Earlier this year, Google bought Nest for $3.2 billion. With its new accelerator program dedicated to home automation, Microsoft hopes to build the next Nest--and make it part of the family.
Microsoft announced the Microsoft Ventures Accelerator on Tuesday, which will be hosted at its Redmond, Wash. campus. Microsoft's partner in the venture is American Family Insurance, the nation's third largest mutual property insurance company, which will offer those companies selected for the four-month program an optional $25,000 equity investment.
Like a number of other Silicon Valley companies, Microsoft maintains an investment arm and related ventures program to nurture a farm team of sorts, talent that will hopefully enrich its own programs once the startup gets off the ground. Microsoft does not require an equity stake in the startup, said Rahul Sood, a general manager and partner at Microsoft Ventures, at the company's Global Startup Day in San Francisco.
"We believe this creates the next generation of long-term companies for Microsoft to partner with," Sood said at the event.
The accelerator provides "mentorship, workspace and an immersive experience," Microsoft said.
While its rivals are beginning to make noise about wearables and connecting the so-called Internet of Things (IoT), Microsoft has remained relatively quiet. At its recent Build conference, Microsoft began laying the foundation for future offerings, however, announcing that Windows would be essentially free for devices with displays of less than 8 inches, and that embedded devices would be connected to its Azure cloud services.
"You have to ask yourself: What kind of devices are possible when a PC runs on something the size of an eraser?" Microsoft operating system head Terry Myerson asked at the event, holding Intel's maker-focused Galileo computer.
With the accelerator, Microsoft is trading mentorship for an ears-to-the-ground approach to business intelligence, asking the creators of the next-gen IoT technologies to guide Microsoft's ship. Even if nothing pans out in terms of an acquisition, Microsoft will itself become better connected.