Microsoft Gives Ozzie New Groove

Ray Ozzie, one of the more well-respected technologists in the industry and the brains behind both Lotus Notes and the Groove peer-to-peer software, is facing what may be the most daunting challenge of his career as a result of last weeks reorganization at Microsoft Corp.

Ozzie, who joined the ranks of the Redmond, Wash., company as a chief technology officer when Microsoft acquired Groove Networks Inc. in March, has been tasked with executing a software services strategy across Microsofts three new business divisions, officials said last week. Ozzie will have the full resources of Microsoft at his command but will be playing catch-up to companies that have beaten Microsoft to the punch in the software-as-a-service world, including IBM, Oracle Corp. and Salesforce.com Inc.

However, industry watchers said Ozzies respect in the industry and collaboration expertise will give Microsoft an important advantage. "Hes a perfect guy to do this. I always said Microsoft got a great deal when they invested in Groove," said Robert Mahowald, an analyst at IDC, in Framingham, Mass. "Ray Ozzie has technical credibility and is an excellent guy to revamp Microsoft.

"Microsoft products have not heretofore had much in the way of services," said Mahowald. "He can help bring coherence for customers who want to look at Microsoft products in a way they can pay—for example, on a per-user basis."

One such customer said he is encouraged by news of Ozzies broader duties. "[Ozzies] expanded role at Microsoft should yield solutions that are simple, collaborative and integrate seamlessly beyond just Microsoft products," said Joe Gimigliano, systems director for IT security at Purdue Pharma LP, based in Stamford, Conn. "With the focus on software services, Microsoft has the opportunity to prove why IT still matters."

Some analysts said they believe that Ozzies presence atop the services organization is not only evidence of Microsofts seriousness about that market but also portends bigger things for Ozzie down the road.

Click here to read David Courseys take on Microsofts reorganization.

Although its not yet clear exactly how Ozzie will operate within the Microsoft hierarchy, industry insiders said theres evidence that Microsoft Chairman and Chief Software Architect Bill Gates and Ozzie are already working closely together. The two men gave a joint presentation to financial analysts earlier this summer, a task Gates usually reserves for himself.

"You could tell they had good chemistry, and that leads me to believe thats a factor behind this, that Bill really trusts Ray to invigorate Microsofts strategy, to move beyond the CTO role and to look at this new purview of, How can Microsoft more effectively compete with the likes of Google [Inc.]?" said Mike Gilpin, an analyst at Forrester Research Inc., in Cambridge, Mass.

"I think he has a real understanding of not just collaboration and targeting the audience for Groove but also the broader strategic issue of what is that business model exactly that allows Microsoft to make money off services," Gilpin said.

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