New Version of Groove Gives Small Businesses a Secure Virtual Office; No Server Required.

Business Editors/High-Tech Writers

BEVERLY, Mass.--(BUSINESS WIRE)--March 15, 2004

Groove(R) version 3.0, now available in beta,

addresses the changing nature of work with new capabilities

such as server-less file sharing 

Groove Networks Inc., a leading provider of virtual office software that lets teams of people work together securely over the Internet as if they were in the same location, today introduced enhancements to its software that are particularly significant for small businesses. The enhancements, including a "server-less," secure file-sharing technology, a powerful forms tool enabling end-users to rapidly create and customize distributed applications, and a streamlined user experience, make it even easier for small businesses to coordinate distributed teams, projects, and businesses processes. The enhancements also help small businesses minimize technology expenses, including file and application servers (and requisite maintenance and consulting), third party email storage, and application service providers.

The new capabilities are included in Groove v3.0, whose public beta program was announced today (see separate news release). Licensed small business customers running Groove Workspace version 2.0 or higher can download Groove v3.0 beta software today from www.groove.net. Unlicensed users wishing to try the new version must first purchase Groove Workspace v2.5 from the Groove online store at www.groove.net/shop.

Small businesses today use Groove software as a low-cost, secure, zero-IT solution to support their geographically distributed, increasingly mobile, multi-company teams that work in the office, from home, in hotels, and at customer sites.

"Groove has allowed us to reduce cost and experience significant productivity improvements by enabling a high degree of collaboration among our geographically distributed workforce," said Kyle Spencer, President & CEO of InSource Partners, a 100-employee consulting company supporting domestic and international clients through five offices in the United States. "We outsource our email and Web hosting services and use Groove as the cornerstone of our collaboration and intellectual property management. It's an effective solution for sharing files and company information, managing projects, messaging, interacting with clients, and more. We're eager to begin using the new capabilities in Groove version 3.0."

Small Business Is Big Business

Small businesses are the dominant employers in the United States. Half of American workers are employed in companies with fewer than 100 employees, and 90 percent of the country's 60 million businesses have fewer than 20 employees, according to the Small Business Administration. Many of these small companies operate like miniature enterprises, with supply chains, distribution channels, external outsourcers, and dispersed customer bases. Accordingly, their staffs and offices are becoming more distributed, remote, and mobile.

Servers Don't Serve Small Business

As small businesses decentralize their operations, they need technologies that let them operate productively in a virtual work environment. Server hardware and software vendors seeking to capitalize on this demand are promoting inexpensive, stripped-down servers for messaging, calendaring, file sharing, and collaborative business applications. Yet research indicates small businesses, particularly those with fewer than 20 employees, are not readily adopting server-based computing.

In fact, of the 7.7 million small U.S. businesses with fewer than 100 employees, only 28 percent have a server, while 72 percent have multiple PCs, according to a recent study by Access Markets International (AMI) Partners Inc. Groove virtual office software allows small businesses like these to create a "server-less" network simply by linking individual PCs securely across their local networks and the Internet. This virtual network allows employees and external parties to share information and work together as if they were in the same location. Groove software operates primarily in a direct peer-to-peer fashion between PCs, but automatically utilizes internet-based relay services when asynchronous use or firewall transparency is required.

"The heightened interest we're seeing from small businesses, particularly those with less than 50 employees, validates two trends: 1) Like their larger counterparts, small companies are becoming more mobile and distributed as their business operations and external relationships expand; and 2) client/server and Web-based information sharing and collaboration tools aren't practical for smaller companies that lack the technical know-how to maintain the solutions in-house, or the budget to pay monthly fees to service providers," said David Fowler, Groove Networks' VP of marketing. "Groove version 3.0 simply enhances and extends the investments small businesses have already made in Windows PCs, Microsoft Office, other desktop applications and the Internet. It makes the most of the desktop."

Groove Secure File Sharing

One challenge faced by small businesses is the lack of an efficient and cost effective way to organize, share and work on files among dispersed employees, customers, partners and suppliers. Groove v3.0 provides a remarkably easy and intuitive method of file sharing by enabling individuals to use the Windows PC file system to share information and work with one another. The software's new secure file-sharing technology enables standard Windows file folders to automatically be synchronized across any number of users' own PCs, or shared among multiple users, even across firewall boundaries. The back-and-forth volleying of emails with file attachments can be eliminated as remote file sharing and collaboration occurs directly within the Windows Explorer. Individual employees can use this encrypted folder synchronization technology to securely synchronize business files between home and work PCs, avoiding the time and trouble of emailing or manually transferring documents back and forth.

No File Server or Back-Up Costs

By utilizing the processing power and disk drive storage of individual PCs, Groove file-sharing can save small businesses thousands of dollars in expenses associated with file servers and maintenance, hosted email and Web site storage, and external storage media. And because files within Groove file-sharing workspaces are stored on all participating users' PCs, they are always accessible and automatically backed up.

