In April I blogged that Nuance was on the acquisition trail again having acquired or in the process of acquiring their second company this year, after three in 2009, four in 2008, and seven in 2007. They have not disappointed. In June Nuance snapped up ShapeWriter – not a speech technology company that most people would think of, but instead related technology with predictive text. This week Nuance was at it again, but this time in the contact center space, with the acquisition of iTa out of Australia. This acquisition will help bolster Nuance’s contact center services offerings in the company’s Enterprise Services division. From my perspective, despite the economy, acquisitions seem actually up this year as a whole, in telecom, speech technologies, etc.

Today brought news that West Corportation had acquired TuVox, who I have thought of as an acquisition target for awhile now. This marriage is actually a pretty good one for West as they have long been a provider of outsourced self-service and contact center services, which is an area that is getting a ton of attention and competition right now from just about every enterprise contact center player in the market. There have been a number of players, such as Syntellect, Convergys (Intervoice), and Genesys who have been providing both enterprise and hosted solutions for years, and of course there are vendors, such as West who have been the big guys in the hosted space. But it seems that the legacy enterprise vendors, such as Cisco, Interactive Intelligence, Avaya, etc., are all getting into or have announced in the last year or so, hosted offerings of their own. This puts a lot of pressure on the legacy hosted providers to be more competitive. Tuvox, with its VoiceXML development tools will go a long way in enabling West to port their older applications over to VoiceXML. TuVox’s application development methodology should also help speed up the deployment of self-service applications, making West more nimble in a ever more competitive environment.

Although its summer and not the high season for big announcements, there are still some gems that have crossed my inbox this week. Here are some highlights:

OrderCatcher, a provider of speech-enabled voice portals for the hospitality and restaurant markets has developed a really compelling voice application development tool that essentially takes the developer out of the equation. I’ve seen a lot of IVR application development tools over the years that I’ve tracked this market, but this one even looks simple in a presentation, and normally they don’t. iSAT (Instant Speech Application Technology) can take a script and turn it into an application with blinding speed. For example, iSAT uses a grammar engine that parses all menu items in a quick-service restaurant menu and generates slot-based grammars, for all possible ways that a customer might order. The engine then generates semantic scripts from the items, and options or modifiers of those items. The OrderCatcher applications are state-based, allowing flexible control of the call flow and a natural sounding application. The application takes into account all of the options a caller will use, and then only prompts for any information it hasn’t received yet.

That is a simplistic description of the tool, but it is simple. The compelling part of iSAT, however, is that it is part of a hosted solution from OrderCatcher that looks to be really attractive for the SMB market, in that a company can give a script to OrderCatcher and within hours, OrderCatcher will have a working application up and running with no development costs to the business. The only fees are for the minutes used by callers. That equates to instant ROI. Interested in hearing more?

Next up was Interactive Intelligence’s announcement of a partnership with Buzzient to incorporate social media into the contact center. Interactive Intelligence is going to use Buzzient’s social media analysis and integration capabilities to monitor social media “chatter” according to customer-defined keywords, and then route the pertinent content as email messages to the person or agent best suited to handle the content, based on business rules and agent skill set.

Buzzient will monitor myriad social media interactions from the normal suspects, such as Facebook, Twitter, YouTube or LinkedIn, but also blogs, wikis and other sources too. The interactions can be tagged with quantitative sentiment scores for tone, such as negative or positive comments. The emails will be routed as part of Interactive’s multi-channel queuing and routing solution, based on the tone or other factors such as a vertical market focus, product name, competitors name, etc.

Finally, I just wanted to mention a developmental addendum to a product called ZoomSafer, which I blogged about on the UCStrategies site in March. A brief description, but you can see more here, is ZoomSafer is a patented solution that provides flexible policy management for the use of mobile devices while driving. It consists of a web application that allows a business or individual to customize their own set of safe driving policies, and track and administer them, a client application to download onto a users’ mobile device to enforce the policies, and a set of free voice services to allow users to text, call or email, hands-free while driving. It uses the customer’s GPS to automatically detect the customer’s speed and if they are driving or not.

After great customer feedback since the company launched the product, this next iteration provides further automation, and integration with Bluetooth technology to automatically determine when the customer is driving, but with zero incremental drain on the customer’s mobile phone battery. ZoomSafer claims that this is the world’s first safe driving software to integrate with in-vehicle Bluetooth technologies to automatically activate/deactivate “safe drive mode” on a user’s smartphone whenever they power on/off their in-vehicle Bluetooth device. In this release the Bluetooth Beta software works on Blackberry smartphones running 4.2.1 OS and higher. Later additions will include availability on Windows Mobile and Android phones as well.

