Microsoft, TechStars Unveil New Program for Azure Cloud Services

Updated 3 pm with correction
Microsoft is taking its relationship with startup accelerator TechStars to another level. Today, the software company revealed that it’s sponsoring a second startup program based around the TechStars model, this time for companies that use Microsoft’s Azure cloud-computing service.

That’s in addition to the Microsoft-TechStars accelerator based on the Kinect motion sensor, which recently started in Seattle. And it’s apparently no experiment—TechStars CEO David Cohen writes that the Kinect and Azure flavors of the Microsoft-TechStars accelerators will be an annual fixture.

I couldn’t find any word about who will be running the Azure accelerator, which will be in the same Microsoft offices in Seattle’s bustling South Lake Union neighborhood, a tech hub dominated by Amazon’s quickly growing headquarters.

It’s a notable commitment by Microsoft and a major endorsement for TechStars, which operates its original accelerator programs in Seattle, Boston, New York, and Boulder, CO, along with a new cloud computing-focused offshoot in San Antonio, TX. [Corrected cloud program city to San Antonio.]

The Microsoft partnership is a little different from that traditional model—TechStars is essentially loaning its accelerator program and expertise to Microsoft, which in turn gets exposure to young companies. The expansion also helps TechStars increase its pool of seed-stage investments.

This move also re-emphasizes just how many startup accelerators and incubators there are at the current moment, which has in turn generated some prominent criticism of the way those models are being implemented (this post from Founder’s Co-op’s Chris DeVore is a great example). While big companies have always maintained tendrils reaching out into the startup world as a way to keep their brands lively and find interesting entrepreneurs and ideas, the growth of digital entrepreneurship generally and the programs aimed at fostering that growth has given tech giants like Microsoft and Google new wagons to hitch themselves to.

The basic outline of the Azure accelerator is the same as the Kinect version: Companies are encouraged to apply from around the globe, with 10 chosen to come to Seattle for a three-month development program. The guts of how the accelerator works are where the TechStars involvement really comes into play.

The chosen startups all get $20,000 in seed funding from TechStars in exchange for 6 percent common stock in their nascent companies, along with access to a wide array of mentors as they build their initial products and services. For the new Azure program, Microsoft also throws in $60,000 worth of free cloud-computing services and access to Microsoft’s existing startup-assistance program, BizSpark.

Although the program is specifically focused on Azure, it’s actually open to pretty much any type of tech startup, from enterprise software to mobile games—they just have to use Azure services. That said, it seems like the entries that float to the top will probably be well-served to say something about how they’d take advantage of Azure’s features.

“Your company does not necessarily need experience developing on Windows Azure, but the business concept does need to leverage Windows Azure capabilities as part of the final offering,” Microsoft says on its homepage for the program.

Applications are open now for the Azure accelerator, with a deadline at the end of June. The three-month accelerator will start in August, with the traditional demo day pitch session for possible investors at the end.

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