends around storage. The fact that right now we carry around, you know, 20-, 30-, 40-, 60-gigabyte hard disks. In two to three years, it is going to be 100-terabyte hard disks.

If you look at Apple Computer's iPod and look at digital video recorders, we are wrapping computers around hard disks now, and we want to carry more and more and more stuff around with us. No matter how pervasive networking becomes, there are security issues with respect to putting all your information on a server that can be attacked by a lot of people from the outside. There are big administrative burdens for corporations making all the information that is available inside the firewall available through the browser securely to subsets of people.

Isn't there the advantage of easier administration with centralized information and browser-based delivery?
Well, we believe that information technology organizations do need to manage things. But I think that is a separate question from whether they are managing something on a desktop or on a server. They need management capabilities, but it's just--this is a bit weird--software. You can build software that allows a central administrator to manage stuff on decentralized clients or on their servers.

With regard to doing things on a Web server versus doing things on a client, most really dynamic applications that involve teams of people use some mix of both centralized and decentralized systems.

Our experience is so intense in this domain (compared with Microsoft's) that what they put in there will be useful, but we are more connected to the business value.

Most major organizations are not going to use Groove in a completely cutting-edge fashion, and most organizations realize that they cannot offer everything through a portal. They have to have some kind of mobility solution. Big vendors acknowledge that they need to embrace the rich client more in conjunction with Microsoft's SharePoint Portal. In IBM's case, they are asking, "How can we reinvigorate a rich client around our WebSphere Portal offering?" So, I just think it is ultimately a mix of finding the right mix for an enterprise of what you put in the center versus what you arm people at the edge.

The other thing is that there are constraints on the richness of what you can do in a browser. In most major enterprises, people might use browser-based e-mail occasionally through a browser when they are traveling, but browser-based e-mail is usually more of a consumer and educational thing. Most people use Outlook or Outlook Express or some other client software--there is a reason people like it.

With so much focus on return on investment and demonstrating hard benefits, is selling software that improves productivity tougher than in previous years?
We do not really sell general productivity. I do not think there is a market for that right now and, arguably, I do not even know that there ever was a real market for general productivity, even though the industry might have thought a bit that way. An individual buys something, because it helps her do something in the context of her job or what she is dealing with. If you're a sales rep, you'll try to find software that helps you sell better or make your quota more effectively. It is not general productivity, per se; it is very specifically applied productivity to a task.

Your company has close ties to Microsoft, which is pinning a lot on Longhorn, the next version of Windows. Do you think that Microsoft has made the business case for Longhorn?
I do not think it has, and I would not really expect that it should have at this point. It should not be hurting the sales of what they have to sell right now. Currently, Longhorn is at the phase in which Microsoft needs to get developers signed up. It is a big challenge for any software vendor to essentially communicate its things in a way that it is relevant to customers from a business value standpoint. And in terms of an operating system, it is hard to really justify the massive cost of an upgrade unless you really can make that case. I look forward to hearing what that case will be, but I have not heard it.

Is there any concern that some features Microsoft is introducing with Longhorn might overlap with and therefore diminish the value of Groove?
They will overlap, and I am not concerned, because the focus that we have on this particular domain is so intense. Our experience is so intense in this domain that what they put in there will be useful, but we are more connected to the business value of it. Microsoft is very focused on what an enterprise does within its own boundaries, and I think that what you will see--if I could project based on what I know--will be really interesting things you can do with the desktop or across communication lines, if you have things configured a certain way.

It is not obvious to me that what Microsoft has done or is proposing to do will be designed to work seamlessly across regular firewall boundaries, enterprise boundaries, operating system boundaries and infrastructure boundaries. And that is what we are focused on: real-world collaboration needs. Am I aware of Microsoft's plans, and do I track it? Absolutely, but I am not concerned.

Do you think that the adoption of peer computing and more decentralized computing systems is speeding up?
I think decentralization in general is shaking things up in many sectors. It has shaken things up in the entertainment industry. Through Napster and MP3s in general, that industry has been rocked by it. It is about to shake up the movie industry in a big way. And the telecommunications industry--have you ever played with Sykpe?

The voice over Internet Protocol service?
That's right. It is very interesting, because the telecom industry historically is very centralized; the whole circuit-switching model is passed here.

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Skype will give you access to that switch. VoIP in general represents an inflection point, a slight disruptor for the incumbents, but Skype takes it all the way to the extreme and simply says, "No, if you have an Internet connection out there, you do not need to pay anything to anybody to do phone calls." So true decentralized rich-client software for telecom is really a disrupter, and we represent essentially what someone can do a productivity and communication stance--a collaborative productivity realm in decentralization.

When Groove launched in 2000, it was known as a peer-to-peer computing company, but you don't hear that from the company as much these days. Is that a deliberate shift?
I think that, oddly enough, what you will see over this year is that we will be talking about ourselves again a little bit more in that dimension. That term was used just more from a factual standpoint to help people understand. We felt a backlash for using it at a certain point, as IT managers were shutting down their networks in a very blanket fashion to P2P networks, because they were afraid of lawsuits.

Now, because of the telecom thing, in particular, it is kind of coming back in the conversation in terms of "Wait, you can really save money by using a peer-to-peer architecture for doing this, that and the others." We are not going to be out there, trying to create another peer-to-peer wave, but when somebody does understand that a peer-to-peer architecture can save the money, it is relevant.