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Groove's client software lets users share and edit documents in real time over the Internet. The product has Groove's instant messaging software built in, allowing users to communicate while collaborating on documents.
Groove Version 1.3, made broadly available on 29 October, is geared to run most efficiently on Windows XP. The software shares a similar user interface to XP and makes use of the instant messaging technology built into Microsoft's latest operating system, Groove said.
As part of the integration between the products, users of Groove's peer-to-peer application can now chat with Windows Messenger users.
Groove now has a "privileged relationship with Microsoft", said Gartner analyst Rob Batchelder, adding that a recently announced financial deal between the companies provides an incentive to build compatible technologies.
Groove, founded in 1997 by Lotus Notes creator Ray Ozzie, secured a $51m (£35m) investment from Microsoft on 10 October. The startup said at the time that it would work with Microsoft to develop and market peer-to-peer technologies.
"Microsoft, prior to this, has been very open to working with companies to create hooks to operate with its MSN network," said Batchelder. "This is just another manifestation of that."
Before this release, Groove users could only chat with each other using the messaging software included with the peer-to-peer client. Similarly, Windows Messenger users could chat only with other Messenger users.
Groove Version 1.3 also lets users share and collaborate on Microsoft Office documents, so that multiple users can simultaneously edit a Microsoft Word document, for example, from separate desktops.
The relationship between Microsoft and Groove points to a new direction for the Seattle software giant. The company wants to enhance the real-time communication features in its products, analysts said.
"Microsoft seems pretty keen on the idea of peer-to-peer communications, and although the majority of consumers really identify it with sharing music and video, there are an increasing number of companies taking that technology and building it into their corporate networks," said Matt Bailey, an analyst at research firm Webnoize.
Groove also announced that it has sold 10,000 licences for the software to Dell, which will use it to let employees share documents and communicate in real time through the Internet. Other Groove customers include GlaxoSmithKline.
Groove Version 1.3 will be available for enterprise customers in the US by the end of November. The application will cost $49 (£33) per user for the basic software. Test versions of Groove's enterprise products can be downloaded free of charge from Groove's Web site. They will be available to buy during the first quarter of 2002, the company said.