Convergys Acquires Intervoice

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Convergys, a provider of customer care and billing services, announced July 16 that it will acquire voice systems provider Intervoice for $335 million. The deal was targeted to officially close by the end of August.

Mike Betzer, senior vice president of relationship technology management at Convergys, says the choice to buy Intervoice rather than to forge a partnership with it was all about long-term commitment and stability. "Customers want to be able to buy products from strategic partners and suppliers they can count on for years and years," he says. "Partnerships could get dicey. We believe there is a tremendous amount more synergy by owning the assets.

"By integrating Intervoice’s complementary speech automation, Web self-care, and mobile applications, Convergys will be able to offer a comprehensive array of automated and live agent services," he continues. "Intervoice’s products and services portfolio provides [Convergys] with an expanded offering, reduced time to market, and enhanced differentiation in the large and growing automated services [industry]."

Convergys also receives from Intervoice all 5,000 customers and approximately 700 employees. Betzer says that only "a couple of dozen" Intervoice customers overlap with his company, and that the commonality is largely in name, not technology offerings. Convergys doesn’t plan to reduce Intervoice’s current staff, he says: "This acquisition is about growth, not about consolidation. We need [Intervoice employees] to keep doing their jobs, as they do them very well." Betzer adds that Convergys has every intention to maintain Intervoice’s current product portfolio and planned to have a definitive product road map by the deal’s official close.

According to information disclosed during a conference call July 16 with representatives from both Convergys and Intervoice, talks between the two parties originated a year ago. Robert Ritchey, CEO of Intervoice, revealed on the call that his company had also been in talks with other vendors about a possible deal. Ritchey was due to retire from Intervoice at the end of August, and the company had already named Jim Milton, its president and chief operating officer, as his replacement.

According to several industry analysts, the deal offers each vendor great potential to complement the other’s offerings. "The acquisition addresses some of the challenges we saw for Intervoice, predominantly around scalability," says Gartner research director Steve Cramoysan. "For Convergys, there are some key scales and capabilities which I think they will need going forward, and Intervoice brings some of those to them," he adds, citing the area of voice self-service, in particular.

The devil, however, is in the execution of the deal, Cramoysan says. That’s a sentiment echoed by Daniel Hong, lead analyst at Datamonitor. "It won’t be easy," Hong says. "Convergys says it’s a solutions company, but it still has to overcome the mindset of being a services [vendor] acquiring a product company. It will have to keep an open mind when integrating Intervoice."

Convergys is taking great care to ensure that the integration is as smooth as possible, Betzer explains, noting that teams from both companies are being specifically devoted to the process.

Only time will tell if Betzer’s hopes will pan out. "If you look at Convergys’ history in their effort to grow and expand services, they have an understanding of how to align and manage people as part of their own service and part of the organization," concludes Matthew Goldman, a Gartner research vice president. "How quickly [Convergys] addresses these challenges [in the next few quarters] will be quite telling." —Christopher Musico, destinationCRM.com

Other M&As

After a slowdown earlier this year in merger and acquisition activity in the speech technology field, three other acquisitions took place in July.

Unified communications solutions vendor Aspect Software on July 9 acquired BlueNote Networks for an undisclosed amount.
The acquisition brings to Aspect the ability to extend Session Initiation Protocol (SIP)-based voice, video, and other real-time interactive communication services to enterprise users as an integral part of a services-oriented architecture (SOA).
Michael Regan, a co-founder and vice president of engineering at BlueNote Networks, will join Aspect as vice president of unified IP development.

On July 1, OnMobile, a telecommunications value-added services provider based in India, acquired speech recognition company telisma for an undisclosed amount.
The addition of telisma’s standards-compliant speech recognition products will enable OnMobile to accelerate its penetration into fast-growing emerging markets by developing new speech recognition language models.
Telisma, which was created in August 2000 as a spin-off from France Telecom’s Research and Development Laboratory, is based in Paris and has operations in Europe and India. Telisma’s core products center around language processing software. The company’s automatic speech recognition (ASR) software, teliSpeech Recognizer, is a scalable, carrier-grade ASR solution that comes with an Eclipse-based toolkit called teliSpeech.

Sangoma Technologies, a provider of PC-based hardware and software for networking and telephony solutions, acquired Paraxip Technologies, a developer of IP connectivity software, for $4.8 million.
The integration of Paraxip’s SIP-based NetBorder suite into Sangoma’s product line will provide Sangoma with a growth path that includes the unified communications market, IP contact centers, commercial interactive voice response solutions, and other SIP-based telephony markets. The combined products and channels of the two companies considerably extend Sangoma’s current market range by providing support for all software-based telephony applications.

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