Microsoft’s BizSpark initiative offers free servers and software to startups

Updated

With an initiative called BizSpark, software giant Microsoft is making a new pitch for startups to run their business on Microsoft’s tools.

It’s an enticing free upfront three-year package, bundling together software, support and promotion for no upfront cost — requiring merely a $100 payment when you leave the program. It’s an aggressive move by Microsoft to ensure that technology startups at least consider using Microsoft’s tools when they are putting together their initial infrastructure — and comes a time when competitors are bidding for the business of those same startups by offering them low cost, often open source alternatives.

Dan’l Lewin, vice president of strategic and emerging business development, says that Microsoft has already put a number of startups through a trial of the program, and the company plans to enroll thousands of startups in 83 countries in the next six months or so. The participants are nominated by BizSpark’s hundreds of “network partners” — including the National Venture Capital Association, The Indus Entrepreneurs and other economic development agencies, university incubators, hosters and investors — and must meet three criteria: They must be a private company, less than three years old and making less than $1 million in annual revenue.

If they meet those criteria, companies will get a free three-year license to Microsoft software and servers including Visual Studio, Windows Server and Microsoft SQL server. They will also get access to business and technical support from the aforementioned network partners, and they will be promoted on the Microsoft Startup Zone site. Microsoft already been targeting startups through the Startup Zone (and related programs such as the Startup Accelerator), but Lewin says that was aimed at venture-backed companies with global ambitions. It sounds like BizSpark will be reaching a much broader range of companies.

With the negligible cost, BizSpark presents a pretty irresistible offer to startups, especially in tough economic times — assuming you’re willing to build on Microsoft’s platform. Less charitably, you could look at this as Microsoft‘s effort to stay relevant in a world where startups can choose to build on many competing platforms, and as more and more startups are moving towards a cloud computing model, where Microsoft is playing catchup to companies like Amazon, Google and Rackspace. When asked why Microsoft  is launching BizSpark, Lewin cites a lyric from the Talking Heads song Once in a Lifetime: “Same as it ever was.”

“Microsoft has always been about the developer community,” he says.

He adds that BizSpark isn’t about forcing companies to use Microsoft products exclusively, so the initiative will support interoperability with other platforms and services.

There are already some notable startup names signed up, including Xobni, which offers a powerful way to organize your email in Microsoft Outlook, and ZocDoc, an online medical appointment-making service backed by big names like Amazon’s Jeff Bezos, Khosla Ventures and Salesforce.com‘s Marc Benioff.

ZocDoc chief executive Cyrus Massoumi says Microsoft approached him to join the program at this year’s TechCrunch50 conference, where ZocDoc had a booth. The startup has now been part of BizSpark for about six weeks, and although the service was already built on Microsoft’s platform, Massoumi and chief technology officer Nick Ganju say the program has already paid off by connecting them with expert help when needed, and helping them increase the site’s security and scalability.

The free software is nice, Massoumi says, but he’s even more excited about “being able to get access to people at Microsoft who are building these products. This is stuff that we couldn’t buy.”

Update: Here are the details, courtesy of Docstoc: