Page last updated at 18:18 GMT, Wednesday, 5 November 2008

Microsoft gives start-ups leg up

By Maggie Shiels
Technology reporter, BBC News, Silicon Valley

An investor looks at a share prices board in Tokyo on 18 September, 2008
Microsoft said the project's timing amid a financial downturn wasn't planned

In a bid to win over future business, Microsoft has announced a programme to give some start-ups free software and support.

BizSpark is a global project open to private companies that have been in business for less than three years with less than $1m in annual revenue.

The software giant is partnering with business networks around the world as well as government agencies.

"We're building a customer base for the future," said Microsoft's Dan'l Lewin.

"The rising tide of people building new companies, building successful companies using our product is good for us because we share in that over time. The goal is to remove any barriers to getting going." he told BBC News.

To take part in BizSpark, selected start ups must also gain the recommendation of a venture capital firm, business network or a so-called "Microsoft Champ", one of the 1,000 company employees around the world focused on software developers.

Those who qualify will get a three-year subscription to the Microsoft Developer Network as well as cloud services technologies.

'Fundamental challenge'

Microsoft has said in the past it has recognised that for some start ups, its products had been too expensive and suggests that BizSpark is a way to take away that roadblock.

"One of the primary concerns for companies is finding access to our technology. Sometimes the up-front costs can be a consideration and we wanted to remove those barriers," said Mr Lewin, vice president of strategic and emerging business development at Microsoft.

That's a view backed by one of the network partners, TiE Global, a non-profit network of entrepreneurs and professionals that aims to foster and nurture entrepreneurship.

"We think Microsoft BizSpark addresses a fundamental challenge start ups face: access to current, full-featured tools and technologies that help turn ideas into a thriving business," said Suren Dutia, TiE's chief executive.

One company that has been involved with Microsoft on this project is Xobni, which is an Outlook add-in that organises searches.

"Microsoft is a lifeline when we find a bug in Outlook...we have quick access to the team at Microsoft that has the answers," said Xobni's Matt Brezina.

"Microsoft has easily saved us $10,000 (6,200) in software costs through this program."

The timing of the project could not be more apt in the midst of an economic downturn, but Mr Lewin said that was just coincidence.

"Our goal was always to launch this off the back of our Developers Conference held last week but regardless of the time, entrepreneurs are not dissuaded by poor economic times.

"Great economic companies get started in a downturn. It is timely to make an offer like this is a moment in time when for many companies these costs could be an inhibitor," said Mr Lewin.

Microsoft said it was unable to put a value on the cost of giving these services away because each start up will be so different.

When the start up leaves the programme, either by staying in business for three years, being acquired or surpassing the revenue limit, they will owe Microsoft a $100 (62) fee and then transition to the normal licensing fees for the software they continue to use.

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