The truth is, Microsoft needs Groove, and Groove needs Microsoft.

Microsoft needs inspiration and direction to make their play in the so-called “groupware” or “collaboration” space more complete. Groove needs backing, and a compelling suite of surrounding products to make its core functionality more relevant.

“Collaboration” is something Microsoft does from the desktop out. That is to say, a knowledge worker owns a work product and in some way shares it, passes it to, and receives updates from other knowledge workers and thus collaborates. This is an inherently different concept of collaboration than the traditional “groupware” approach that is Lotus Notes, where the work product is the result of a centralized design in which each knowledge worker plays some part.

Microsoft’s style is more familiar and useful to management level knowledge workers at the higher end, while the Lotus Notes style “form” is more familiar to the staff level people doing their day to day. Another way of saying this, is that the kind of collaboration you do in Notes tends to be “Applications” built to do something, where the Microsoft model tends to be “Lets work on this document.”

With the move to Workplace Collaboration Services, IBM moves toward a more document or project centric approach, but keeps the forms concept healthy and strong with Workplace Designer. Now, Microsoft with Groove brings a reasonable “forms oriented” kind of collaboration into their “power desktop” approach. I don’t find Groove’s overlap with Notes to be substantial enough to even begin to call it competitive, but it has its own merits that should compliment Microsoft’s suite.

Even more important, as others have pointed out, Groove's “Server-Free Collaboration” fits Microsoft’s strengths and weaknesses perfectly. A Groove that has been successfully and smoothly integrated could make an upgrade to some future version of Office very valuable in the SOHO market. At the same time, IBM doesn’t currently sell well in that market, and its traditional success based in big I.T. shops is completely unthreatened by anything in a combined Microsoft-Groove product offering – which will remain uninteresting to the traditional enterprise shops.

The only impact I can see this having on IBM or traditional Domino shops, is the potential opportunity for new FUD and new marketing-speak to delay new projects for a short time. I don't expect to see much of that though. I think the "Groove" card has already been in play be Microsoft reps for some time now, as this isn't their first investment in the technology.