Microsoft Innovation Center
Case Study
International Strategy Fall 2009
Vaclav Bastyr
Marianne Due
Alexander Kosovsky
Arthuro Medellin
Lucie Zadrazilova
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Microsoft Innovation Center Case Study
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Introduction
Michal Hrabi returned to his office after a session at the University of Technology, during which he
had introduced the students to the upcoming Imagine Cup, Microsoft’s IT innovation competition for
students. The students had shown little interest in the contest, and going through the session he did
not really feel as if he had come across students. ‘How come they did not see this opportunity to
take their ideas to the next step, receive professional feedback and possibly even win the prize,
which included experience, reputation and cool cash? What else could I do to persuade them to
participate?’
Mr. Hrabi has been responsible for the Microsoft Innovation Center in Brno (MIC) for 8 months. The
Centre consists only of him and a part-time Microsoft employee, however, a close cooperation and
shared facilities with the South Moravian Innovation Centre (JIC) made him part of a larger
organisation. The integration of the activities of JIC and MIC had been successful, however Mr Hrabi
was unsatisfied with one aspect of the integration between the JIC and the MIC: while the JIC was a
well-known organisation among start-ups in the region, the recently established MIC remained a
rather unknown part of the centre. Its services, products and events, such as Imagine Cup, were not
promoted properly. BizSpark, a key product of the MICs, which had attracted a large number of
companies in countries such as Brazil, Russia, and others, had trouble to attract a few as 50 start-ups
in the Czech Republic.
Mr. Hrabi knew that he could use the marketing department of the JIC to promote MIC. However, he
seriously doubted that JIC marketing would take any action to promote MIC unless he gave specific
orders regarding what should be done. How action should he take?
History of MICs
The first Microsoft Innovation Center was established in Brazil in 2003 as a voluntary activity of the
local Microsoft branch without any prior arrangement or permission from the Microsoft Corporation
in the US. The original objectives of the centre were to help start-up companies (mainly from the IT
sector) with their business development. Subsequently, other innovation centres were also
established by local Microsoft branches without any formal centralized structure, which made every
centre different from all others. Since 2003, a number of innovation centres were established by
local Microsoft branches all over the world (mainly in developing regions), however the lack of any
formal structure made all centres slightly different from each other.
At the moment, there are 110 MICs in 48 countries, offering a wide range of products and services to
the IT sector companies in local communities, aiming to “foster innovation and grow sustainable
local software economies.”
What is in it for Microsoft?
Microsoft Corporation gains from MICs because the centres support an innovative IT ecosystem that
potentially creates future Microsoft partners. The business model of Microsoft is based on partner
cooperation, often with SMEs, and a large part of the companies’ income is generated through such
partnerships. Moreover, the cheap access to Microsoft software for start-ups is limited to the three-
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year incubation time. If the start-up decides to use or develop the software in its business, it will
have to pay license fees when incubation time is over.
South Moravian Innovation Centre (JIC) and Microsoft Innovation
Center in Brno (MIC)
The South Moravian Innovation Centre (JIC) is a business incubator that was established in Brno in
2003 by the South Moravian Region, the Statutory City of Brno, and the four local universities:
University of Technology, Masaryk University, Mendel University of Agriculture and Forestry in Brno
and the Veterinary and Pharmaceutical Sciences in Brno. It is the oldest technology centre of its kind
in the Czech Republic (but still one of the youngest technology parks in Europe). The JIC aims to
create a supportive infrastructure for innovative entrepreneurship of all kinds in the South-Moravian
region and support innovative start-up ideas in Central Europe. Nowadays, the centre focuses on
innovative companies, students and research organisations and offers them finance, consultancy
services, networking opportunities, useful contacts and facilities (JIC 2009).
The Czech Microsoft Innovation Center was established in Brno somewhat by coincidence. In 2007,
the IT engineer responsible for the South-Moravian Innovation Centre (JIC)* went to Microsoft’s
sales office in Prague to ask for cheap Microsoft licenses to the start-ups in JIC’s incubation
programme. At that time Microsoft Prague had just failed to negotiate an agreement about the
establishment of an innovation centre with the agencies (like the JIC) and universities in Prague.
