Breeding Success: How Microsoft’s Emerging Business Team Lends a Hand as New Technology Companies Seek Growth

REDMOND, Wash., March 29, 2004 —It doesn’t vote people off an island, cover their bodies with bugs, or drop them into a hot tub with attractive singles. But Microsoft’s reality television-like show, “The ISV Show,” which debuted on the Microsoft Web site earlier this month, is likely to become as much a hit in its own way as the reality programs currently dominating U.S. television. “The ISV Show” is destined for success with the thousands of emerging technology companies that want to understand Microsoft’s product roadmap and how they can develop highly profitable products that take advantage of it.

“The ISV Show” is Microsoft’s latest effort to enable innovation among new technology companies offering products for the Windows platform. The effort is driven by Microsoft’s Emerging Business Team (EBT).

To understand the work of the EBT and its relationship with emerging technology companies, PressPass spoke withDan’l Lewin, Microsoft corporate vice president for .NET Business Development, and with executives from three new-technology companies:

Sergey Blyashov, chief technology officer at Carlsbad, Calif.-based Enviance, developer of the first Internet-based system for improving compliance with environmental health and safety regulations

Danl Lewin, Microsoft Corporate Vice President, .NET Business Development.

Vance Bjorn, chief technology officer at Redwood City, Calif.-based DigitalPersona, a pioneering provider of fingerprint authentication solutions for mainstream computing environments, and

Matthew Moore, vice president, marketing at Bothell, Wash.-based Dexterra, a leading enterprise mobility solution company

PressPass: What is Microsoft doing to help emerging technology companies — and why?

Lewin:Let me answer the second question first. Our mission is to foster an ecosystem of successful software companies that offer exciting, highly innovative solutions that take advantage of the Windows platform.

To accomplish this, we see the EBT as sharing some of the key characteristics of a venture-capital firm. While we don’t fund companies in the way that VCs do, we do seek out new technology companies every day. As they receive venture funding, we contact them to see what they’re doing and what we can do to help them succeed. We talk to hundreds of companies each year and work closely with up to 100 companies at any one time, making introductions for them with the various product groups at Microsoft, helping them to navigate through our organization, facilitating their use of Microsoft platform technology, and encouraging joint marketing opportunities. It’s a comprehensive technology-and-business approach that creates strategic relationships with these cutting-edge companies.

PressPass: Tell us about “The ISV Show.”

Lewin: “The ISV Show” focuses on a subject of intense interest to emerging companies — what will Microsoft be doing in the future and what opportunities does that create for them — and disseminates that information as broadly as the Internet makes possible. Our premier episode focuses on collaboration technologies. Future episodes will focus on mobility, smart clients, messaging, and more.

PressPass: Can you offer other examples of the kind of outreach you’re doing?

We’ve created a directory — called “Innovation Starts Here” — that highlights the work of 25 successful emerging companies, including the three companies represented in our discussion here today. We’re distributing it broadly both in print and online. We will have 100 companies from around the globe profiled by the end of this year. It’s one example of how we’re helping to raise visibility for these companies and create new opportunities for them. (See Related Links, right.)

Vance Bjorn, Chief Technology Officer, DigitalPersona, Inc.

PressPass: Let me address a question to our emerging-company executives: You’re all betting the future of your companies on Microsoft and the Windows platform. Why Windows?

Blyashov:At Enviance, we created our solution for the Windows platform in 2000. We embraced the Microsoft .NET Framework while it was still in beta and offered our .NET-connected solution just one month after Microsoft released version 1.0. Certainly Java was an alternative, but we rejected it in favor of Windows because of the unmatched richness of the Windows Server System, particularly when you consider the .NET Framework and the Visual Studio .NET development environment. Or consider the price and performance advantages of Microsoft SQL Server over UNIX/Oracle. Like most technology companies, we’re very cost sensitive, and time-to-market is everything. Microsoft met our goals in these key areas.

Bjorn:That’s true for us, too, at DigitalPersona. Windows Server System gives us the enterprise services we need as the foundation for our solution. Linux would have required us to create those services from scratch, to reinvent the wheel, driving up the time and cost of development — while giving us access to the barest fraction of the market we can access via Windows. Windows was the key to the desktop and, via Windows Server, to the backend as well.

PressPass: Dan’l Lewin mentioned Microsoft’s interest in creating strategic relationships with your companies. Is that how you see it, too?

Moore:Absolutely. The EBT has been very helpful about who we should talk to at Microsoft and about which programs we should be involved in. As a small company, we have limited resources that we have to use as effectively as possible. This guidance enables us to be as effective as we need to be in our relationship with Microsoft.

As a result, we were in the Early Adopter Program for the Microsoft .NET Compact Framework — a crucial technology for our enterprise mobility solution. Our engineers worked with the .NET Compact Framework team, the SQL CE team, and the Visual Studio team. On the marketing side, we’re members of the Microsoft Mobility Partner Advisory Council and we’re listed in a variety of Microsoft catalogs: Windows Server 2003, Gold Certified Partner, .NET Certified, and so on.

Blyashov:At Enviance, we’re also seeing our relationship with Microsoft functioning across several channels. We get on the shortlist for the Early Adopter Programs that are important to bringing new solutions to market as quickly as possible. We met with investors at a Microsoft-sponsored meeting in Los Angeles last year. We’re featured in a Microsoft-sponsored trade book supplement appearing in January.

Sergey Blyashov, Chief Technology Officer, Enviance, Inc.

Recently, we participated in a Microsoft .NET-sponsored seminar in Houston for the oil and gas industry — a target market for us. Two of the presenters there — a Fortune 50 oil and gas company, and an Alaskan energy company — talked about using our .NET-connected enterprise application for health and safety compliance. All of these activities give us increased visibility with customers, investors, and others who contribute to our success.

PressPass: What’s the bottom-line impact on your companies of these relationships with Microsoft?

Bjorn: The benefits of working with Microsoft have cut our time to market by up to 12 months. That gives DigitalPersona tremendous competitive advantage. And because our sales for new product ramp up significantly in the second year, we get to those higher sales much faster. Because we’re built on a great platform, because we get to market more quickly, and because Microsoft gives us tremendous credibility and visibility, our Microsoft relationship is responsible for at least 20 percent — and maybe 40 percent — of revenues.

I’ll give you just one example. We participated with Microsoft at the Catalyst show, an industry show for identity management, security and directory services; our product was Microsoft’s premium gift. We scored a 20,000-unit deployment based on that participation alone.

Moore:At Dexterra, we shaved six months and millions of dollars off the development of our solution, thanks to the relationship with Microsoft. And we’ve seen significant revenue growth.

But Microsoft has made a vital difference to us in another area, as well: Giving us a community or ecosystem of companies to work with. There’s so much we need for a successful enterprise mobility application, beyond the platform. We need a network connection, system integration, compelling devices, and so on. Companies we work with — such as CAP Gemini, Intermec, AT & T Wireless — are companies we’ve connected with through Microsoft. Having the relationship with Microsoft gives us the connections and introductions to these companies, and the credibility to build relationships with them.

PressPass: It sounds like Microsoft’s effort with emerging-technology businesses is paying off.

Lewin:Knowing that we’re supporting companies that bring continuing innovation to the marketplace is very rewarding. Our goal is ultimately to empower these innovative companies with the tools, technologies and resources to move their businesses to the next level in a sustaining manner. It is gratifying to be able to help enable so many smart companies and to help them get to places that, in turn, help them make the lives of all of our customers better.

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