Acquisition Moves Collaboration Strategy Forward

PlaceWare, a provider of Web-based virtual conferences, has agreed to be acquired by Microsoft for approximately US$200 million. PlaceWare, which will become a core part of a new Real Time Collaboration group in Microsoft, will provide a hosted collaboration solution for businesses and could help drive sales of Microsoft desktop applications that link to the service. In addition, PlaceWare’s expertise and technology could help Microsoft build a successor to its current conferencing software, Exchange Conferencing Server (ECS) and NetMeeting, helping it compete with collaboration offerings from IBM and Oracle.

Although PlaceWare does not fit Microsoft’s usual criteria for an acquisition-it uses non-Microsoft technology and runs a hosted service-Microsoft chose it over other candidates for its ease-of-use and scalability. More generally, the investment highlights Microsoft’s belief that real-time collaboration will someday become as widespread among businesses as e-mail. Still, Microsoft must take steps to clarify its collaboration strategy and roadmap if it hopes to attract the customers it expects.