Multinational firms change strategies to tap start-ups

Venkatesh Ganesh Bangalore | Updated on June 27, 2012 Published on June 27, 2012

Increasingly, multinational companies such as Microsoft, SAP and Qualcomm are looking at providing technology and go-to-market strategies instead of capital for start-ups.

IBM on Wednesday announced its global entrepreneur and SmartCamp initiatives, which are entrepreneurial programmes for start-ups.

Entrepreneur Programme

As a part of IBM’s Global Entrepreneur Programme, the world’s largest software company will bring together entrepreneurs, venture capitalists, academic leaders and experienced mentors to handhold start-ups. IBM is looking to invest in start-ups in sectors such as utilities, energy, healthcare and telecommunications using analytics, mobile technology and cloud computing.

In a similar initiative, Microsoft is eyeing start-ups in the areas of mobile computing, cloud, social media and big data technologies and instead of providing capital, Microsoft will provide start-ups access to its Windows Azure technology worth $60,000.

Enterprise software maker SAP in May launched its Private Equity (PE) Advisory Council that coordinates with various PE portfolio companies that have implemented SAP solutions.

Qualcomm Ventures, the investing arm of Qualcomm, to foster development of the mobile-related ecosystem in India is adopting a mixed strategy. Along with syncing companies with VCs and technology guidance, the company plans to invest $5 million in start-ups.

IBM, on its part, offers selected companies a three-month mentorship programme, opportunity to engage with investors and participate in global events.

Mr Karthik Padmanabhan, Country Manager - ISV and Developer Relations, IBM Software - India/ SA, said: “IBM is working with a new generation of entrepreneurs to tackle important global issues like water, transportation, healthcare and the environment.” VCs look at this handholding initiative as better way of generating returns. Mr Shekhar Kirani, Founder Member, Accel, said: “This helps in accelerating upgrades and enhancements in product lifecycles, an issue that software makers are constantly grappling with.”

Ecosystem benefits

Others agree and add that “MNCs with their technology and business expertise can help start-ups improve the overall tech ecosystem in India.” Ultimately, the whole ecosystem benefits from this as products and upgrades get introduced quickly in a fast changing tech environment, said Mr Amit Chatterjee, Managing Director, Microsoft India R&D.


Published on June 27, 2012
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