With Eye on Future, Microsoft Offer Startups Freebies

Updated: Microsoft, in an effort to woo startups and combat the open source movement, is going to start offering free software and online services to certain types of startups across the world, the company announced today. This effort, dubbed “Biz Spark,” will be rolled out across the world in 82 countries. Here are some facts about this plan:

  • Network partners such as TIE and NVCA will nominate the startups.
  • To qualify for the program the startups need to be less than three years old.
  • To qualify for the program the annual revenues of these should be less than a $1 million but they can grow to be any size.
  • The deal expires if the startups go past $1 million in revenues and/or once they celebrate their third birthday.
  • If they leave after three years, startups pay $100 as an exit fee and then transition to a market-price fee structure. Of course, they can take all their data with them. The free ride ends if a larger player snaps up the company.
  • Startups get a three-year Microsoft Developer Network (MSDN) Professional subscription that will allow them to download lots of tools, including those for building apps on the Microsoft platform.
  • Startups get a free production licenses for application hosting and management servers including Windows Server, Microsoft SQL Server, Microsoft Office SharePoint Portal Server, BizTalk Server and Systems Center and soon, Microsoft Dynamics CRM.
  • Startups will be included in the BizSparkDB, an online startup directory. Microsoft cloud services including Azure will be available for free to these startups.

Microsoft has offered similar deals and sops to startups over the past few years, but now the company is making a global-scale effort, said Dan’l Lewin, corporate vice president of Strategic and Emerging Business Development at Microsoft.

He explained that this is part of the effort by the company to woo developers to its platform. Historically, developers have been the real strength of Microsoft. However, the turn-of-the-century tech bust turned developers to open source tools and newer platforms and languages, thus shunning Microsoft. “Most companies pick a pony and stick with it,” acknowledged Lewin. By offering free options, companies will hopefully see “value in our environment.”

Lewin, one of the rare candid Microsoft executives, believes in time when web has changed the technology landscape, and this offering is a natural thing for Microsoft to do. “The world changes so you need to adapt to it.”
I just wonder if they will be successful. I give you the example of one company – us.

When we were starting GigaOM, the company, the idea of buying software from Microsoft never crossed our mind. We used open source software for our infrastructure and publishing needs. Our technology team downloaded development tools from the web. We signed up for Google Apps when they became available – mostly because they didn’t cost us anything.

Instead of Microsoft Exchange we signed up for Gmail. Skype did the job for our communications needs. And Google Apps provided us applications that were good enough. To some extent we represented the new technology-related startups that looked at open source or online applications to fulfill their current and future needs.

Sure we bought a few copies of Microsoft Office for Mac – but we didn’t plan on Microsoft being part of our future software and technology needs. In 28 months, we are much bigger in size and in employee count – and we still don’t spend much money on Microsoft – barring Office for Mac. And as for our developers – they don’t dot-net. Microsoft has a big hill to climb, and I am glad they are trying to get going rather than waiting and doing nothing.

Related Link: Microsoft Startup Zone & BizSpark site.

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