This lesson was driven home most recently when Nuance Communications acquired Swype, Inc., a small, company whose single product is software makes it simpler and faster to use your finger (or a stylus?) to enter text on a smartphone. According to this SEC filing and this comment by my associate Greg Sterling on Internet2Go, Nuance is committing something on the order of $100 million to merge Swype into its operations, presumably to add Swype capabilities to its Flex T9 interface.

In his post, Greg questions why Nuance needs to buy Swype, even as Flex T9 already outperforms Swype in some respects. He presents a list of possible answers to his question, including what I would call “the three P’s,” patents, positioning and personnel. But I would add a fourth: “Packaging.” Swype’s market proposition was simplicity itself: “Swype is a faster and easier way to input text on any screen.” That’s it. And it won over a following.

As for Nuance, it is following its time-tested modus operandi for constant improvement and refinement through acquisition. It’s been doing to bring specific refinements to its product portfolio automated speech processing – including voice biometrics, directory assistance/auto-attendant, text-to-speech rendering, dictation, medical transcription and other domains that benefit from solving specific problems. The core T9 technology came with the acquisition of Tegic from AOL-Time Warner in 2007 for $247 million. At the time I called it part of Nuance’s “Pay It Forward” strategy of constantly improving a mobile subscriber’s ability to take control of his or her device and the services provided through it.

For Nuance, it adds to its portfolio of technologies that support highly personalized mobile services. For Swype, it provides a windfall, liquidity event that satisfies its founders and investors. For those of us into pattern recognition, this acquisition is similar to the one that brought GroupMe – a year-and-a-half old, single-product company – into Microsoft/Skype’s pantheon of products and services. A journalist at the International Business Times-Australia accurately referred to GroupMe as “a super-small, zero-revenue tech company founded only last year at the Techcrunch Disrupt Hackathon.”

So why did GroupMe fetch a multi-million price (rumored to be between $65 and $78 million) from Microsoft? The resemblance to the Nuance/Swype deal is striking. First, GroupMe solves a known problem confronted by millions of mobile users as they try to form small groups on the fly. Or as GroupMe puts it on its Home Page: “Group Messaging from Any Phone.” Second, it’s not an “app,” it’s part of the user interface. It can be generalized across multiple modes and media. As we’ve learned with Google+ and, with some difficulty on Facebook or LinkedIn, we humans benefit from group-forming utilities. GroupMe’s core product may be the result of a mere eight hours at a TechCrunch Hackathon (using Twilio’s tools on Amazon Web Services EC2, incidentally) but it fulfilled a recognized Gap in Skype’s mobile user interface.

The acquisition enhances the Microsoft/Skype e-services genome. It’s a grand slam home run for GroupMe. From the mobile subscriber’s point of view, it improves his or her ability to take control of their device and the services it offers. See the pattern?

The latter app, Mobile Voice Control, provides companies with the ability to employ Dragon Speech recognition to speech enable popular applications. It is the same resource that is integrated into Siri, Price Check by Amazon, Ask for iPhone and many other speech enabled mobile services.

The complete Mobile Advantage Portfolio will add more natural language processing under the name NaturallyMobile and stronger authentication mechanisms employing the capabilities of Nuance’s line of voice biometric based speaker verification. The objective is to provide its enterprise customers with foundational resources to support a better mobile experience for their customers.

I agree with the company’s researchers, product managers and general management with the belief that the combination of strong authentication, accurate speech recognition and better language understanding supports better conversational commerce. Opus Research’s sees conversational commerce as grounded in “Trust, Transparency and Convenience.” Nuance has distilled a parallel set of objectives for Mobile Advantage by supporting “discovery, accessibility, connectivity and simplicity.” If done right, they amount to the same thing.

Nuance is pushing ahead with the development of a platform and service architectxure with the working name of “Prodigy” to capture organize the components of a better mobile customer experience. The Mobile Advantage portfolio is the starting point. It brings together voice control with call steering while taking into account understanding and recognition of each individual’s intent. DragonGo! is an excellent precursor product for a high-quality customer experience. It combines accurate speech recognition with an engine that does a good job of imputing the speaker’s intent and then linking directly to a mobile resource that addresses the user’s need.

