Microsoft Opens R&D to Small Companies and Entrepreneurs

NEW YORK — May 4, 2005 — At a gathering of venture capitalists today, Microsoft Corp. announced Microsoft Intellectual Property (IP) Ventures, a new program aimed at entrepreneurs and small businesses that will speed the movement of innovative technology into the global market. Microsoft IP Ventures opens up hundreds of internally developed technologies to entrepreneurs and new businesses by licensing and spinning out Microsoft’s innovations to facilitate new product and business development.

“Our research labs and efforts across the company have created a large portfolio of innovative technologies that extend the reach of personal computing today, with much of it going into Microsoft® products,” said Rick Rashid, senior vice president of Microsoft Research. “At any given time, there are hundreds of projects under way at Microsoft. IP Ventures provides yet another vehicle for extending this reach and delivering innovations to customers in a variety of areas.”

Access to a Broad Range of Technologies

Microsoft IP Ventures opens access to a broad range of technology areas. Currently, entrepreneurs can choose from 20 technologies developed by Microsoft researchers and developers. As the program expands, so will the number and variety of technologies available for license. A sampling of the technology areas now available is listed below. A full list can be found at

  • Artificial intelligence. Face detection and tracking, natural language processing for educational courseware

  • Usability. “LaunchTile”

  • Graphics. Personalized facial sketch, cartoon generation

  • Security. Microsoft Biometric ID (digitally signed tamper-proof ID cards incorporating biometric information), counterfeit-resistant optical fiber technology

  • Gaming. Xnav (gesture-based text input and device navigation)

  • Multimedia. Audio correction algorithms for speakers, conference XP (distance conferencing, instruction and collaboration environment), horizontal overscan (broadcasting synchronized data in an analog television signal), “Microsoft Portrait” (mobile video communication), MobiPicture (intelligent mobile browsing of large image), “Wallop” (mixed media online collaborative environment)

  • Databases. Data visualization tools

Licensing Innovations as Building Blocks

IP Ventures was developed in consultation with venture capitalists and entrepreneurs. Microsoft offers a licensing model that can include royalty payments and equity, and is flexible enough for entrepreneurs raising capital.

One example of the many innovations available for licensing through IP Ventures is a technology for mobile video communication code-named “Microsoft Portrait.” “Portrait” runs on local area networks, dial-up networks and even wireless networks with bandwidths as low as 9.6 Kbps. At low bandwidths, the technology delivers portrait-like video with clearer shape, smooth motion, short latency and low computational costs. On broadband connections, “Portrait” displays full-color video.

Another project, code-named “Wallop,” is an online community technology available for licensing. In addition to standard tools for interaction such as buddy lists, “Wallop” creates inferred social networks, which automatically identify whom a user interacts with, not just contacts the user has explicitly added. The technology also enables users to personalize profiles using skins and add Web logs (blogs), music and photos. Users are able to form unusually rich impressions of one another by viewing the content posted in “Wallop.”

A third representative technology available through IP Ventures, code-named “LaunchTile,”enhances navigation on mobile devices by allowing users to browse information, documents and applications easily single handed. Unique to the design of “LaunchTile,” each application has a dynamic launch tile in the place of a static launch icon, facilitating at-a-glance information retrieval for several applications simultaneously as well as on-demand application launch when users want more detailed information.

Program Model and New Technologies See Support From Venture Community

Microsoft is receiving positive reactions from venture capitalists worldwide on the technologies and the licensing approach.

“We’re encouraged that Microsoft is making its large IP portfolio available to launch new companies and strengthen existing startups here in Europe,” said Nick Kingsbury, global sector head of software at 3i plc. “With its large IP portfolio, Microsoft is uniquely positioned to accelerate the growth of many new categories of software.”

“With its strong focus on R&D, Microsoft has always offered a good deal of technical innovation,” said Bill Wiberg, partner at Advanced Technology Ventures. “We’re excited by the potential of Microsoft’s vision for creating new technology companies.”

“Technology startups are driven by great entrepreneurs providing new ideas and innovation to the industry,” said Sam Jadallah, general partner at MDV-Mohr, Davidow Ventures. “This pace can be accelerated by Microsoft’s launch of its IP Ventures group, providing technology building blocks and making it possible for startups to innovate on Microsoft’s IP.”

“OVP is excited to partner with Microsoft IP Ventures and get early access to the large portfolio of technology assets. In addition to the innovative technologies, we like the way Microsoft has structured the program to partner with entrepreneurs,” said Lucinda Stewart, partner at OVP Venture Partners. “Our success in building early-stage companies in the Pacific Northwest, Microsoft’s backyard, makes us an ideal partner for this venture.”

“We’re impressed by the breadth of technologies that IP Ventures has already made available,” said Scott Maxwell, managing director at Insight Venture Partners. “Emerging growth companies and entrepreneurs in our network are excited about these technologies. We value the opportunity to be part of this program and are looking forward to working with Microsoft on more technologies in the future.”

Demand Leads to Program

In April, Microsoft announced that Pacific Northwest-based technology company Inrix Inc. received an exclusive license for a predictive, real-time traffic technology from Microsoft Research that enables Inrix to provide relevant, up-to-the-minute traffic information. An early example of how this program and model will work, Inrix built its business around the technology to enable the delivery of the next generation of traffic information services. The company plans to distribute real-time predictive traffic information nationwide to a broad range of service providers, device manufacturers, Web sites and mobile solution providers. “Obtaining technology from Microsoft gave us a distinct advantage in our growth strategy,” said Bryan Mistele, founder and CEO of Inrix. “Microsoft’s innovative applications and tools in the field of traffic prediction are providing us with a significant competitive advantage by dramatically reducing the time it will take for us to deliver our real-time, nationwide, predictive traffic solutions.”

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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Editors’ Note, July 14, 2005
– This press release has been updated to more accurately reflect technology names.