Microsoft Wooing Startups to Its Platforms with Free Software, Business Advice

Those enrolled in the software giant's BizSpark program said it has kept them away from alternatives like open-source and Amazon

By Jay Alabaster
Thu, March 01, 2012

IDG News Service (Tokyo Bureau) — Jun Kim, the young co-founder of a Korean software house, was recently approached by a representative from Amazon, who offered him a US$200 credit to develop on its Web Services cloud platform.

"I was like: $200, are you serious?" he said. "Azure could be worth $100,000 if we do well."

Kim was referring to the competing Microsoft cloud platform. His company, GIO Software, gets free use of Azure because it is a member of BizSpark, Microsoft's program to foster startups and encourage them to use its tools to build their products.

Budget-strapped fledgling companies traditionally spurn Microsoft products, opting instead for open-source and cheap alternatives. In 2008, the Seattle-based software giant launched its global BizSpark program, which provides its products for free to private software startups that are less than three years old and make under $1 million in revenue. The program now includes 45,000 companies worldwide.

At the DEMO Asia conference for startups in Singapore this week, Microsoft sponsored booths for a group of young Asian firms. The entrepreneurs at the event said the program was the main reason they now build on Microsoft products.

"We started with MySQL and Amazon Web Services," said Reza Ismail, the director of Malaysia-based DappleWorks, which makes online tools for small businesses.

"It was just two of us, and we knew we needed some help," he said.

Like others here, Ismail said the main motivation for signing on was the free software, which includes office tools like Word as well as subscriptions to the MSDN development platform that run thousands of dollars at full cost. He said the tech support from the program had also been crucial in the early days of development.

Ismail said he was uncomfortable with some parts of the program, such as revealing company secrets to Microsoft employees

"We've had to expose our architecture," he said, adding he felt obligated to do so because of all he had received.

In Singapore, Microsoft employees actively canvas technical universities and incubators to sign up new companies to the program. About 500 local firms are currently enrolled.

"We want startups consuming and using our stuff," said John Fernandes, director of the company's marketing in the country.

Microsoft launched BizSpark Plus at DEMO Asia, an effort to focus on the more successful candidates from the broader pool. The company provides the use of Azure for free or at greatly reduced prices, an effort to steer developers to its cloud platform.

The program also links members in with a support network that includes investors and advisers, and provides publicity and media access.

As time goes on, Microsoft's success at wooing young developers in the region could grow. Eugene Fabian, who runs BizPark at Microsoft in Singapore, said that as the local startup scene matures, entrepreneurs are creating products that support businesses, a focus for the software company.

"These are not the flowery Facebook-type applications," he said. "Now companies are getting more realistic."

DEMO Asia is produced in part by IDG Enterprise, a subsidiary of International Data Group (IDG), which also owns the IDG News Service.

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