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Microsoft took flak last week for a corporate culture that one former executive claimed was killing good ideas and innovation.

There's no better place to debate this and the related subject of whether Microsoft is "relevant" than Silicon Valley. It's home to Apple and Google - two companies re-inventing personal computing and the web - and legions of developers working with open-source tools and technologies.

Historically, the Valley's home state of California has been the center of a number of open and free technology ideas such as BSD, from the University of California Berkeley, when it sat at the hear of the 1960's counter-culture. More recently, it's been home to the notion of giving away your code and sweating the business model later. These have run counter to Microsoft's centralized, closed, and commercial heritage of building software.

Speaking in the heart of this darkness at Microsoft's Global High-Tech Summit Wednesday was its corporate vice president of strategic and emerging business development Dan'l Lewin.

Lewin, a veteran of Silicon Valley who joined Microsoft in 2001, did not mention last week's news. But he did explain how Microsoft attempts to develop and tap new ideas and thinking. He said Microsoft's challenge is to build and add value to its platforms such as Windows, Office, and - increasingly - the Azure cloud in a flat and connected world as we begin to accelerate out of the economic recession.

Lewin, who worked at Apple and Steve Jobs' NeXT follow up, encapsulated this as not simply putting another word processor in Word, but building systems that help people understand and exploit the information they have.

"We are in this position where we have these big, broad platform assets... but how's that going to break through in a world were everything is connected and using the web and web standards," Lewin said.

"Innovation is overused as a word," Lewin told event attendees in Santa Clara, California. "We are at the juncture of where... it's time to be thinking about how to accelerate, and accelerate using technology as an enabler not an automater."

Lewin, whose role is to engage with new developers, said he believes in Hass Business School professor Henry Chesbrough's idea of "open innovation". In the context of Microsoft, that's where the company works with startsups and business and industry partners to bring ideas into the company and where it exports ideas and thinking.

The belief is that startups and thinkers will overtime place their bets on Microsoft's underlying Windows, Office, or Azure platforms.

Also, Microsoft might buy start ups whose technology is considered good or Microsoft might spin out ideas into companies, as it has done with stock-trading site Zignals and mobile media application Zumobi that were spun out of Microsoft Research in June 2008 and September 2006, respectively.

To further the goal, Microsoft has run a program called BizSpark since October 2008, which gives startups free access to Microsoft tools, technologies, and services. Lewin claimed that 30,000 companies are now on BizSpark up from 15,000 in June 2009. The program is open to private companies that are less than three-years old and have less than $1m revenue.

Among those using it is a seven-person company providing back-end and stock and business processing for Wal-Mart and one of France's largest retailers with 5,000 point-of-sale devices and 20,000 SKUs. The computing is done on Azure.

Also, Microsoft works with the research community.

"The research group at Microsoft has the mission to further the state of the art and ensure Microsoft has a future. We hire PHDs in the areas where they have their work and point of view, but we don't tell them what to do and they work with the academic community," Lewin said.

"That is a process of feeding this cycle of going back to the system from which the great ideas that have become the foundations of our industry are explored." ®

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