Rapid Applications with Groove Forms

For small businesses with limited IT resources, capturing, storing, and tracking structured business data, such as customer orders or product inventories, can be even more challenging than sharing files. Hosting business applications internally is impractical for small companies that cannot afford the expenses of server ownership and operation, databases, and maintenance. Outsourcing business processes to a hosted application service provider (ASP) is an option, yet industry research suggests small businesses are uncomfortable doing so. In a recent survey, Gartner found that only a small minority of SMBs plans to outsource inter-enterprise processes such as supply chain management and sales, marketing and customer care.(1)

Groove v3.0 enables small businesses to capture, track, and analyze business data inside forms applications that can be built without any software development training. As a result, they save thousands of dollars per year on ASP fees and keep their data on their own PCs. Moreover, because Groove forms applications utilize users' PCs to store and synchronize data, small businesses can eliminate the inefficient, error-prone process of passing spreadsheets or database files back and forth via email.

No Programming Required

Using the dramatically improved form-based application environment in Groove v3.0, small businesses can choose one of the new project or business process application templates, or create a custom application from scratch. The new form designer, with an intuitive graphical display and drag-and-drop capabilities, lets end users build customized applications without any software development skills or training.

Groove form-based applications reside within Groove workspaces, putting business data in context of teams, projects, and processes, and making that data immediately yet securely available to third parties and mobile employees. Data can be viewed, sorted, and searched within the application. To serve desktop productivity needs, Groove forms supports comma separated values (CSV) based exchange of data with spreadsheets, databases, or other analytical tools. Advanced users can also integrate forms data with databases via a new Web services development environment.

Improved usability and performance

Ease of use and reliability are key factors for all small businesses with limited or no IT support. Already recognized for its ease of use, Groove version 3.0 provides an improved user experience via a streamlined user interface that helps individuals become productive quickly. Noteworthy enhancements include:

-- Groove LaunchPad - a new starting point that makes common

tasks related to workspaces and contacts available from a

single location, and provides awareness of user presence and

activity occurring within individual workspaces;

-- Groove Workspace Explorer - an improved, customizable user

interface for working within Groove workspaces;

-- Expanded Alerts - improved visual, audible and "spoken"

notifications that signal when individuals come online, enter

workspaces, and perform important activities; and

-- Improved Performance - speedier start-up, downloading and

navigation; and reduced network bandwidth consumption.

Pricing and Availability

Groove v3.0 will be available in the third quarter of 2004. Small businesses must be licensed users of Groove Workspace v2.0 and above to participate in the public beta of Groove v3.0. A 20-percent price increase for Groove Workspace Professional Edition and Groove Workspace Project Edition will take effect July 1, 2004. Prior to July 1, individuals and organizations can purchase Professional Edition for US $149, and Project Edition for US $199. After July 1, 2004, Professional Edition will be priced at US $179, and Project Edition at US $229. Groove Workspace Standard Edition will continue to be priced at US $69. Small businesses that buy Groove Workspace prior to July 1, 2004, can purchase support for each user and save US $40 on a Professional Edition v3.0 upgrade. Pricing for Groove Hosted Relay and Management services will increase by 10 percent on July 1, 2004 as well. Currently, combined Hosted Relay and Management services are priced at $70 per user per year. Groove Networks currently operates relay servers without term-of-service, or quality-of-service guarantees. Term and quality-of-service guarantees are available for an additional fee.

System Requirements 

Groove v3.0 runs on Microsoft(R) Windows NT(R) 4.0 (with Service Pack 5 or later), Windows(R) 2000, or Windows(R) XP, and requires Microsoft(R) Internet Explorer 6.0. The software requires a PC with an Intel(R) Pentium(R) 400 MHz or higher processor (or equivalent) with a minimum of 128MB of RAM, 100 MB of hard disk storage, and a 56 kbps modem (local area network, DSL or cable modem preferred). A sound card, speakers and microphone may be required to use the software's voice and audible alert features.

About Groove Networks

Founded in October 1997 and headquartered in Beverly, Mass., Groove Networks Inc. delivers the "virtual office" through software that allows teams of people to work together over a network as if they were in the same location. Groove software helps organizations, large and small, save money, time and eliminate travel by offering both a desktop application for instant joint work, and a set of customizable, open collaboration capabilities that enhance the utility and value of existing solutions. For more information about Groove Networks, visit http://www.groove.net.

Groove Networks and Groove are registered trademarks of Groove Networks Inc. All other trademarks are owned by their respective companies.

(1) "BPO Is Key Back-Office Strategy for Most SMBs," November 12, 2003, Robert H. Brown and Rebecca S. Scholl