For years people have been predicting that an explosion was on the horizon in speech technology that would light up the sky. ‘Is this the year of speech?’ has been the most commonly asked question in our industry over the past decade. However, while we’ve all been waiting for the "big bang," a string of firecrackers has been going off all around us and not just the fireworks display sponsored by Intel at Conversations, ScanSoft’s Annual Speech Conference. It was a fitting symbol of what we believe lies ahead for speech in 2004.

History teaches us that there are very few overnight sensations. The emergence of speech technology as a mainstream business strategy has come gradually, as most things do. Instead of the one big "eureka" moment some people predicted, there has been a series of many successes resulting from years of research and development, marketing and good old-fashioned salesmanship on the part of a lot of people who have believed in the potential and opportunity of speech for a long time.

Now there are indications of real interest and increased spending for speech technology products and services. Gartner reports that the worldwide market for speech recognition products is on a pace to reach $130 million this year, increasing slightly over 2002. "The figures show that buyers are once again beginning to show interest in a technology that many believe will ultimately transform the way people interact with computers," wrote Matthew Broersma (ZDNet) in October.

According to Dan Miller of Zelos Group in a report titled, "Hosted Speech: Applying the Distributed Model to Managed Services," Outsourced, automated speech applications is a high-growth but stealthy business that is carving out a growing percentage of the $1 billion automated teleservices industry. Speaking recently at Conversations, ScanSoft CEO Paul Ricci explained the rationale behind ScanSoft’s merger with SpeechWorks, and in doing so, summarized his perspective on the status of the industry. "After years of high growth expectations in the speech market, Stuart (Patterson) and I concluded that 2003 was the year that those expectations would begin to be realized. We were convinced by large, successful deployments across our entire business, including United, Aetna, and Amtrak in network solutions; Ford Jaquar, and Sony in the embedded market; and the Department of Justice and Jacobi Medical Center in dictation. By the end of this decade, speech will become a prolific interface between humans and systems to automate business processes. It won’t be the only interface, but it will be a ubiquitous interface. It will no longer be a surprise, it will be a customer expectation."

At the same conference ScanSoft president Stuart Patterson said that the economy is in a far better spot than last year as evidenced by consumer spending, corporate profits, stock prices and some job growth. The speech market, he said, has moved from adolescence to maturity; from ‘not-sure-I-want-to-be-grown-up’ to a young adult. It should be noted that Nuance and ScanSoft both reported strong third quarter revenues.

We saw a tremendous illustration of the sense of purpose and enthusiasm within the industry at SpeechTEK 2003. Registration and attendance once again set new records. The pre-conference workshops and tutorials were well attended and the Speech Solutions CHALLENGE proved to be a huge hit. Our thanks are extended to Ken Rehor, Bryan Mekuchuk and Jim Larson for their work to make the Speech Solutions CHALLENGE a success. Congratulations and thanks to the seven teams who participated in the Challenge: TuVox, Edify, Intervoice, VoiceObjects, Velocity/Newfound Communications/ScanSoft, Angel.com/Comverse/Voice Partners and Convergys/Audium. The People’s Choice Award went to the team of Convergys/Audium using ScanSoft speech recognition software.

Finally, we appreciate the efforts of VocaLabs and Voice Architects for providing the testing; Intel and West for sponsoring the hosting facilities; Voice Genie for sponsoring the Calling Pavilion; and Brooktrout Technology for sponsoring Monday evening’s VOX Cool Demo Lounge where the solutions were first revealed. We will have an excellent opportunity to discuss first quarter developments in speech at the AVIOS/SpeechTEK Spring Conference and Exposition, March 24-27, 2004, at the Moscone Center West. The special 10-year anniversary of SpeechTEK is scheduled for September 13-16 in New York at the Marriott Marquis. We hope to see you at these events.

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