One of the most interesting panels at the recent Mobile Voice Conference was one on patent law and its effects on industry innovation. It wasn’t even so much the hampering of innovation as the scope of damage that can be done out of greed, and the need to stop it. The panel on patent law, was made up of Marie Meteer, of MM Consulting, speaking on “Speech Technology Consortium – Building the Prior Art Library to Enable Better Patent Application Examinations”, Jason Peltz, an attorney with Bartlit, Beck Herman Palencher & Scott LLP, speaking on “Patent strategy: considerations in filing a patent infringement suit and in defending such a suit”, Mark Powell, the Director of the Technology Center 2600 of the US Patent and Trademark Office, speaking on “United States Patent & Trademark Office – How You Can Work With Us”, and Ria Farrell Schalnat, a patent attorney with Frost Brown Todd, speaking on “Speech Technology Consortium – Using Re-examinations Proactively to Clear the Threat of Patent Trolls”.

There is evil lurking out there in the form of patent trolls, which is threatening to stifle creativity and stall the speech technology industry, and others, one of which is unified communications. Ria Farrell Schalnat started her presentation on patent trolls with excerpts from Terry Pratchett’s 1992 work — Troll Bridge, which I found amusing enough to add here:

“It was a lonely bridge across a shallow, white, and treacherous river in a deep valley.A grey shape vaulted over the parapet and landed splay-footed in front of the horse. It waved a club. The troll blinked. It took this long to realize that the saddle was unoccupied. It blinked again, because it could suddenly feel a knife point resting on the back of its neck.

“Hello,” said a voice by its ear.

The troll swallowed. But very carefully.

“Look,” it said desperately, “it’s tradition, OK? A bridge like this, people ort to expect a troll . . . ‘Ere,” it added, as another thought crawled past, “‘ow come I never ‘eard you creepin’ up on me?”

“Because I’m good at it,” said the old man.

The troll risked a sideways glance.

“Bloody hell,” it whispered. “You think you’re Cohen the Barbarian, do you?”

“What do you think?” said Cohen the Barbarian. “

So just what is a patent troll? In a nutshell, it is a non-practicing individual or group/entity that buys up patents from willing sellers or struggling companies that then turns around uses to sue related companies for patent infringement. In other words, this is someone who has not practiced their patent, and is not contributing or innovating in the industry in any way. Instead, they accrue patents as an arsenal (with multiple claims in each patent), bundle them up, and then take companies to court. We saw this happen starting more than a decade ago, with Michael Katz taking on the voice processing industry (at the time, voice messaging and IVR), and now, extremely aggressively, with Phoenix Solutions, who have sued big companies such as Sony, PG&E, and Wells Fargo, for their use of speech technologies.

To set the stage, Jason Peltz explained that there are 200K patents that are issued annually, with 2700 patent suits filed annually. Currently, there are 4000 patent cases pending. The average case takes two years, with an average cost of between $4.5 to $5M to defend, with an average jury award of $6.5M. Something that was equally interesting is that 30-40% of patent cases are overturned on appeal, which is dramatically higher than any other form of litigation. Also, in the case of patent law, the higher courts at the federal level do not have to defer to the trial court’s interpretation of the claims in the subject patent, so if a company successfully defends their patent, and the “troll” decides to appeal, they may get a second bite at the apple, with all the associated costs escalating. Many small companies just fold, as it’s often less costly to pay license fees than legal fees. But it is not just small companies that fold. In a recent case filed in 2002 (US patent 5,799,273) Allvoice Computing, PLC vs. Nuance, Nuance won their first case, and then ended up settling rather than going through it again on a federal level. Why does this matter? Because even though Nuance won, when they settled in July of 2007 rather than pay, it gave the patent troll a big stick to use against smaller companies by being able to say that Nuance paid rather than fight — we can beat you too.

The panel discussed what could potentially be done about this, and Ria Farrell Schalnat talked about using re-examination as an alternative or supplement to litigation.

Depending on the type of re-exam conducted, costs may initially be anywhere between $5,000 – $50,000+. It all depends on the complexity of the patent as well as whether the initial decision is appealed.  Although these fees are a fraction of litigation, they may still be too cost prohibitive for one company to take on by themselves. The potential solution would be to band together to fight the trolls as a group – hence the birth of the idea of a Speech Technology Consortium (STC), which would pool money and intellectual property resources to defend and win against the trolls. There would be a membership fee for participating companies, but no charge for the cost of accepted re-exam requests. A key component of this effort would be to uncover, gather up, and create a database of prior art to be used as evidence in the re-exams.