There was no incubation programme in Prague at the time, and when Microsoft Prague became
aware of the well-established South Moravian Innovation Centre, they immediately saw the
opportunity to establish the innovation centre in Brno.
The new Microsoft Innovation Center in Brno was officially opened in February 2008 as a joint
project of Microsoft and South Moravian Innovation Centre (JIC), focusing primarily on the
development of IT skills and on support of IT companies, providing them with cheap access to
Microsoft software packages as well as other services and products (for more information about
products, see section Products below). Contrary to the JIC, MIC does not provide any financial
support.
During the first year of the existence of MIC Brno, 9 companies participated in its programme. Since
its establishment, MIC Brno has already organized 40 educational seminars on various topics related
to IT technologies and business world for approx. 1200 IT experts, developers and students
(Microsoft Press Release).
MIC in Brno employs just two people. Michal Hrabi, the Head of MIC Brno, is responsible for the
planning and strategy of the centre and is in charge of communication with Microsoft Prague as well
as the Microsoft Corporation in the US. Mr Hrabi explains that the Microsoft sales office in Prague
has a little to do with the MIC on the day-to-day basis. The centre is financed mainly by the JIC, also
cooperating with the technology park on some of their projects and using the JIC marketing and
finance departments, whereas Microsoft contributes by providing access to Microsoft
products/software and guest speakers for seminars and workshops within its network. Mr Hrabi also
receives some materials and other support from the Microsoft Prague office.
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MIC in Brno is a part of Microsoft Innovation Centers Network that connects all MICs all around the
world. In 2009, an Advisory Board consisting of ten MICs was established, and the MIC Brno
happened to become one of them. The Board has recently agreed upon a common formal structure
and objectives for establishing new MICs around the world.
The Environment
Though not a capital city, Brno represented a wonderful choice for the establishment of the MIC.
With a population of over 400,000, it is the second largest city in the Czech Republic and a home to 4
major technology-oriented universities, three of which produce over 1000 IT students every year
(which is more than in Prague). A high number of IT students has attracted a large number of IT
companies to the city. The Technology Park in which the MIC is located, hosts companies such as
Siemens, FEI, SGI, Vodafone, Honeywell Controls or Symbol Technologies (Technology Park 2009).
IBM alone has around 2500 IT professionals in their centre in Brno, and the combination of a large
amount of IT-students and a good infrastructure for IT companies keeps attracting and generating
even more IT companies in Brno. Moreover, Brno has been ranked as number 60 in the chart of
European innovative regions based on the innovation index1
, and it has ambition to move forward
within this ranking. The city’s strategic location between Prague, Bratislava and Vienna further
increased its importance as a technology and innovation hub.
Products and services
Microsoft Innovation Center provides a wide range of products and services designed to promote
the development of companies in the region. These products are offered free of charge thanks to
the close cooperation between the University of Technology in Brno, Microsoft and the Czech
government. The products and services are listed below:
Seminars
Microsoft Innovation Center organizes approximately 12 seminars per month, facilitating access to
knowledge for the local companies. The lectures are usually delivered by IT experts from Microsoft.
These lectures usually take place in the University of Technology in Brno and cover the current issues
and most recent technological developments in software industry. All companies taking part in the
seminars can benefit from the knowledge and insights to the industry as well as the access to a
range of Microsoft products.
BizSpark
Microsoft provides a free access to a broad range of software for all start-up companies for the
entire duration of the incubation program (three years). This allows the companies to have access to
the essential PC tools and software equipment at the stage when most of them would not be able to
afford this equipment. At the end of the three-years incubation program, the companies have to
start paying for the use of the software. Using this strategy, Microsoft helps new companies to
1
Innovation index consists of fifteen different factors, e.i. number of people working in hi-tech industry,
number of patents in the region.
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develop when they are in their most vulnerable stage, but at the same time it increases its future
user base.
