As an interface of choice, speech is being felt—and heard—in nearly every market segment, most notably in mobile phones and cars. Months of research have been poured into the following pages, as we honor the winners, leaders, and Vendor Contenders in six categories. In a nutshell: Acquisitions have winnowed the speech engine field, with the big blow coming when Nuance acquired IBM’s speech portfolio, removing Big Blue as a player. A tough economy has squeezed sales of speech self-service, but signs point to a bullish future. Soaring growth marks speech analytics, as companies scramble for actionable results. Demand for voice security has this sector poised to expand, while the ubiquity of smartphones spells huge potential for mobile voice search. And outsourcing is fueling professional services. One thing’s for sure: In a hotly contested market, any company that made our leaderboard has earned its spot.
SPEECH ENGINE
The Market
Consolidations and acquisitions have dramatically winnowed the speech engine field. Most significant was Nuance’s acquisition of IBM’s speech portfolio in 2009, which effectively removed IBM from the market. This year, the relationship between the two has grown, as Nuance markets IBM’s Watson—a powerful natural language artificial intelligence technology you may have seen on Jeopardy—in the medical field. The alliance has made Nuance, already a big company, a force to be reckoned with in speech engines and speech technology.
This year, perhaps because consolidation has come with higher pricing, cost has had a big impact on the engine category. Notably absent is Microsoft’s Tellme engine, which won last year. Judges this year felt that Microsoft had not done enough innovating. Moreover, many voiced complaints that its customer service left much to be desired. While Microsoft received high scores in cost (tied only with Novauris) and decent scores in accuracy, neither was enough to put it on the leaderboard.
The Leaders
Storied AT&T has been involved in speech technology since the company was but an aspirational gleam in the eyes of starry-eyed computer scientists. Since then, AT&T has been committed to research and development, which is a big reason the company is among the leaders this year. AT&T boasted a high innovation score, a great ability to customize and implement, and very decent recognition scores.
As for cost, our analysts and consultants were all over the map, giving a mix of high and middling scores. The reason may be the company’s failure to price its recognizer. “It’s free to developers,” says Bill Scholz, a consultant and the president of New Speech. “But they haven’t figured out yet how to price it to people who are deploying it. It’s as though it’s free, though it’s clearly not AT&T’s intent to give it away.” Because of this ambiguity, Scholz says, some are wary of using it for fear of getting slapped with a hefty price tag down the road.
Also on the leaderboard was Nuance Communications. It’s more or less unanimous: Nuance has one of the highest-quality recognition engines on the market. As in years past, Nuance returned perfect scores from every analyst and consultant in our panel this year—an impressive feat. It also did well in customer satisfaction with a solid 4/5 average. In fact, it did very well in most categories. Where its score suffered was cost.
“They’re ridiculously overpriced,” one consultant says. “A few companies…have backed off from using them because they’re too damned expensive—even though they’re good.”
The Winner
Loquendo reclaims the top prize for the third time in this category. Our consultants and analysts gave the company high marks in customization options, accuracy, and customer satisfaction. Particularly strong is Loquendo’s text-to-speech (TTS) engine, which Scholz describes as “the absolute tops.” He and many of our judges were particularly impressed by the recent addition of vocal effect—conveying emotions through vocal inflections—which is relatively new to TTS technology.
Improvements like that one have earned Loquendo a reputation as forward-thinking. Loquendo also has been pushing harder into the automated speech recognition (ASR) marketplace with its engine. This year’s refresh of Loquendo ASR, version 7.9, now includes Arabic, bringing the number of supported languages and dialects to 28. Loquendo also launched a Romanian TTS voice this year, bringing its stable voice fonts to 30.
“Loquendo is becoming more aggressive,” one analyst says. “It’s more of a competitor to Nuance, and Nuance really owns the market.”
Vendor Contender
Our Vendor Contender this year is LumenVox, which claims to be “the most affordable” in the industry. Though such boasts may be dubious—every vendor self-describes as “the leading provider”—LumenVox is, at the very least, one of the most inexpensive ones out there. With “lite” one-port packages beginning at $195, it’s hard to argue on price. Overall, LumenVox sported solid scores across the board—mostly fours with a slight dip in recognition. Where it really shined, of course, was in cost.
