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Microsoft is deepening its relationship with TechStars, announcing today a new startup accelerator program in Seattle designed for those companies developing cloud-based services on the back of Windows Azure. The program will kick off this fall with 1o companies traveling to the TechStars Seattle incubator space in the South Lake Union neighborhood, which ironically happens to be based just a stone’s throw from’s headquarters.

The new accelerator program follows the recent kick off of the Kinect Accelerator, which started earlier this month at TechStars Seattle. Eleven companies were chosen for the program from more than 500 entrants.

The Windows Azure Accelerator will work much the same way, with 10 companies chosen from the pool of applicants. Those who are accepted into the intensive 3-month program will receive a $20,000 investment from TechStars, as well as mentorship and technology from Microsoft employees and executives. Also, as part of the new program, Microsoft will offer startups $60,000 in Windows Azure credits.

“Through this program, Microsoft and TechStars will help entrepreneurs, engineers and innovators to bring to life a wide range of business ideas that leverage the limitless possibilities enabled by Windows Azure,” Microsoft notes in a release.

The application deadline is June 29th.

Microsoft is looking to play catch-up in cloud infrastructure services, an arena that has dominated for years through its Amazon Web Services offering. Partnering with TechStars is one way for Microsoft to try to get established early with emerging startup companies.

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