Microsoft announced Monday it is creating a new venture group to target startups in the cloud, security and machine-learning markets.
Corporate Vice President Nagraj Kashyap, who left Qualcomm to join Microsoft earlier this year, will head the new group, dubbed Microsoft Ventures.
Microsoft hopes the new effort will help the company break into disruptive technologies sooner.
According to Keshyap, the new group will fill a void between Microsoft Accelerator—which helps early stage companies with tools, technology and consulting—and Microsoft’s acquisitions of larger, more mature companies.
"Because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends," said Kashyap in a blog. "With a formalized venture fund, Microsoft now has a seat at the table."
Microsoft Ventures plans to have offices in San Francisco, Seattle, New York City and Tel Aviv, with the potential to expand into other areas going forward. To start, the group plans to focus on cloud related ventures.
"Given that the move to the cloud remains the single largest priority for the industry, identifying the bleeding-edge companies who complement and leverage the transition to the cloud is key to our investment thesis," said Kashyap.
Investing in emerging tech through VC funds appears to be of growing interest to old-guard tech companies. Earlier this month, Hewlett Packard Enterprise announced the Hewlett Packard Ventures program, which will target startups to help the company reinvigorate its offerings and compete with its rivals. HPE’s venture capital arm is reportedly targeting startups focused on Big Data, security and the cloud.
HP and Microsoft have both previously spent large sums of money buying tech companies in acquisitions that didn’t pan out. The new strategy may provide both companies a new path forward without having to make such hefty investments.