Groove Networks Inc. this week will introduce Groove Virtual Office 3.0, the first version of the company's peer-to-peer collaboration software (formerly known as Workspace) to offer truly contextual collaboration: The software takes collaboration to users, rather than bringing users to the collaboration.

Groove 3.0 users can share files and folders directly from the Windows Explorer desktop file system, rather than having to copy them into Groove first. Users also have more options for setting up alerts that notify them when content in a Groove workspace is changed or simply if another project team member has logged on to a workspace. "The fact that Groove is much more flexible in the way people choose to interact with it will make it much more usable," says Peter O'Kelly, an analyst with research firm Burton Group.

The new version gives IT departments a set of prebuilt templates to develop collaborative apps that focus on particular business processes, as well as the ability to build custom forms that hook into back-end enterprise-resource-planning and customer-relationship-management systems. A new dashboard can manage multiple workspaces, and the management server has been beefed up with audit capabilities.

But the new features take a backseat to what have been Groove's main attractions all along: synchronization and security. The U.S. State Department had security in mind when it decided in May to go with Groove to manage the formation of the U.S. Embassy in Iraq, which opened June 28. The State Department had to take over thousands of contracts formerly managed by the Defense Department; hundreds of people had to be accounted for as they entered and left the temporary facility; and it had to coordinate with three other federal agencies.

"We needed to move a lot of data securely, and there weren't any other products that did what we needed to do," says Glen Johnson, director of the State Department's Iraq transition-management staff. He's seriously considering upgrading to the new version. Says Johnson, "Down the road, we'll take a look at a lot of the new features."