Microsoft Library
Microsoft Innovation Center also provides access to the MIC Library. Companies get the possibility of
borrowing specialized trade and professional publications (primarily those published by Microsoft
Press). They also get access to a broad variety of titles available online.
WebsiteSpark
The MIC also provides a number of development tools and solutions for the creators of WebPages
and other online applications. In addition to those, the users receive professional support and
training by Microsoft. This not only provides the developers with quick and easy access to new
versions of Microsoft software but also an opportunity to test all new products for free.
IT Lab
All companies located in the JIC incubator and all members of the MIC also get access to specialized
software designed to test scenarios.
Promotion and Cooperation
Members of the MIC also get an opportunity to promote their company and their products through
the MIC Promotion Centre, which provides access to printed media and conferences. This exposure
can increase the companies’ brand awareness and gives them a possibility of commercial
cooperation with other developed companies. Many start-ups also benefit from sharing their
research and development activities with other innovative companies MIC Network.
Target groups of MIC products
The target groups of MIC vary according to product, but includes following (MIC 2009):
 Researchers
 Developers
 Software architects
 Small and medium-based businesses
 Innovative start-up companies
 Students
 All those who wish to develop their knowledge in the field of ICT
For some of the products, certain requirements must be met to receive the products. Companies
that wish to join the BizSpark, for instance, are required to have revenues lower than US$ 500,000
per year and less than three years in the market. Basically, all Czech start-ups can live up to these
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requirements. The sole requirement for joining Websitespark is that the company must have more
than ten employees.
Before the MIC became part of the JIC, start-ups would often be using open source software
because they did not have money for the Microsoft software.
Students Incubated
companies
Start-up Company
(non-incubated)
Other
BizSpark X X
Imagine Cup X
IT Laboratory X X
MIC library X X X
MS Business Academy X X
Promotion and Cooperation X X
Lectures and seminars X X X X
WebsiteSpark X X X
Imagine Cup
Imagine Cup is the largest global technology competition for high school and university students,
currently running the 8th
year of the contest. Students can compete in any of the five categories
(Software Design, Mobile Development, Game Design, Digital Media and IT Challenge) with a
common topic like “Imagine a world where technologies can solve today’s major problems”. The
competition spans a year, beginning with local, regional and online contests whose winners go on to
attend the Worldwide Finals held in a different location every year to compete for the prizes
totalling 110 000 USD. The competition gives the students an opportunity to get practical
experience, improve their presentation skills and compete with the best of their peers from all over
the world, but also to use their projects for their course works or a university thesis.
Though the competition is very popular in countries like Romania, Russia or Brazil, very few Czech
students apply for the competition each year. MIC tries to attract students by promoting the event
at the partner universities (which currently include CVUT Prague, VSB-TU Ostrava, ZCU Plzen and
University in Hradec Kralove; VUT in Brno is currently being approved as another partner university)
and encourages them to apply, offering students support with their projects and, in the case their
idea is successful in the competition, offering assistance with starting a company in the JIC incubator
in Brno. However, Czech students are still very reluctant to apply.
Mr Hrabi believes this happens because students are afraid to their lose time working on a project
they might not win and go for the safe option of getting a job and secure their “winnings” instead,
not taking into consideration that by participating they might learn something new. They only
consider money and the certainty of winning.
All this puts Mr. Hrabi in a difficult position – how can he communicate all the benefits participation
in the Imagine Cup brings to students and how can he persuade them to take part in it?
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MIC Awareness
Another problem, slowing down the development of the MIC Brno, is a very low awareness of the
MIC between students and local businessmen. Moreover, there is no special budget for the
marketing activities of the MIC. Although the marketing department of JIC promotes the activities of
the JIC constantly, they usually focus on particular projects, e.g. incubators, and they do not even
seem to know how to promote MIC. As a result, all marketing activities had to be approved and
financed by the Prague office however marketing expenses were cut to around 25% of last year’s
level after the crisis. Mr. Hrabi promotes the activities of the centre himself by conducting talks at
partner universities and making presentation about MIC and its activities. He also looks for students
interested in MIC projects however he feels this promotion is insufficient. He feels the centre has to
use new promotion channels (newsletters do not work!) to attract two new perspective groups –
university students and alumni who do not want to work in research laboratories, and having ideas
of their own, or writing software applications or games, look for employment or ways to set their
own ventures, and high school students, as those are usually very skilled young people who have
more time for participating in the Imagine Cup and who, though they are less likely to found their
own companies while still at high school, could gain a lot from participating.
