Microsoft is giving away free software to early-stage web start-up companies as part of a worldwide programme called BizSpark launched.
Companies seeking to benefit from the programme need to team up with a BizSpark Network Partner, organisations, Microsoft says, that specialise in promoting and supporting software startups through programmes, mentoring, networking, business advice, financial assistance, and so on.
BizSpark aims to help startups get off the ground by providing production licences and technical support for several Microsoft products. The licences are free for the first three years, after which the startups must start to pay.
The programme aims to create a catalyst for small startups, says Microsoft New Zealand's country manager, Kevin Ackhurst. It also gives startups the opportunity to contribute to the GDP. With 8.7% growth, the local technology industry has a lot of potential, he says.
Getting more local firms to compete globally is mission critical for getting New Zealand's economy on par with its OECD counterparts, says David Skilling, chief executive of the New Zealand Institute. In theory, all you need for building a successful business like Rod Drury's Xero are a couple of smart people, a business model and a decent broadband connection, he says. But broadband speed, investment in research and development and education are not even close to where they need to be, says Skilling. "We need a clear agenda for action, and initiatives like [BizSpark] are critical," he says.
Rod Drury agrees that broadband is the greatest barrier for local startups to get their businesses off the ground. But buying the tools you need to start programming is also a huge barrier, he says. Now, however, developers will be able to start coding straight away. With access to "some of the best tools out there", it is now possible for startups to build sustainable internet-based businesses from New Zealand, he says.
The programme is available for startups with up to 25 developers, says Scott Wylie, director of the developer and platform strategy team at Microsoft New Zealand. He estimates a company can save around $5,000 per developer in Microsoft Developer Network (MSDN) Premium subscription fees by participating in the programme.
As well as helping startups, the programme gives Microsoft a way to promote the use of its software at a time when open-source alternatives have matured, and as rivals such as Google and Salesforce.com are promoting their cloud platforms for building web applications.
ZocDoc, a New York-based company that offers an online service for booking doctor and dentist appointments, became an early pilot member of the BizSpark programme. It received licences for Microsoft's Visual Studio, SQL Server and Windows Server products.
"We're getting all the Microsoft software for free, so that's great for a startup like us trying to keep our costs low," says CTO and co-founder Nick Ganju. "Some of these software packages can get pretty expensive so it's great to be able to keep our software free for the first few years."
Other products covered by the programme include Office SharePoint Portal Server, BizTalk Server and Systems Center, with Dynamics CRM to be added soon. Startups also get a subscription to the Microsoft Developer Network and a Community Technology Preview of Microsoft's Azure cloud software announced last week.
To qualify for BizSpark, companies have to be privately held, less than three years old, have annual revenue of less than US$1 million, and be developing an online service or hosted application.
They also have to be nominated by one of the partners Microsoft is signing up for the programme, which include investment companies, university incubators and economic development agencies, says Dan’l Lewin, Microsoft's vice president for Strategic and Emerging Business Development.
The partners will be listed at the BizSpark website and startups can approach the groups and ask to be nominated, he says. Microsoft is also partnering with application hosting companies that can nominate startups and may offer them discount services, Lewin says.
Several other vendors offer startup programmes, including Sun Microsystems, which offers cut price servers and its open source software.
Microsoft already offered some free software for startups, but it was for Express editions of its products or for more limited periods of time. The software licences in the BizSpark programme are for the full products with no usage restrictions, Lewin says.
The programme is being launched worldwide, with events planned in the coming weeks in Scandinavia, the UK, Germany and Russia, Lewin says. Launch events will take place in 30 countries over the next several months, he says.
ZocDoc had already decided to use Microsoft software before it joined the programme, Ganju says. It's web application has to synchronise with calendar software on healthcare providers' desktop PCs, which usually run Windows, and ZocDoc wanted to use the same software platform on the desktop and the server, he says.
"You can make desktop apps with Java, but they don't look as native and clean," Ganju says.
ZocDoc's investors include Amazon CEO Jeff Bezos and Salesforce.com CEO Marc Benioff, but Ganju says he wasn't tempted by those companies' cloud services, nor by Microsoft's Azure. He prefers to work with a traditional web hosting provider.
"I think the cloud thing is very promising, it's where things are going in the future, but I'd rather wait for it to mature for another year or so," he says. "I'm still a fan of software running on actual servers."