Datamonitor Report Predicts The Global Voice Business Market Will Grow to 3.1 Billion in 2008

A new report just published by independent market analyst Datamonitor predicts that the global voice business market will grow from a value of $656 million in 2002 to $3.1 billion in 2008, representing a compound annual growth rate (CAGR) of 30 percent.

Enabling software will account for the biggest portion of the voice business pie over the next two years. Nevertheless, Datamonitor expects the value and therefore revenue mix to shift up the value chain through 2008, focusing more on the applications and services segments, and less on the platforms and enabling software segments, which are trending towards commoditization.

While The Americas and Europe will represent the largest geographic markets for voice business, Asia Pacific is set to grow at a CAGR of 41 percent between 2002-2008, almost doubling as a proportion of the global market in terms of revenue. Datamonitor says China is well poised to become the fourth largest market after the US, UK and Germany.

According to Datamonitor, the applications segment will become the biggest portion of the voice business pie by 2008, representing 32 percent of total revenues. This segment will attract growing interest from players currently focused on other aspects of speech solutions, and many of them, such as ScanSoft, Intervoice, and Syntellect, are already trying to further expand their reach into the applications space.

While the customized applications subsegment will continue to grow at a healthy rate, Datamonitor expects a surge in the "packaged" applications subsegment. Voice business services will be one of the fastest growing value chain segments through 2008, with a CAGR (2002-2008) of 35 percent. Large system integrators (SIs) still remain largely under the radar, but have begun to ramp up their investment in speech expertise. Large SIs are inherently well positioned to accelerate growth of the voice business market overall, due to their strong brand, existing relationships with large enterprises, and experience with large-scale multi-channel projects. Smaller SIs and consulting companies will also experience growth, and the most successful will be those that focus on niche verticals or solutions.

The development of standards has created a new market opportunity, as it is changing the way enterprises think about self-service solutions. This has placed pressure on traditional Interactive Voice Response (IVR) vendors to rethink the viability of the proprietary technologies business model. The move to standards will allow partners and customers to increasingly be able to choose best-of-breed speech technologies without fear of costly integration or loss of advanced functionality. While Datamonitor expects the transition to standards to continue, the present change in emphasis is aspirational.

Although the demise of proprietary languages is an eventuality, deployments in the market are still far from being standards-dominated. Moreover, Datamonitor expects traditional IVR vendors to introduce standards-based platforms going forward. Datamonitor expects large systems integrators and technology vendors like Microsoft, IBM, and HP to increase their prominence in the voice business market over the next two years. This will cause a change in the voice business community, in both competitive structure and prominence of the voice business industry in general.

"Vendors must watch for downward pricing pressure, diversify their revenue streams, and determine their partnership strategy with these large players," says Katherine Lam, voice business analyst and author of the report.

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