Global investment in voice technologies in 2001 is already up by 33 percent, compared to the total investment made in 2000, according to a report by Datamonitor, which also predicted the voice business will grow at a compound annual growth rate of 43 percent from 2000 to 2006.
Speech recognition technology has come under criticism because it is perceived as yet another new technology that is difficult to implement, costly and unreliable. But Datamonitor found it has already proved its worth by boosting bottom lines, reducing costs, improving service and generating new revenues.
Telcos, in particular, should see voice business as an opportunity not to be missed, according to Datamonitor, but they have so far been slow to market. Voice-enabled services can help telcos overcome the problems caused by diminishing traffic revenues and increased customer churn. Wireless carriers can use voice-enabled services to get many of the benefits promised by 3G networks, without the associated cost and time delay.
Datamonitor’s report predicts that global investment in business applications of speech recognition technology across networks will grow from $650 million today to $5.6 billion in 2006. This growth will be spurred by increased knowledge of and familiarity with the capabilities of speech recognition technology and the quick and huge rewards that enterprises stand to gain from their investment.
Currently, enabling technologies, including speech recognition and text-to-speech engines, account for the largest proportion of voice business value chain revenues. However, by 2006, Datamonitor predicts there will have been a value shift toward applications and services. Application development will become the most valuable section and will generate 31 percent of value chain revenues in 2006, compared to 23 percent in 2000. As the very technologies that enabled voice business in the first place become more commonplace, more value is added by those that can apply them to real business problems. While many voice application development start-ups will struggle without consolidation, and Datamonitor expects that the widespread uptake of standards such as VoiceXML will enable giants from the Web and systems integration worlds to benefit from their pioneering work.
Due to their stronger economies, higher technology spend and more developed customer service/call center markets, Europe (31 percent) and North America (61 percent) currently dominate the voice business. However, Asia-Pacific’s share of revenues will increase from just 5 percent today to 16 percent in 2006. This growth will be seen initially in Australia and New Zealand; countries that can take advantage of the English-language technologies developed for the U.S. market.
Speech recognition technologies are still plagued by the general perception that they are not quite ready yet, and there is still a reluctance to invest in what is seen as a new and risky technology. The early adopters (largely in the banking, brokerage, travel and tourism and telecom sectors) have been benefiting from their voice business investments for several years now and these sectors still represent the most attractive opportunities for voice business vendors.
However, the voice business is starting to affect consumers’ everyday lives. Prominent companies are starting to offer voice-enabled services, including AOL’s AOLbyPhone service, Onstar’s in-car services and Sprint PCS’s voice-activated dialing. The resulting increased familiarity with the capabilities of voice business will help vendors overcome skepticism and take their products to a wider audience.
Those that will benefit the most from the growth in voice business will be vendors of enabling hardware, vendors of the core enabling software, larger application developers that can demonstrate voice expertise, telcos and systems integrators.
“This is an exciting time for people involved in voice business,” said Dan Hawkins, voice business program manager at Datamonitor. “Speech recognition allows businesses to take advantage of the ubiquity of the telephone, the automation advantages of the Internet and the increasing penetration of mobile devices, thus enabling them to improve customer service, generate new revenue and reduce costs. There are already numerous examples of implementations that have delivered high returns on investment and companies that don’t seriously consider the opportunities that speech recognition offers them will miss out.”