What Microsoft could learn from how start-ups work

A discussion with the folks at Microsoft got me explaining our technology choice on the cloud.  

It led to an idea on how Microsoft should be positioning their cloud offering, keeping the lifecycle of a startup product company in mind :-

1) Most companies start on the cloud, with just an idea


Face it : when starting out, all you would want to build is your product and test that it works for your consumers.  The cloud gives you the perfect platform to start with a 256KB machine for development, and to add nodes as you progress.

2) Most products are not OS specific


I cannot think of an application that "requires" Microsoft or Linux running in the background.  Sure, Postgres and mysql have friendlier interfaces when used on Windows, but PHP / Python / Perl run brilliantly on any platform.

See http://langpop.com/ for a dip-stick on popular languages used - nothing Microsoft-specific here.

3) Yet the Microsoft prices far outweigh the costs of Linux


Go to Amazon or Rackspace, and compare the cost of a Microsoft instance vs a CentOs instance.  There's at least a 20% difference between the two.


See Rackspace's pricing, one of the more inexpensive but brilliant cloud providers : http://www.rackspace.com/cloud/cloud_hosting_products/servers/pricing/

Given (1) [I'm just starting with an idea] and (2) [am not married to Microsoft], my cheaper decision is only on costs, so I would go for Linux.

4) Features, not platform, is top-of-mind


You've invested man-months of coding, you've launched a Minimum Viable Product. As your customers start snapping up your application, you receive a plethora of ideas & change requests from your teams.  At this point of time, any product manager is going to want to focus on building functionality rather than thinking about the platform they are on.

 
5) Only when there's scale, manageability comes to mind

You've launched your product, you have a product roadmap, and you start wishing you could manage your servers with easy-to-use management and monitoring tools.  This is perhaps where the beauty of the Microsoft OS comes into play.
Even today, I'm thinking of how MS SqlServer can help with the dynamic reporting we want, and how restarting a service is just a Remote Desktop plus right-click-restart away.


By this point of time, your product is a complicated system with many parts.  There are integrations that have been done between multiple open source products, that you woud rather not touch.  Everything is working fine, so why change the underlying infrastructure?  If there's better management you want, along comes a management layer that works on top of your underlying Linux cloud infrastructure, at a price -> it's less traumatic to just license that layer than migrate to a different technology stack for management tools.

Which is the point to make ; unless Microsoft is content with the needs of their legacy customers, it needs to understand how start-ups typically think and grow, and use that sequence to its’ advantage when pricing it’s services.

Instead of charging start-ups for the Microsoft-advantage upfront, grab developers' interest early on with competitive pricing, and shift the rates to regular tiers as the business has proven itself and the value-add of Microsoft software becomes more in demand.

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Tags: Microsoft, cloud, pricing, product, startup

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Comment by Kaushal Bhavsar on June 13, 2012 at 3:15pm

Isn't it a dream of every company to create a better "alternative" of some already existing thing? 
Azure is tightly integrated with Visual Studio and .NET Developers will choose PaaS like Azure since they don't want to manage virtual servers. 

Comment by Mahesh Khambadkone on June 13, 2012 at 12:26pm

I think Microsoft did understand what startups want.  And they went ahead and did this on windowsazure.com. 

Their goal is to be an alternative to Amazon, and not to be a offering within their services.

Comment by Kaushal Bhavsar on May 26, 2012 at 5:43pm

We are working on Anatag, it's a hybrid app which will is a platform for digital marketing using QR Codes. Our analytic engine is on Amazon whereas everything else is on Azure.

We are actually paying for Amazon because it is quite affordable. Plus it has Route53 which serves the purpose. Would love if it would be free, though, until we get rolling.

Comment by Mahesh Khambadkone on May 26, 2012 at 5:27pm

Totally appreciate your point about Bizspark - we are on it too. 

However, I started the thread pointing out everything starts with an idea - you have a photo-sharing app idea?  You have a community service product?  Want to build a semantic search engine?

Go to Amazon or Rackspace or GoGrid with this idea, just to prototype things and try this out with your team and friends. You simply will not choose Microsoft only because it's priced higher.

Comment by Kaushal Bhavsar on May 26, 2012 at 5:21pm

Well, it's your product so you make the decisions. But as far as cutting down startup costs is concerned, Bizspark does that. However, as I said, it is your call. We speak C# and not Php so we waited until our idea got approved, which was some 5-7 days time frame altogether. I believe Microsoft cares for startups.

Oh... we use Linux, too, and we thank Amazon for the free tier ;)

Comment by Mahesh Khambadkone on May 26, 2012 at 5:09pm

Bizspark has too many conditions.  

I've got a product idea called 2frontteeth.  Just tried setting up a server with Bizspark on AWS.  I need to fill in multiple forms and wait for approval.  Or just choose a Linux server and I've got started with coding.

Comment by Kaushal Bhavsar on May 26, 2012 at 4:14pm

FYI, Microsoft supports startups in its Bizspark program, they give all software and cloud platform free for three complete years.

p.s. We were in the same loop, but now we don't have to fight licensing until we start scaling (and earning). We are using Azure and they don't charge a rupee, not to forget SQL Server Web Edition and other software.

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