Microsoft (NASDAQ:MSFT) has launched a new accelerator to encourage more start-ups to use its Windows Azure platform to build their cloud-based applications and services. It will function as a typical start-up incubator but instead of seed funding, Microsoft will provide free access to Windows Azure and other assistance. It will also be part of Microsoft’s BizSpark program, which offers Microsoft software to start-ups at low price points. 
Azure is a cloud computing platform for developers which enables them to build, host and easily scale web applications using Microsoft’s data centers. It competes primarily with Amazon (NASDAQ:AMZN) Web Services, which is the largest player in the cloud computing space, Google (NASDAQ:GOOG) App Engine, offerings like Heroku and Force.com by Salesforce.com (NYSE:CRM) and Rackspace. Microsoft recently also slashed its pricing for Azure, in a bid to increase its market share in the cloud computing market.
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Microsoft recently tried the same thing with Kinect, by launching a new accelerator for start-ups to boost the development of Kinect apps. By incentivizing start-ups and developers to use Azure for free, it hopes to attract and lock them in and up-sell higher priced offerings to them when they make it big, besides also improving its image in the start-up community.
Azure is part of the Servers and Tools business, which accounts for around 17% of Microsoft’s total value. Our $38 price estimate for Microsoft stands nearly 15% above its market price.Notes: