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Microsoft Program to Help Give Startups a Start

Microsoft has long said that what is good for its partners is good for the software giant. To prove the point, Microsoft launched the Startup Accelerator Program to give startups special access to Microsoft internal resources.

"We're a platform company, and we do well when our partners build things on top of our platforms," Dan'l Lewin, corporate vice president of Microsoft's strategic and emerging business development, told InternetNews.com.

Under the Startup Accelerator Program, the company is providing custom access to technical and marketing resources inside Microsoft to companies it has identified as "high-potential software startups," according to Lewin. The company identifies such candidates as "innovative, compelling, disruptive and potentially strategic to Microsoft."

Companies chosen to participate "will receive customized engagement plans to support their software development, provide accessibility within Microsoft and increase market visibility," according to Lewin. And Microsoft can introduce companies to venture capitalists if they need financing.

Microsoft chose 20 companies as initial participants, including online tutoring firm Tutor.com, video advertising network YuMe, social-networking firm Wallop Technologies, Internet ad insertion service Kiptronic and 3-D media self-expression company iBloks.

The program is international and has already been extended to a total of 15 countries, including the UK and France.

Microsoft has been doing much the same thing in a more ad hoc manner for some time. For instance, it has previously worked with MySpace, server consolidation company PolyServe (recently acquired by HP), and RSS news feed firm NewsGator toward the same aims.

Entellium, another one of the 20 companies in the inaugural group, provides on-demand customer relationship management (CRM) software as a hosted service over the Web -- built on Microsoft's platform. The company's target audience is small and mid-sized businesses. Because application software resides on the client, users are able to work offline, as well as online.

"It's been a high-touch process. Particularly the Emerging Business Team has been a matchmaker for us in making contact with people on key product teams," Jared Ruckle, Entellium's director of product marketing, told InternetNews.com.

The next version of Entellium's CRM product will take advantage of the Windows Presentation Foundation (WPF), the new graphical interface engine under the hood of Windows Vista. And the interest for Microsoft is easy to see – by using a custom client on the end-user's PC, Entellium's CRM offering fits nicely into Microsoft's "software plus services" strategy.

"Our UI is demonstrably different than just a Web browser-based application," Ruckle said, adding that Entellium's may turn out to be the first business application to take advantage of WPF.

Microsoft's Startup Accelerator Program is similar to a startup incubator program Salesforce.com launched in April.

Under that plan, companies pay $20,000 in order to maintain an office in a Silicon Valley complex with other startups that Salesforce.com has identified, and they have much the same sort of access to Salesforce.com technical resources as companies under Microsoft's plan.

Similar but different, says one analyst.

"The breadth of what Lewin can look at is very broad, whereas, as I understand it, Salesforce.com's [incubator] is looking at only business applications," Tim Bajarin, president of strategic consultancy Creative Strategies, told InternetNews.com.

Bajarin also said that, with Lewin at the wheel, he has a lot of confidence that Microsoft can make its Startup Accelerator Program work. Lewin, he pointed out, has a good track record and used to work for Steve Jobs both at Apple and at NeXT, Jobs' startup that was later sold to Apple.

There are still challenges ahead, however.

"The one thing they have to do is move faster [because] in the past, when Microsoft looked at emerging technology trends, companies that should have been strategic investments were 'taken under consideration,'" Bajarin added. "They can't afford to waste that kind of time."