—Eric Barkin
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SPEECH SELF-SERVICE SUITE
The Market
Though the struggling economy has squeezed sales of IVR systems, slowing growth the past two years, that’s starting to change. The world market for IVR is expected to regain some strength in the medium to long term, as frozen funds thaw. In fact, DMG Consulting expects the market to reach $2.3 billion by the end of the year and maintain modest single-digit growth through 2012.
Global Industry Analysts (GIA) predicts growth will be especially strong in financial services, where many companies are dealing with restructurings, mergers, and acquisitions after the recession. GIA expects growth will not be driven by large enterprises, which it says have reached the saturation point with IVR technologies. While many larger firms might be looking to replace first-generation systems with newer ones, the real new business generator will be small and midsize firms. Also steering that change will be a focus on benchmarking customer experiences; the use of more sophisticated voice portals; advanced speech, touchtone, and multimodal interfaces; and a push toward IVR optimization that will lead to system upgrades.
The bottom line, analysts say, is that the sluggish economy has not changed the fact that IVRs still offer cost efficiencies and superior customer experiences. And with the momentum shift away from proprietary hardware and software to open-source platforms, making those changes will be easier than ever.
The Leaders
Alcatel-Lucent’s Genesys Telecommunications Laboratories division this year again was named an industry leader, a distinction it has held since 2009. In fact, Sheila McGee-Smith, president and principal at McGee-Smith Analytics, calls Genesys’ approach to self-service “best in class.”
Of particular interest was the launch of the Conversation Manager, a key component of its Intelligent Customer Front Door (iCFD) and Genesys 8 platform. Conversation Manager, which soon will be available as a stand-alone offering, helps to create a unified view of customer interactions across multiple channels, including contact centers, the Web, mobile phones, and social media. It also didn’t hurt that the company finished in the top four in depth of functionality and customer satisfaction and was first in the ability to integrate category with a 4.5.
SpeechCycle this year reprises its role as an industry leader, a title it has not held since 2008. It scored an industry-leading 4.25 in the variety of delivery methods area and will take that further with the advancement of its efforts in self-service via the smartphone. In March, the company launched a division dedicated to mobile customer care solutions and introduced its first application, SmartCare Mobile, two weeks later. SpeechCycle also is a pioneer in multimodal inputs, with its T3 (touch, type, talk) interface and natural language understanding.
The Winner
Voxeo, nearly two points ahead of its nearest rival, was propelled by an industry-leading 4.8 in the variety of delivery methods and a 4.9 in the ability to customize solutions. The company continues to reap the rewards of its VoiceObjects acquisition in 2008. Voxeo also is pushing unified self-service and the use of VoiceXML to build an application that works via voice, Web, text messaging, email, and video. “Voxeo has a very standards-compliant focus,” says Deborah Dahl, principal at speech and language consulting firm Conversational Technologies and chair of the World Wide Web Consortium’s Multimodal Interaction Working Group. Voxeo also “gives companies an interesting new choice for self-service that’s not tied to or burdened by a full contact center suite,” McGee-Smith adds.
Vendor Contender
West Interactive made the leaderboard in 2007 and has been absent since then. The company, which acquired Holly Connects and TuVox in mid-2010, scored an industry-leading 4.6 in depth of functionality and collected high marks in all of the other criteria except cost, where it posted a 3.3. Nonetheless, that West made two key acquisitions in IVR alone shows the company is committed to the speech self-service market and its customers. The company, which also acquired Twenty First Century Communications, a provider of automated alerts and notification solutions, and Smoothstone IP Communications during the past year, shows that it is expanding its business.
—Leonard Klie
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SPEECH ANALYTICS
The Market
Having reached full maturity with, in some cases, almost immediate return on investment results, speech analytics has enjoyed explosive growth. Ovum predicts that the market will be worth $180 million by 2014—which would double the value in 2009. The expansion is being fueled by what is a full-blown analytics revolution in customer relationship management. Analytics technology has finally reached a point where it is consistently producing high-quality, actionable results, and companies are rushing in to make use of it. Growth was also spurred in part by the recession that began in 2008, when an increasing number of companies began looking to analytics suites to drive real-time decision making, hoping to get the most efficient results from every customer.
