Launching startup accelerators: What’s in it for enterprises?

The time when startups had to think about servers, office spaces, and expensive equipment is becoming a thing of the past. Today, the cloud provides almost everything you could possibly need on a pay-per-use basis. The way things stand right now, anyone with an idea and a laptop can make use of the endless computing resources put at their fingertips by public cloud vendors like AWS and Azure. Powerful AI applications that would require a huge network of computers are now just a click away, and with regards to pure processing power, we are now in territory that the pioneers of the past probably never even thought possible.

A dream is really all a startup is before it becomes anything, and apart from cloud resources, major tech giants have launched their own startup accelerator programs to nurture and accelerate budding businesses that they feel have potential. The other things they probably look for are realistic goals and ambitions that are in line with the company’s own interests. Some people might look at this as spoon feeding, but in all honesty there has never been a better time for startups in the enterprise.

The perfect launch pad

launching startup accelerators

Imagine if every great inventor of the past had a lab full of state-of-the-art equipment at his or her fingertips. Sounds almost Utopian in concept, but that’s exactly the environment that the cloud has created. This startup-friendly atmosphere is being made specifically to encourage more people to come up with great ideas. This new ideology is pretty much the opposite of what the enterprise used to be like a decade or two ago, with tech giants trying desperately to hold on to their monopolies and thwart any newcomers. Today’s enterprises seem to be in stark contrast with those of the past, and taking startups under their wings seems to be the growing trend among top companies like Google, Oracle, Cisco, and Microsoft.

Building a foundation

You might wonder what tech giants are doing spending millions of dollars on startups, and the answer is “the devil you know is better than the devil you don’t.” The motive here can be one of two things: either it’s the larger company’s way of keeping a track of all upcoming and potentially business disrupting trends way in advance of them actually becoming a disruption. Or it could be a symbiotic relationship where the tech giant is helping a startup build a foundation that will ultimately pay off in the development of apps that complement their existing offerings.

Launching startup accelerators
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With regards to symbiotic relationships, Oracle has been pumping millions of dollars into its cloud-focused accelerator programs in India and Israel in the hopes of tipping the scales against market leaders AWS and Azure. It’s nice to see a company change tactics and think out of the box, especially since a head-on confrontation with AWS is probably a bad idea. With the cloud market expected to expand by over 300 percent in the next four years, investing in startups would be a great way to secure a larger share in this future market, and that’s exactly what Oracle plans to do. Oracle’s cloud startup accelerator provides each startup with a unique tailor-made program to fit their requirements, including structured mentoring, technology, work space, access to Oracle’s customer and partner network, access to investors, and free credits on Oracle Cloud.

The equity-free cloud

It’s tempting to think that this is all just a ploy by cloud providers to get more people to use their services. However, it isn’t as simple as that. Besides, accelerators don’t compel startups to use their services, although it definitely makes it worth their while to do so.

Microsoft Accelerator offers its startups credit worth $500,000 to use with its Azure platform, which is enough to cover most startups’ cloud computing requirements for over two years. Microsoft has accelerator programs in seven countries including India, China, Israel, the U.S., and the UK. Apart from support with marketing, finance, and technology, Microsoft also provides CEO coaching, team culture development, talent recruitment, and channel distribution. The all-expenses-paid course lasts four months, and even includes sessions where you have to get feedback from customers to develop confidence in your product and abilities. In India, Microsoft Accelerator has announced a joint initiative with TCS Co-Innovation network to go one step further from just connecting startups to potential customers but actually help them get a better understanding of the customer’s problems.

launchpad accelerators

Google’s Launchpad Accelerator is one program that offers select startups a chance to work closely with Google for six months, including a two-week all-expenses-paid session in Silicon Valley. The key benefits from Google’s program are that it is equity free, allows access to Google’s engineers, resources, and mentors along with marketing opportunities that only Google can provide. To be part of this exclusive program, Google is looking for teams that are addressing real problems with digital solutions. Apart from the $50,000 equity-free funding, each team will also receive equity-free support credits to avail themselves of Google services. The startups that have been selected by Google to be part of this program vary from word-based game developers to designer outfits rentals, apps that provide home tutoring to school children, and another startup that provides furniture on rent. These startups are down to earth in the sense that they provide services that people use in daily life, and that’s what Google possibly meant when it said it was looking for solutions that address real challenges.

Cisco announced its first batch of eight startups out of 200 that had applied to be part of their accelerator program. The preference in this case was given to startups involved with AI, the IOT, and analytics. Apart from unrestricted access to Cisco’s technologies and labs, each startup was also provided with personal mentoring and an equity-free grant for six months. Cisco’s motive here is to compensate for its weakness in terms of end-to-end solutions and encourage a healthy ecosystem of applications to complement their existing offerings.

Eyeing friends and potential rivals

In this new dynamic that the enterprise is witnessing between startups and large enterprises, a lot of the time it is hard to keep track of the large number of startups that could possibly be eating away at your business. By keeping your friends close and your potential rivals closer, large organizations are able to keep track of exactly what is happening in the space.

The current situation with regards to startups and especially large enterprises taking them under their wing is such that there isn’t a lot that can go wrong as long as you know what you’re doing. One thing to remember is that scaling up too quickly is the No. 1 reason that 50 percent of startups fail within the first five years. A downside could also be that accelerator programs, apart from restricting solutions to a specific customer base, could also influence startups heavily with their own ideas and programs and might cause them to lose their identity or original vision.

All things considered, there has never been a better time for startups in the enterprise. Though some programs are equity based, the majority isn’t, and with 0% equity and free training all around the world, there aren’t really a lot of reasons why you shouldn’t accelerate.

Photo credit: NASA

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