Microsoft uses freebies in battle with Amazon

SEATTLE - DefinedCrowd, a Seattle software start-up, had a choice to make when it was developing its first product last year - build on the cloud-computing foundation offered by the dominant Amazon or Microsoft's upstart competitor.

For founder Daniela Braga, the competing services seemed about even in terms of features. On price, Amazon's tools were a bit cheaper than Microsoft's. And more developers were comfortable working with Amazon Web Services, or AWS, the cloud-computing pioneer and now the market's largest player.

But Microsoft held the trump card: an offer of $500,000 in credits to spend on Microsoft's Azure cloud services over three years, a benefit DefinedCrowd had earned by participating in a Microsoft start-up program. That kind of sum can pay for the entire technology-infrastructure cost of getting a software company's first products off the ground.

'That was kind of hard to refuse,” said Aya Zook, business-development manager with DefinedCrowd, which makes tools to train software how to recognize speech or images.

The start-up would build its software on Microsoft's Azure.

Microsoft has staked its future on the cloud, the range of on-demand computing power and software services bundled into Azure and other products.

But Microsoft isn't banking on snazzy marketing or technical chops alone to make Azure a winner. The technology giant also is offering bargains and freebies, including discounts to large businesses, free trial offers to all comers and grants of cash for start-ups and not-for-profits that try the service.

The programs are part of a broader, companywide effort to gain market share. The bet is that discounts and free technical support today will make paying customers down the line, ideally bringing thousands of dollars a year to Azure and boosting awareness of Microsoft's offering in a highly competitive market.

It's an old tactic for a company that has long had plenty of cash to work with. Exactly where Microsoft has deployed that money to lure software developers offers a window into the company's shifting priorities over the years.

In the midst of its unsuccessful smartphone push a few years ago, Microsoft was shelling out a reported $100,000 - and up - to application makers who built tools for Windows Phone. Before that, Microsoft made similar deals to get developers and corporate partners interested in Bing, the fledgling search engine. And to a generation of technologists years ago, Microsoft offered ample support to get businesses to plug into the new Windows Server.

Those programs have yielded mixed results, said Michael Cherry, who worked at Microsoft in the late 1990s, and today tracks the company with analysis firm Directions on Microsoft.

Grants to use products don't tend to make a big difference on their own, he said.

'But when you can add feet on the ground to help a developer that had a problem? They'll be loyal to you forever,” he said.

For Microsoft, the cloud is the priority today.