The Leaders
Nice Systems managed to fight its way out of the Vendor Contender category and into one of the top spots this year. Indeed, the company posted a strong showing across the board, with high grades in depth of functionality, customer satisfaction, and accuracy. Nice’s only stumble occurred in ease of installation.
Nevertheless, Nice might see some additional growth. This year, the company spent approximately $60 million to purchase CyberTech International—a compliance recording solutions vendor. With that acquisition, Nice expects to deepen its penetration into the financial sector as well as enhance the company’s position in medical compliance applications.
Just barely beaten by this year’s winner was Verint, which earned very good scores. The company saw the best depth of functionality numbers among our leaders, the best accuracy score of all vendors, and very strong numbers in ease of installation and use.
However, its price tag held Verint back from winning overall; Verint’s cost scores were the lowest of any of the vendors in the running this year. To put that into perspective, Verint’s score was only half a point lower than the winner, Nexidia. You get what you pay for, the company would undoubtedly argue.
Verint has been busy this year refreshing its offerings with a new release of Audiolog in April and a new version of its Voice of the Customer Analytics suite in May. We’ll have to wait until next year to see whether those introductions will be enough to allow Verint to overtake the long-reigning champion.
The Winner
This year’s winner will surprise no one. For the fifth consecutive year, Nexidia has taken the top award in speech analytics, squeaking past its rivals by fractions of a point. Nexidia’s success was due largely to a very strong showing in accuracy and cost. In fact, our panel of analysts and consultants gave Nexidia top marks in cost among the leaders, along with the highest customer satisfaction scores. The results suggest that Nexidia’s top ranking overall may have a lot to do with the value it offers for the money.
The company has doubtlessly been helped this year by the $23 million equity infusion that Nexidia received at the end of last year. Among the new investors was BlueCross/BlueShield, which is a client of Nexidia. In 2011, Nexidia also expanded its reach into Hollywood and television with the launch of PhraseFind, an application packaged with Avid Media Composer for finding key phrases among the sometimes thousands of hours of footage taken for a single project of documentary or reality programming.
Likewise, Nexidia has thrust itself into jurisprudence with a pair of partnerships that brings the company’s tools more firmly into the world of litigation audio discovery.
Vendor Contender
Competition for Vendor Contender was fierce this year, as vendors duked it out over tenths of a point. When the dust had settled, Autonomy etalk’s superior depth of functionality and customer satisfaction carried the day. Autonomy also sported some fairly decent cost scores, second only to Nexidia among the leaders.
—Eric Barkin
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VOICE SECURITY
The Market
Growing demand for voice biometrics in general and voice-based identification in particular signals the emergence of a market segment that is expected to hit a sudden and rapid growth spurt in the very near future, according to many industry observers.
Roughly 6.5 million people around the world now have their voiceprints stored by commercial organizations for voice authentication, Opus Research estimates. Nuance Communications expects that number to reach 20 million in about two years. Among the top industries using such data are telecommunications, financial services, healthcare, and government, with “modest successes” in some other areas, according to Dan Miller, research director at Opus.
“The market is poised to grow dramatically,” Miller says, pointing out that one of the main drivers in voice security applications is mobile phones. As people are able to do more and more with their telephones, the need to authenticate themselves before carrying out transactions will grow, Miller predicts.
In addition, look for voice biometrics to be included as part of a trend toward multifactor authentication schemes and e-signature verification, he says.
The Leaders
Speech Technology Center has been on a roll since it announced a year ago that the world’s first nationwide automatic voice identification system based on its proprietary biometric platform will help Mexican law enforcement agencies collect, manage, and search a database of hundreds of thousands of stored voiceprints. STC already is negotiating similar systems deployments in Latin America, Asia, and Europe. Beyond that, the company also garnered top spots in cost and customer satisfaction, where it collected scores of 4.0.
VoiceVault, a company focused exclusively on the science and technology of voice biometrics, was a winner in 2008, but then dropped off the leaderboard for a few years, Now it’s back, having finished particularly well in company expertise and ease of use, where it scored 4.3 and 4.0, respectively.
