Microsoft IP Ventures opens up hundreds of internally developed technologies to entrepreneurs and new businesses by licensing and spinning out Microsoft's innovations to facilitate new product and business development.
"Our research labs and efforts across the company have created a large portfolio of innovative technologies that extend the reach of personal computing today, with much of it going into Microsoft® products," said Rick Rashid, senior vice president of Microsoft Research. "At any given time, there are hundreds of projects under way at Microsoft. IP Ventures provides yet another vehicle for extending this reach and delivering innovations to customers in a variety of areas." (http://www.microsoftipventures.com)
So, Microsoft gives something away for sure. Let us consider some of the reasons:
- Its R&D (700+ people worldwide) has become too big for Microsoft to capitalize on its IP by itself;
- Need for additional direct revenue (it is estimated IBM gets $1B a year from licensing out IP);
- In addition to its developer tools, Microsoft's IP could become yet another powerful way to ensure the growth of the ecosystem centered on Microsoft technologies;
- Potential for long term returns from the equity small companies trade for the Microsoft IP.
What can go wrong? It is hard to say. Let us only mention that open source, IBM, and SUN, have been giving away IP for some time now. Thus, the impact of the reason #3 above may be diminished. As well, tying one's future to the odds of success of fledgling companies is a risky endeavor that requires specialized assets and resources. Thus, the impact of the reason #4 above is uncertain--especially for the accounting types. Also, given Microsoft behavior, ungentle at times, toward smaller companies that seemed to take away some of its revenue, companies will need re-assurance that everybody in the ecosystem is going to earn something and be able to keep it.
All in all, this cannot be a bad time for the Microsoft centered companies. The customers are likely to get more innovative technologies, the partner-companies are likely to get access to the Microsoft smarts and channels, and Microsoft itself will get the rest.