Marketing
The main challenge for MIC marketing is to increase awareness of MIC services and to attract
students to come to MIC with their idea or project and to become a start-up company at MIC.
Secondary target is also to attract students to participate in competitions, for example Imagine Cup,
and finally, to inform them about seminars and other services offered by MIC.
Microsoft Innovation Center currently uses three main channels to market all programs and services
that are offered. The centre is primarily presented on a webpage run by Microsoft and containing
information about the whole product and service range of the MIC. It also contains information on
the upcoming events and competitions. The other source being currently used is a newsletter sent to
students and school offices via email. However, this measure did not prove itself as a very effective
one. The last channel being used by the Microsoft Innovation Center to communicate students the
services and events they offer is personal presentation of MIC at some of the student’s conferences
and events. Nevertheless, there is a problem. MIC does not have the resources to become more
present in this field.
The majority of all marketing material and campaigns are prepared by Mr. Hrabi. Moreover, MIC has
the possibility to obtain strong support (realization and financing) for preparation of posters and
other advertising materials concerning some event directly from the Microsoft Headquarters in
Prague. MIC, as a part of the JIC, also has the possibility to obtain marketing support from the JIC
marketing department. Unfortunately, this support is not really helping the MIC much as the
department is primarily focused on the JIC products and services, and is not very much interested in
MIC promotion. Therefore, preparation of some campaign is only possible under the precondition
that all information and exact idea is presented to the marketing department.
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Reluctance of students to work on own projects
The biggest issue that MIC currently faces is the reluctance of students to work on their own projects
and to compete with their projects with other students in the Czech Republic as well as all around
the world. Generally, the attitude of students studying technical universities is not very
entrepreneurial and is relatively passive towards any work which does not offer reliable return. It is
important to emphasize that by return, students mean nothing but financial profit – unfortunately
not other valuable items like experience or recognition. From the students` point of view, working
on projects with uncertain result is a loss of time leading to a situation that students rather go and
start working for a big IT company and get the sure financial revenue. Some of the students also
work on projects under the lead of their professors with the vision of gaining some reputation. The
reality is however, mostly the opposite as the students hardly get even their name on a back page of
the presented research or project. Many students also miss the self-confidence and do not think
their ideas are good enough to become successful.
The problem of getting students willing to work on own projects and to change their attitude
towards project work is a hard task which the MIC has to cope with every day. The challenge here is
to show the students that they are capable to work on a project and that the experience, they get by
doing so, might be worth more than just working at a company. Furthermore, project work and
participation in competitions give students a significant competitive advantage over other students
in the future, especially when applying for a job. Moreover, it is necessary to increase awareness of
all MIC support programs the student teams are eligible to get. It can be assumed that there are, in
reality, some very motivated students who would like to work on projects however, as they are not
aware of the existence of MIC and the support it is offering, they are reluctant to start to develop
their ideas and projects and turn them into a real company.
Conclusion:
After the presentation of all relevant information about the current status of MIC and about the
problems it faces, we would like to ask the following questions:
 Based the current marketing strategy, instruments and the limited resources available,
please prepare a proposal on how to increase the awareness of the MIC among the targeted
groups.
 How should MIC address the students in order to persuade them about the benefits of
working on a project?
 What should the communication towards students be like in order to get their attention and
attract them to compete with other student teams and maybe to start their own business
later on?
 How should MIC increase the number of students and start-ups entering the MIC and the JIC
incubation process?