The company has taken the lead in voice security applications for the smartphone market, which many industry analysts have identified as the next frontier for voice security, and is working with many other industry partners to pair voice biometrics as part of a larger multimodal identity verification solution. The company also boasts simple and quick enrollment processes, the ability to draw accurate results from short utterances, and technology that is both text- and language-independent.
The Winner
When Nuance Communications acquired PerSay, the former knew it was getting a leader in voice security; PerSay was the clear winner in the category in 2010 and 2009. The acquisition, which Nuance pulled off in late December, has positioned the company far atop the leader board in the voice security space.
Nuance also gained text-independent authentication and authentication on iPhones. As a result, Nuance’s customer base expanded to include some of the largest known customer-facing authentication applications in the world, including Bell Canada and Vodafone Turkey. However, the true benefit Nuance gains from the acquisition is a new level of expertise, exemplified by its perfect 5.0 score in that area. Nuance also finished far ahead of the competition in its accuracy score, 4.4.
Vendor Contender
TradeHarbor first expanded the reach of voice-based authentication using a software-as-a-service (SaaS) model in 1999, and those efforts are finally paying off. Now a leading provider of voice authentication as a Web service, the company’s customers are apparently pretty pleased, as TradeHarbor scored a 4.0 in customer satisfaction.
The company hopes to expand its customer base with the recent addition of a Quick Start program for cable and entertainment content providers; the program includes free integration support and free use of the Voice Signature Service, indicative of its confidence that users will see a significant return on investment from the service. TradeHarbor also scored high in ease of use and company expertise with marks of 4.0.
—Leonard Klie
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PROFESSIONAL SERVICES
The Market
The downturn has had a muted affect on the professional services market because these offerings have, by and large, provided companies with cost-reduction benefits that have helped them weather the storm. In fact, the recession has forced organizations to make cutting costs a top priority, which has more companies looking to hosted solutions to help accomplish that goal.
Analysys Mason and many other analyst firms expect the strongest growth to come from the hosted/managed services subsegment, where spending is expected to eclipse premises-based solutions by 2012. In fact, hosted/managed services have seen double-digit growth since 2008 while revenues from on-premises solutions have followed an inverse downward course. Growth is also expected in systems integration, outsourced operations, product-related services, design consulting, and custom development.
“In the short term, spending will be driven by transformation initiatives in developed markets and by outsourced operations in emerging markets,” says Glen Ragoonanan, senior analyst at Analysys Mason. “In the long term, new technologies, services, and business models will drive spending in developed markets, while transformation projects become increasingly common in emerging markets.”
Ragoonanan also expects stiffer competition to help drive down prices, which would make these types of services more attractive and easier to justify in a business case.
The Leaders
Angel, which recently dropped the dot-com from its name, outpaced competitors in customer satisfaction with a 4.7. The company’s low prices led the pack, earning it a 4.0 cost score. At the same time, Angel maintains a solid reputation for providing “affordable, basic applications that don’t require complex professional services engagements,” says Deborah Dahl, principal at speech and language consulting firm Conversational Technologies.
West Interactive, a leader in 2007, 2008, and 2009, failed to make the leaderboard in 2010 but is back and stronger than ever in 2011. It finished with a 4.5 in both the number and breadth of services offered and its ability to execute. Named Frost & Sullivan’s 2010 Company of the Year in Contact Center Outsourcing, the vendor “continues to distinguish itself by the sheer depth of its services,” says Michael DeSalles, strategic analyst at Frost & Sullivan. “No other single player can offer a comprehensive mix of services across all areas: voice self-service, speech solutions, automated notifications, conferencing and collaboration, emergency communications, agent-assisted voice support, and advanced hosted contact center technology.”
Now that West has a presence in social media monitoring and engagement, look for it to bring those elements into its portfolio as well. The company’s offerings will undoubtedly expand even further as it moves forward with its recent acquisition of Smoothstone IP Communications, a provider of software-driven applications that exist in the cloud and are delivered through a software-as-a-service model.
The Winner
SpeechCycle, the winner in 2007 and a leader in 2009, takes the top spot again this year among professional services providers. With scores of 4.5 in the number and breadth of services offered, ability to execute, and customer satisfaction, its Customer Experience Transformation Services team reinforces its reputation for providing the consulting, design and development tools, and support that companies need to extend legacy systems and implement new and robust ones. “Its focus is on complex applications,” Dahl says.
