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Microsoft features software by Mass. firm in new Office

REDMOND, Wash. -- Groove collaboration software, developed by a Massachusetts start-up, is set to be unveiled by Microsoft Corp. today as a primary selling point for a new premium version of the company's Office productivity suite of software for businesses.

Office Enterprise 2007, a high-end desktop product that will be available late this year, will feature Groove and One Note, a digital note-taking application developed by Microsoft, along with updated versions of standard Office word-processing, spreadsheet, and presentation software.

Microsoft has not disclosed how much it will charge customers for the premium suite or the new flagship Office Professional 2007, its first new releases of Office since October 2003.

The offering is part of a new Microsoft strategy, led by its chief technical officer, Ray Ozzie, the founder of Groove Networks Inc. in Beverly, to provide businesses and other organizations with a range of Office products on the desktop and the Internet that can fend off challenges from rivals such as Google Inc. and Yahoo Inc.

Groove, which helps far-flung work groups share data and documents within and between organizations, will also continue to be available as a stand-alone product in retail stores and on the Internet.

Microsoft acquired Groove last April for about $120 million, in a deal that brought Ozzie to Redmond to work side by side with Microsoft's cofounder and chief software architect, Bill Gates. But until now, Microsoft had not specified how it would integrate Groove's software into Office, historically the company's most profitable business line.

''We think this will be the benchmark product for companies that take collaboration seriously," said Chris Capossela, a native of Boston who is vice president of Microsoft's information worker product group. ''One of the ways the workplace is changing is that companies everywhere are working across corporate boundaries" with partners, vendors, and customers. ''Ray and the Groove team understood that trend very early, and you could say Microsoft is just getting around to it now."

Laura DiDio, an analyst at the Yankee Group research firm in Boston, said integrating Groove will make the new Office release more appealing to customers who want ''all access all the time" to employees and partners at a juncture when businesses have been slower to migrate to newer versions of enterprise software. ''Any software company is challenged getting customers to move," DiDio said. ''People are holding onto their software for as long as they can or until their hardware dies."

Another challenge for Microsoft will be marketing the premium Office software to large enterprises at the same time it tries to extend its reach to businesses with fewer than 10 employees through a new Office Live Basic product, which offers small businesses free domain names, websites, and e-mail accounts.

''The opportunity is very large," said Baris Cetinok, director of product management for Microsoft's information worker services group. ''This is one of the most technologically underserved communities."

Capossela said Microsoft software developers, working in Washington and in Beverly, were able to integrate Groove into Office in about eight weeks. The integration will expand Groove, which previously was available only in English, into more than 25 languages. It will also enable Groove to work with SharePoint, a Microsoft product used within corporate intranets, and InfoPath, a product that generates forms to collect data.

Robert Weisman can be reached at weisman@globe.com.

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