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Bibliography
[1] (JIC 2009): South Moravian Innovation Centre Web-page: http://www.jic.cz/en/about-
us.html
[2] Interview
[3] (Case Study 2006): ‘Local software economy case study: Microsoft Innovation Centers’
download.microsoft.com/download/6/9/f/.../innovation_center.pdf
[4] (Technology Park 2009) Czech Technology Park: http://www.technologypark.cz/
[5] Microsoft Innovation Center Web-page: http://www.msic.cz/cz/
[6] Imagine Cup Web-page: http://www.imaginecup.com/
[7] (Microsoft Press release):
http://www.microsoft.com/cze/presspass/msg/20090701_news1.mspx
Microsoft Innovation Center Case Study, Fall 2009 Appendix 1
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BizSpark
Who can get the product?
 Novice (start-up) business.
What is the content of the product?
 A wide range of software from Microsoft as
a development license.
What does the product bring to you?
 Opportunity to try any software from
Microsoft without paying for them
separately.
 Quick and easy access to the latest versions
of Microsoft software.
How do I get the product / what is needed?
Applicants for entry into the program BizSpark must
meet the following conditions:
 The company is not older than 3 years.
 Annual turnover is not exceeding USD 500
000.
 The company is privately owned.
How much does it cost?
 The company pays a one-time fee of $ 100
at the completion of the three year period.
WebsiteSpark
Who can get the product?
 Creators of web pages and applications.
What is the content of the product?
 Development tools and solutions for WEB
(3 licenses MS Visual Studio 2008
Professional, 2 licenses MS Expression Web
3, 1 license MS Expression Studio 3)
 2 production licenses MS Windows Web
Server 2008 or R2 and two production
licenses Microsoft SQL Server 2008 Web
Edition.
 Premium Web administration tool from an
independent contractor (DotNetPanel)
 Professional support and training
interventions in the form of technical
support, access to community support,
unlimited access to controlled technical
discussions on MSDN and unlimited
support for non-technical issues.
What does the product bring to you?
 Chance to test Microsoft software without
paying for them separately
 Quick and easy access to new versions of
Microsoft software.
 Visibility to supply and help in contacting
potential customers around the world via
the Web marketplace, galleries and other
applications, portals.
 Opportunity to take advantage of special
offers from serverhosting WebsiteSpark
hosting partners.
How do I get the product / what is needed?
Applicants for entry into the program WebsiteSpark
must satisfy the sole condition:
 The company has more than 10 employees.
The company must after entering the program:
 Within 6 months after entry into
WebsiteSpark create and host at least one
new web page or application on Microsoft
technologies and report this to Microsoft.
 Report other new sites created during
membership WebsiteSpark.
 Sign up for the Partner Network Microsoft
Partner Network.
How much does it cost?
 The company pays by the completion of the
program a one-time fee of $ 100.
Microsoft Innovation Center Case Study, Fall 2009 Appendix 2
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MIC Library
Who can get the product?
 Companies located in the incubator JIC.
 Students and companies that are members
of the MIC.
What is the content of the product?
 Possibility of renting professional
publications primarily from Microsoft Press.
Catalog and book titles are available online.
What does the product bring to you?
 Expert knowledge of the publications
directly from specialists in the field.
How do I get the product / what is needed?
 Being registered at www.msic.cz
 Book loans in the system.
How much does it cost?
 The service is provided free of charge to
companies incubated at JIC and students
and businesses that are members of the
MIC.
Source: Webpage of MIC, Brno
http://www.msic.cz/cz/aktivity/mapa-sluzeb/
IT Lab
Who can get the product?
 Companies located in the incubator JIC.
 Students who are members of the MIC.
What is the content of the product?
 Lending hardware and software of
Microsoft Innovation Center, which is
designed to test scenarios of developed
software.
 Option of having to configure the software
before borrowing.
What does the product bring to you?
 Financial and time savings.
 Testing functionality software.
How do I get the product / what is needed?
 Turn to the MIC.
How much does it cost?
 The service is provided free of charge to
companies incubated at JIC and students
who are members of the MIC.
Promotion and cooperation
Who can get the product?
