The tech giant’s partnership model shows how large companies can work with new ventures to drive innovation.

by CEIBS Associate Professor of International Business and Strategy, Shameen Prashantham and George S. Yip

At the Microsoft Accelerator in Beijing, engineers are developing new technologies that could transform industries as diverse as automobiles, mobile telephony, and e-commerce. They are doing so under Microsoft’s wing, housed within the company’s Asia-Pacific R&D facility. But they aren’t limited to using Microsoft products: One of the more striking features of the facility is the presence of Apple computers on the desks of some of the roughly dozen startups working there. Microsoft is providing a coworking space, technical and business mentoring, and connections to prospective customers, partners, and collaborators, in hopes that if a startup’s innovation comes to fruition, it will be a boon for both parties.

The Beijing Accelerator and others like it around the world represent the culmination of a strategy that Microsoft has pursued for about a decade. During this time, Microsoft has rolled out a series of ambitious partnerships with startups. The business case is clear: Engaging with startups enables a large corporation such as Microsoft to tap into exciting innovations just getting off the ground. And startups know that working with a company such as Microsoft will provide access to the resources, legitimacy, and scope they need to catapult them into greater visibility and help them obtain new business opportunities.

Read more in strategy+business magazine.

Illustration by Phil Hackett