Microsoft Offers Azure Cloud Hosting Credits to Y Combinator Startups

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This article originally appeared at The WHIR

Microsoft is slashing costs for Y Combinator startups by giving away $500,000 worth of Azure cloud hosting. The new enterprises will also receive three years of Office 365, access to Microsoft developer staff, and one free year each of CloudFlare services andDataStax software.

The free services will be given out starting with the winter 2015 cohort. YC president Sam Altman said in a blog post that the total value will reach over $1 million per company.

“This is a big deal for many startups,” Altman said. “It’s common for hosting to be the second largest expense after salaries.”

Despite the obvious costs and risks associated with giving free hosting to startups, engaging with them is important for any hosting provider hoping to grow market share, and companies like Rackspace, SoftLayer, ViaWest, and ProfitBricks began targeting them directly years ago.

Rackspace gave away over $400,000 to UK startups in the first six months of its program there in 2013. In November IBM launched a program offering free cloud hosting to startups.

More recently Google Cloud Platform for Startups began offering $100,000 credits towards public cloud.

International markets are investing in software and technology startups too, with Deutsche Telekom launching a venture fund for German startups, and Daum Kakao launching a $90 million fund for South Korean companies late last year.

YC startups could eventually become significant hosting customers, so there is an aspect of direct investment in customer acquisition to Microsoft’s generosity. Microsoft also has partnerships with past YC companies Dropbox and Docker.

This article originally appeared at: http://www.thewhir.com/web-hosting-news/microsoft-offers-azure-cloud-hosting-credits-y-combinator-startups