Ria cited statistics showing a 73% patent “kill rate”, through August 2008, which is a complete elimination of all claims targeted by a requestor, which represents a rate much higher than litigation at 33%.

I just love the whole concept of a group effort to defeat something which only hurts the industry. Needlessly spending money to defend or settle “claims” only drains the coffers of companies trying to honestly innovate, and has the effect of inhibiting new companies from emerging because it jacks up the cost of entry to the market.  I believe that as the STC is developed, that companies in the unified communications space should definitely jump on board and help out as the technologies used in UC, and the features and functions in these claims are interwoven, leaving UC companies at risk of attack too.

I know that it is hard to keep up with companies such as Oracle and Cisco when it comes to acquisitions, but speech technology company, Nuance , has had its fair share over the years, for a company of its size. Lately, that has slowed. My numbers might be slightly off, but in 2007 Nuance acquired seven – BeVocal, Focus Infomatics, Voice Signal, Commisure Inc., Vocada, Viecore, and some technology assets from Tegic. In 2008 Nuance acquired four – eScription, SNAPin Software, Inc., Zi Corporation, and the remainder of Phillips Speech Recognition Systems. In 2009, Nuance acquisitions slowed to three with Jott, eCopy and SpinVox. This year, so far, there has only been one – MacSpeech.

However, it seems Nuance is on the move again as they are in the bidding, along with Transcend Services Inc., and a “stalking horse” bidder, MedQuist Inc., for the bankrupt medical transcription company, Spheris Inc. Spheris is up on the auction block on April 13^th, after having filed for Chapter 11 bankruptcy. When they did that Spheris announced that it planned to sell its US operations to Medquist, and the company’s non-bankrupt India subsidiary to CBay. However, in order for that to go through they need to have an auction, so Nuance and Transcend through their respective hats into the ring.

Will Nuance add another company to its arsenal? Wait and see.

Now that I have weighed in on what happened in 2009, what will happen in 2010? Here is what I think will be hot in 2010 in speech -
Hosted Applications
Hosting is going to stay hot. With companies such as Voxeo, Microsoft Tellme, Contact Solutions, Angel.com, and myriad others providing hosting as an adjunct or alternative to premises-based speech deployments, customers have a lot of safe choices for not having to do everything themselves. No longer an anomaly, I believe that we will see hosting brought up in conversation in the majority of deals in 2010, even if it’s only talked about.

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I didn’t personally do a speech technology prediction column at the beginning of 2009, but one of my colleagues at Speech Technology Magazine did. Eric Barkin wrote a feature article, entitled, 2009: What the New Year Will Bring, in which he talks about the effects of the economy on speech technologies, and on some of the predictions for speech from some of my analyst colleagues. It’s debatable whether the economy has gotten that much better in a year, but that didn’t stop the speech industry from moving ahead. Harvesting nuggets from Eric’s column, here are the predictions from that column, followed by what I think did happen in his categories, along with some others that didn’t make it on his list, but made headlines in 2009 nonetheless.

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This week I participated in a webinar, along with Voxify, on the new VUI or Voice User Intelligence in customer support applications. You can listen to the replay here if you are interested. The main theme was the importance of creating a better user experience for customers within self-service and some of the advanced ways of improving self-service applications to achieve this. The folks at Voxify and I have talked for a long time about how they are improving applications in the hospitality sector with such customers as Red Lion Hotels, so from a over-the-phone customer support perspective, Voxify is using speech, and intelligence about the customer to give the customer better service when they call in.

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This week’s multi-pronged speech technology announcement by Microsoft is just one of a number of interesting speech announcements in the past month on the adoption of speech to improve customer and consumer experience. In the announcement press release, I liked what Zig Serafin, GM of the Speech at Microsoft Group said; “Speech is the new touch”, because it really is. We have known this for quite a while, but now there is an acceleration of the adoption of speech that is happening in mobility applications, desktop, and unified communications, that is quite appealing.

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I ran across this blog , by Houston Neal of Software Advice.com, on seven great applications for IP-PBXs in the medical field, which is a good start to laying out what can be done in different vertical markets with IP, particularly in the medical field, which is ripe for transformation. Houston points out, that in his practice of advising companies of free software to help in business, that in the medical field he believes that there is a lot to be gained by integrating IP-PBXs with electronic health records (EHR) and practice management systems. I couldn’t agree more. He then lays out the seven great applications he feels would be the result of combining voice and data using open source technology.

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I’ll start with a personal note that has bearing on the Unified Communications industry. I use my Blackberry constantly, but I wouldn’t consider myself a power user. I have FaceBook for Blackberry, use the camera, email, get my voicemails dumped into my inbox, etc. But I haven’t downloaded a bunch of superfluous applications to it yet.

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