Microsoft Makes Pitch to Startups with Free ToolsBy Josh Catone
At the first day of the Web 2.0 Summit in San Francisco, Microsoft announced the launch of BizSpark. The program is designed to help early stage startups by providing them a bevy of Microsoft development tools and services for free, while simultaneously ensuring that a new breed of web apps are developed on Microsoft’s web development stack.
Any company making under $1 million in revenue (less in certain geographic areas) and in business for less than three years is eligible for the BizSpark program. The program will give those who join access to a variety of Microsoft tools free of charge, including MSDN memberships, Visual Studio, Office, Windows, SQL Server and other licenses, and opportunities for mentoring from Microsoft partners. The program also promises to connect participants to investors and get them visibility via profiles on Microsoft sites.
The full list of software and services available to participating startups is available in the program guide (PDF). At the completion of the program — 3 years or loss of eligibility due to going public, getting acquired, etc. — BizSpark participants must pay a program fee of US$100. They can continue to use the software they’ve been given but must pay license fees and negotiate terms for hosting contracts.
This isn’t quite the Y Combinator-style investment strategy we pitched for Microsoft in August, but it is a step in that direction. Microsoft isn’t investing directly in startups, but they are providing a juicy incentive — free tools, mentoring, and the chance to meet investors — for startups to use Microsoft tools. That’s an indirect investment that should pay dividends for the company down the road.
Microsoft knows that computing is slowly moving to the cloud, and they also know that much of that development and deployment is being done using tools that they don’t control — PHP, Ruby on Rails, Linux, Apache, Amazon’s Web Services, etc. — with BizSpark, Microsoft is hoping that a number of future web startups might be created using their tools and a new generation of developers would be introduced to those tools as well as a result.
According to Mary Jo Foley, Microsoft isn’t requiring developers that sign up for BizSpark to use its own recently announced cloud infrastructure and services, such as Azure (our coverage) and Live Mesh (our coverage), but it is encouraging their use. That’s a smart move, by Microsoft, since less catches and more perceived freedom should help attract more developers to the program.
In the long run, even if none of the startups that use BizSpark pan out, the result will be a net positive for Microsoft, who will have trained up a legion of developers on their tools.