Microsoft Opens Its Cloud to Y Combinator Tech Startups

The company will contribute software, expertise and Azure cloud resources to help technology startups bring their innovations to market.


Microsoft is teaming with Y Combinator, the Mountain View, Calif.-based startup accelerator, to help fledgling tech firms take off.

"Partnering with Y Combinator is both an extension of our commitment to startups, as well as an expression of Microsoft's culture and values to add greater value through partnering than by going it alone," remarked Steve Guggenheimer, Microsoft chief evangelist and corporate vice president of Developer Platform & Evangelism, in a Feb. 9 announcement. "We continue to invest in the Startup ecosystem and to look for opportunities to foster innovation around the world, both directly and through our partners."

As part of the alliance, Microsoft is providing Y Combinator's current class with $500,000 in Azure credit, which can be used toward the Redmond, Wash.-based software company's growing suite of cloud services. In addition, participating startups are entitled to three years of Office 365 and access to Microsoft's engineers.

"It is our hope and intention that this partnership will support these startups in defining and scaling their businesses, focusing upon innovation and developing differentiated products," added Guggenheimer.

Azure hosting alone can help turn the fortunes of cash-strapped startups, noted Sam Altman, president of Y Combinator, in a blog post. "This is a big deal for many startups—it's common for hosting to be the second largest expense after salaries."

Three years of Office 365 and access to Microsoft's developers aside, Altman said that startups also get a free year of CloudFlare, the DDOS (distributed denial-of-service)-blocking cloud security service, and DataStax, the fast-growing Apache Cassandra NoSQL big data startup.

Microsoft's contribution helps pad each startup's toolkit with up to seven figures' worth of perks, according to Altman. "This brings the total value of special offers extended to each YC company to well over $1,000,000," he said. "The relentless nagging from partners to grow faster we throw in for free."

The Microsoft-Y Combinator deal follows just weeks after Microsoft announced that a batch of startups graduated from its own accelerator program.

Eleven new data security and health care IT companies completed Microsoft Ventures' accelerator program, which the company conducted in partnership with content delivery network (CDN) provider Akamai and Jerusalem Venture Partners. The firms, some of which are already entertaining offers for funding, range from Capy, a Japanese startup that develops puzzle-based CAPTCHAs, to Kinestica, a Slovenian company that creates medical devices for neurological patients.

Last summer, Microsoft and American Family Insurance turned their attention to startups in the burgeoning Internet of things (IoT) and home automation markets.

On Aug. 13, the companies announced that they were backing 10 smart home startups. "The Internet of things, and home automation in particular, is rapidly emerging," said Guggenheimer in a statement at the time. "With consumer demand growing for solutions that are intuitive, connected and affordable, there are tremendous opportunities for new players in the space."

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...