Speech IVR Market Update

Wednesday Oct 9th 2002 by Jonathan Eisenzopf
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Is the new speech IVR market segment healthy? Will VoiceXML replace proprietary development environments? VoiceXML expert and consultant Jonathan Eisenzopf provides a summary of recent activity and trends in the speech IVR market.

VoiceXML expert and consultant Jonathan Eisenzopf provides a summary of recent activity and trends in the speech IVR market.

Overview

Now that VoiceXML has been around and available for a couple years, some industry watchers are probably wondering where things are moving. Is this new speech IVR market segment healthy? Will VoiceXML replace proprietary development environments? Will the incumbent IVR vendors embrace speech and Web technologies? Is it safe to move to a VoiceXML system now or should I wait for SALT?

Incumbent IVRs Will Support VoiceXML

Edify, InterVoice-Brite, Nortel Periphonics, Avaya Conversant and Genesys all support VoiceXML in one form or another. The common approach is to allow the IVR call-flow diagramming tools to export the flows to VoiceXML. The VoiceXML output is processed by a VoiceXML interpreter and uses the same low level software to manage call-control as is used by the proprietary languages. This satisfies the needs of existing customers who are looking to migrate applications to VoiceXML and also provides an outlet for new customers to deploy VoiceXML applications using an established vendor.

Incumbent IVR VoiceXML Support Still Immature

While the incumbent IVR vendors have more experience and history in the marketplace, VoiceXML and speech recognition are still relatively new technologies for these companies compared to the old reliable touch-tone standard. Some IVR vendors are just now testing the waters with VoiceXML support.

With the exception of IBM, the VoiceXML implementations offered by the incumbent IVR vendors I mentioned above have only been made available to customers at the end of the 2nd and beginning of the 3rd quarter of 2002. There are few, if any, customers using these new implementations. Additionally, there will likely be some issues with the first versions of these VoiceXML browsers that products such as Voice Genie, IBM Voice Server and Nuance Voice Web Server have already shaken out near the end of 2001 and the beginning of 2002.

If you need a VoiceXML platform now, I would recommend looking to one of the newer speech IVR companies or IBM, as they have more experience with speech. If you already have an IVR system from one of the incumbents and you can wait six months to a year for them to ramp up to full speech IVR support, I would recommend giving them a call to see if you can evaluate their VoiceXML functionality over the next few months to determine whether an upgrade would be beneficial for your organization.

VoiceXML Still Seen as Immature

Some IVR programmers and salespeople that I've talked with still see VoiceXML as an immature technology and are relaying the same message to their customers. There does seem to be interest from customers in VoiceXML and speech recognition which is driving vendors to adopt the new technology.

The Rift Between Telephony, Speech Recognition, and the Web is Still Gaping

VoiceXML brings together three distinct technologies (telephony, speech recognition, and Web) that have communities of technologists and practitioners which have traditionally stayed apart. These groups are now coming together in VoiceXML and there is quite a bit of clashing and difference of opinion based on each groups' background experience. I think this clash will go on for a while, but the result will be a new breed of practitioner that understands the range of technologies and issues that relate to each of the three technology practices.

Customers "Get" the VoiceXML Value

Customers are pretty smart about the benefits of VoiceXML. Some of the benefits from a customer's point of view are:

  • We can use our preferred programming languages to write IVR applications
  • VoiceXML is relatively easy to learn
  • We don't have to duplicate code for the IVR to use our business logic. We can re-use our client/server and Web logic using the same code and application servers.

One of the benefits that customers expect (but don't get) from VoiceXML is that they can port their applications from one platform to another without much work. Unfortunately, I have to explain to customers that while VoiceXML is a standard, not all vendors support all the elements in the same way; and there are certain features like grammars and call control that are still not standardized in the commercially available VoiceXML implementations.

Speech IVR Market is Growing (Slowly)

The IVR market as a whole will not see much growth in 2002. There will be some growth in the speech IVR market, but I don't expect that it will be more than a few percentage points more than 2001. Many companies that are looking at upgrading their IVR systems are considering speech recognition and VoiceXML as an option.

One growth area that could develop towards the end of 2002 is offerings that are targeted at the small- to medium-sized business market. For example, Angel.com, owned by business intelligence software maker Micro Strategy, allows businesses to create hosted speech IVR applications using a tool that is simple enough for non-programmers to use. What makes this type of solution interesting is that smaller businesses that might not have been able to afford a PBX with an auto attendant feature can now afford a hosted solution that uses speech recognition for a low monthly fee plus a per-minute rate.

Don't Wait for SALT

Many are still wondering whether they should wait for Microsoft and other vendors to provide SALT instead of using VoiceXML. My advise would be, if you want to implement a speech IVR in the next year, don't bother waiting. It will take that long for vendors to release SALT support and there isn't a clear advantage in SALT over VoiceXML for developing a speech IVR system.

Top Speech IVR Vendors

While my list of recommended speech IVR vendors will likely change as incumbent IVR companies improve their VoiceXML support, the only incumbent that I've spoken with (other than IBM) that is aggressively marketing and supporting its VoiceXML capability and also has speech recognition experience is InterVoice-Brite. So my top 6 vendor picks for the 3rd quarter of 2002 are (in no particular order:

  • Nuance
  • Voice Genie
  • IBM
  • InterVoice-Brite
  • Genesys
  • General Magic

Conclusion

To summarize:

  • VoiceXML and speech recognition are being slowly adopted by vendors and customers.
  • I still believe that speech recognition and VoiceXML will slowly replace touch-tone IVRs. 
  • While the growth of speech recognition and VoiceXML in 2002 will continue to be slow, it will be steady.
  • Incumbent IVR vendors are introducing better VoiceXML and speech recognition support into their products.
  • Only a few of the new speech IVR companies will be able to maintain their market share as the incumbent IVR vendors strengthen their VoiceXML and speech recognition support.
  • There could be growth in the small to medium sized market if companies like Angel.com are able to offer pre-packaged applications that work better and are cheaper than on-premises systems.

About Jonathan Eisenzopf

Jonathan is a member of the Ferrum Group, LLC  which specializes in Voice Web consulting and training. Feel free to send an email to eisen@ferrumgroup.com regarding questions or comments about this or any article, or for more information about training and consulting services.

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