Vendor Contender
Convergys, the winner in 2009 and a leader in 2007, falls back to Vendor Contender this year after a rough patch that saw it struggle with integration issues stemming from a 2008 acquisition of Intervoice, according to some analysts. The company finished with a very respectable 4.3 in depth and breadth of functionality and its ability to execute. The company’s professional services group, which consists of more than 200 customer experience optimization experts, even offers a written performance guarantee with penalties paid out if they fail to meet specified goals.
—Leonard Klie
MOBILE VOICE SEARCH
The Market
Once vaunted as an untapped field of bounty, mobile voice search is unclaimed territory no more. According to a Comscore report released this year, 72.5 million Americans owned smartphones in the first quarter of 2011—up by 15 percent from the end of last year. That’s nearly one-third of the entire mobile phone market. And the trend promises to continue, with enormous implications for speech-enabled search.
“Smartphones have a lot of computing power and great visual displays, but they are terrible input devices,” says Bill Scholz, speech technology consultant and president of New Speech. “It’s extremely difficult to use on-screen keyboards or those tiny keyboards where the keys are as big as your pinky fingernail…it’s created a great opportunity for speech input.”
Platform vendors realized that early on and developed speech capabilities in-house or acquired firms that had them. The native on-phone products have gotten so good that they will likely dominate usage, making things difficult for third-party vendors.
The two obvious leaders in the platform race are Google and Apple, both of which have managed to crowd out Microsoft and its Tellme offering. Microsoft’s erosion in the space is particularly interesting, because it has remained a dark (albeit very rich) horse to watch among analysts. The reason was put succinctly by Juan Gilbert, professor and chair of the Human-Centered Computing Division at Clemson University: “[Historically] Microsoft tends to come in late and then dominate.”
Whether the software behemoth can do that again is a source of some skepticism for Gilbert, though. “In mobile devices, they pretty much snoozed and got boxed out. They’re trying to come back, but I don’t see it happening.”
The Leaders
Rising from Vendor Contender last year to a leader in this category is Apple. Last year, the company made a splash in the speech industry when it bought Siri for $200 million. Many saw that as a strong move, and its fruits are represented in this year’s standings. Apple’s mobile speech product is available only on the iPhone, but that makes up as much as one-quarter of the entire U.S. smartphone market, according to Comscore.
That proportion may grow now that Apple’s exclusivity deal with AT&T has expired and the iPhone 4 is available on Verizon, the largest cellphone carrier in the United States.
Also a leader this year is Vlingo, a perennial third-party darling among speech technologists. In previous years, the company had been narrowly edged by Google. This year, Vlingo was outstripped by yards. It scored well overall, but its numbers were more akin to Apple’s than to Google’s. The biggest challenge for Vlingo going forward will be to stay relevant. To have any kind of pull as a third-party product, Vlingo must entice users to forgo their native on-phone search and go through the trouble of downloading it. The company will need a mighty compelling offering for that. Of course, who knows…Vlingo could always get acquired.
The Winner
This category resembles 1990s Olympic basketball with Google playing the U.S. Dream Team. The company’s mobile voice offering trounced rivals for the third year in a row; the scores weren’t even competitive, largely thanks to Android. In the past few months, the platform has taken market share from Research In Motion (RIM).
According to two 2011 reports from Comscore, Canada’s RIM controlled 33 percent of the smartphone market as recently as November but lost about six percentage points by March. Google, conversely, rose from 26 percent to 34.7 percent during that time. To put that in context, Apple, the next biggest rival, saw only a modest gain of half a percent. Both Microsoft and Palm saw their shares decline.
Significantly, Google Voice comes native on the Android platform—which means that when more than a third of smartphone users reach for voice-enabled features, the easiest button to push will be Google’s. It also helps that Google’s mobile voice search is the best out there, having earned top marks across the board with our analysts and consultants.
Vendor Contender
AT&T is our runner-up this year with its solid accuracy and speed scores. However, the company faces increasing relevancy challenges in mobile voice search—a field that continues to be dominated by Google and Apple.
—Eric Barkin