 Companies that are members of the MIC.
What is the content of the product?
 Visibility of the company and its products in
the promotion center. Especially in the
printed media and at conferences.
 Seeking opportunities for cooperation with
local companies, Microsoft Innovation
Center and MIC World (within the network
Network MIC) and co-operation with the
advanced firms in the relevant fields
(mainly IT).
What does the product bring to you?
 Company and product visibility, greater
awareness of your brand.
 The reputation of the brand with the
Microsoft Innovation Center.
 The possibility of commercial cooperation
with developed companies.
 Cooperation on research and development
with other innovative companies in the MIC
Network.
How do I get the product / what is needed?
 Turn to the MIC.
How much does it cost?
 The service is provided free of charge to
companies that are members of the MIC.

Microsoft Innovation Center Case Study, Fall 2009 Appendix 3
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Theme of Imagine Cup 2010
“The Imagine Cup inspires students to use their creativity to help change the world for the better by discovering new
ways to use technology to address some of the world’s toughest challenges. Some of the greatest innovations and
companies of tomorrow will be created by today’s students.”
- Steve Ballmer, Microsoft Chief Executive Officer on April 23, 2009
The Imagine Cup continues to encourage students around the globe to imagine a better world in which people are
empowered by technology. The United Nations has identified some of the hardest challenges in the world today in
its Millennium Development Goals — ranging from reducing poverty and halting the spread of HIV/AIDS to providing
universal primary education. The Imagine Cup is calling on programmers, designers, and technologists to rise to this
challenge and use these Development Goals as their inspiration.
Microsoft Innovation Center Case Study, Fall 2009 Appendix 3
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Competition Categories
Software Design
Does the idea of creating an application that can be used by real people around the world challenge you? Consider
entering the Software Design competition and show the world what you can do. This is for the best programmers,
thinkers, and solution builders to go after the really tough problems. It’s a chance to start competing locally, show
off your skills and then hopefully advance to the global stage at the Worldwide Finals. You and up to three friends
form a team and apply your creative genius to creating a solution inspired by the 2010 Theme. Create innovative
software and service solutions that unleash the power of technology to benefit your area or … the entire planet.
Embedded Development
Embedded devices are becoming smarter, more powerful, and woven seamlessly in to our everyday lives. Get ready
to go beyond the PC desktop and work in both hardware and software to build an exciting solution using Windows
Embedded CE 6.0 R3 plus a provided embedded platform. Are you ready to push the envelope of where you can
apply embedded technology to improve the world around you?
Game Design
Game Design is where art and science come together. Through the Imagine Cup, you can learn and advance toward a
career as a game developer or entrepreneur. Use 3D or 2D, make it multi-level or single player but don’t forget one
crucial thing – you have to take on the 2010 Theme in your game. How about creating a game that is accessible for
users with disabilities or an educational experience for children to learn about the environment? Join up to three of
your friends and build a complex and full game experience, using Microsoft's XNA Game Studio 3.0, Visual Studio
and/or Silverlight.
Digital Media
Microsoft Innovation Center Case Study, Fall 2009 Appendix 3
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The world sees video everywhere. Our photos are online for our friends to view and every day we are checking out
the latest cool media files. Today, you get to be that someone. You and one friend team up to create a web video
submission. Use the internet to share your point of view, explain, and touch on issues in our global society that
relate to the 2010 Theme. Go big, go viral and get the world to stand up and take notice of what you have to
say. You’ll be judged not just on your incredible video content, but also on the number of votes you receive.
IT Challenge
Systems are behind everything technical thing we do: from a single computer to massive enterprise infrastructures.
The IT Challenge asks you to become a master at making those systems work. You will be tested on your knowledge,
faced with unique scenarios and diverse customer needs to solve at every twist and turn. If you make it to the end of
this competition, you’ll attend the Worldwide Finals and be announced as the best of the best in the industry.
Source: Imagine Cup webpage
 http://imaginecup.com/CompetitionsContent/MDG.aspx
 http://imaginecup.com/Competition/Overview.aspx