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Marcelo Calbucci

Guest Commentary: This week Microsoft made a big announcement by providing TechStars startups up to $60,000 worth of Windows Azure services for two years. That’s huge. I have never seen Amazon or any other cloud provider, or any other provider of anything, offer this much.

It’s an exciting opportunity for those startups, but it also shows that Microsoft has not been getting enough traction with the startup community.

Let me roll back to a blog post I wrote exactly 3 years ago, shortly after Microsoft launched Azure:

“… I have a final piece of advice to Microsoft: Don’t look for inspiration for innovation on the enterprise. Innovation comes from Startups. Although the enterprise revenue probably is 100x the startup revenue for you, every piece of innovation in computer history came first from a startup…”

Yes, Microsoft didn’t listen to me. It became clear when I tried to learn Azure, followed by getting a sticker shock when I considered moving my blog to Azure.

Microsoft is a slave to its own success on the enterprise. Visual Studio, SQL Server, Exchange Server, Office and many other Microsoft process are category winners inside the enterprise. Microsoft makes so much money on these products that once it sees a new category, its first instinct is to ask how to push it to the enterprise. How to upsell it or bundle with some other product. It makes short-term business sense. It can create a new $100M revenue stream in year one.

That’s what Microsoft tried to do with Azure. Microsoft invited the enterprise IT managers to help spec Azure. Microsoft asked the enterprise department how much would they pay for this or that.

Just to be clear, I don’t wish Azure any harm. I want it to succeed, but right now I can’t adopt Azure because it’s incompatible with the price I can pay (and I can pay a lot) and it’s incompatible with the quality of service I need.

Here is what I recommend Microsoft do to make Azure more appealing to startups:

  1. Give a significant discount to startups: Beyond the free tier and the BizSpark credits, we still need to slow down our cost. The primary problem with consumer startups is that the audience comes way ahead of revenue. I might have a million users on my site and yet I’m trying to figure out my revenue model.
  2. Make deployment much easier: The difference between a hacker using Azure one time or using Azure a dozen times to build products is highly correlated to how painful you make the process of setting up and deploying on Azure. In other words, a developer with a bad experience deploying in Azure will be a lot less likely to pick Azure for his next project. Even worse, he’ll be influential in the decision of their friends of not picking Azure.
  3. Make deployment faster: This dialog happened last week: Me: “SoftLayer takes just about 1 hour to get a new physical server installed and ready to go for me.” Developer-using-Azure: “Wow, that’s almost as fast as getting a new Azure instance going.” Microsoft, that’s not good for you. This is the kind of brand association you don’t want. Don’t give excuses about the architecture or VMs or anything. Just fix it.
  4. Go where startups are: When AWS was getting started they were at every single startup event in Seattle. Jeff Barr, who was their first evangelist, would go to events and talk to people. They even created the “AWS Startup Challenge.” They obsessively focused on early-adopters (aka, Startups). One time they did an event for 500+ entrepreneurs and developers in Seattle to talk about their stuff. Maybe I’m just being blind, but I don’t see Azure evangelists doing the same thing.

One of the reasons I created the Dot Net Startup meetup was to try to get startup folks talking about the shortcomings (and benefits) of the Microsoft stack so we can bubble up feature requests to Microsoft.

Traditionally, Microsoft has designed its platform in a top-down style, but clearly the company is more and more involved in Open Source and community-driven initiatives like NuGet. I’d love to use Azure, but from what I learned so far and what my entrepreneur friends are telling me, it doesn’t make good business sense.

Marcelo Calbucci is the Co-founder & CTO of EveryMove, a startup creating an incentive platform for your physical activity and a former Microsoft employee. He’s also the organizer of the Dot Net Startup meetup. You can follow him on Twitter @calbucci or on his blog.

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