The number of targets is comprehensive (around 200), yet constrained, in that it has deeper integrations to popular, relevant destinations like Yelp!, Google Maps, Fandango, OpenTable. It recognizes the difference between an instruction and information that can be used for form filling. It also provides for user iteration. If it delivers query results from Yelp! when Google Maps would be more appropriate, it allows for the user to move a visual carousel to the more appropriate resource.

It is not hard to imagine how an enterprise customer care app can be adapted to the Dragon Go! approach. It is all about recognizing the customer’s intent and delivering the right resource and doing as much as possible in a user-controlled (aka self-service) model.

Syclo, founded in 1995, has a history of working with SAP, IBM and other major enterprise infrastructure providers to extend corporate network services to mobile workers and customers. Its flagship “platform” called Agentry is now integrated with West Interactive’s customer care platform in order to provide West’s customers with ways to interact with mobile customers that has proven to be reliable, scalable and secure.

“Mobile fragmentation” (resulting from the existence of multiple operating systems on smartphones, as well as the staying power of feature phones) has been the bane of the application development community. Over the years Syclo’s has created a software development tool that co-founder Dave Kleban told us enables programmers to create scripts or programs that run as “native apps” without writing any lines of code. Support for multi-modal customer care strategies is a clear benefit.

West Interactive’s programmers can “orchestrate” the end-to-end customer experience across many touchpoints. For example, in the utilities vertical where they have many clients in common, the orchestration of a service call (truck roll) can be accomplished more smoothly when scheduling, notification, confirmation or facilitating changes can be carried out using the medium of the customer’s choice.

The Syclo partnership comes on the heals of a deal with Radian6 (now part of Salesforce.com) to define a way for West’s clients to incorporate feedback from social networks into the customer care loop. It shows that West is willing to identify and forge relationships with “best-of-breed” technology providers to bring its clients into the age of social/mobile aka Conversational Commerce.

As Todd Mozer, CEO of Sensory, explained to us, “version 1.0 was primarily a trigger,” meaning that its primary use involved detection of a wake-up word or phrase to activate a device or initiate a predefined interaction (like dictating an email, SMS, Tweet or Facebook posting; or initiating a mobile search). TrulyHandsFree Voice Control 2.0 adds “multiphrase” technology, meaning that it will be able to recognize and respond to a broader variety of words or phrases in order to “wake up” and respond accordingly.

The ability to distinguish spoken words from background noise is a major advancement. Rev 2.0 couples speech detection with a model for phrase recognition which enables a mobile device or toy to, in Mozer’s words, “reject the wrong words and accept the right words” in order to respond accordingly. Sensory has been working on this, more resilient “hands free” approach for a number of years. It is significantly different from Rev 1.0 of Sensory’s product as well as competing products. The additional accuracy and coincides with equally impressive advances in text-to-speech rendering and device-based speech recognition (and “understanding”). As a result, Sensory expects this approach and user acceptance to be prevalent in a two year period in cars, the kitchen and kid’s room, running on devices and products from the likes of Samsung, Mattel and others.

The technology is initially available on Android-based phones, devices and browsers. The result will be a dramatic change in user expectation regarding what end-users can accomplish without pushing any buttons.

The implication for companies who are defining their “mobile customer care” strategies should be obvious. Any of their Web developers that are familiar with HTML5 and Javascript can add phone calls or chat to their mobile Web sites. The service communicates either over WiFi or 3G data links. It can also connect to resources in Voxeo’s Tropo.com “cloud” which, in turn adds automated speech processing in 24 languages, call recording functions and (thanks to conformance with XMPP/Jingle) the ability to communicate with “public” Instant Messaging networks, including Google’s GTalk, Microsoft’s MSN Messenger, Yahoo! and AIM. They can even connect to Twitter.

The PhonoSDK was launched in October 2010. In the months that followed, a community of roughly 10,000 developers have downloaded it and joined the community. Phono Mobile also uses the PhoneGap application platform from Nitobi Software to provide a way for developers familiar with JavaScript to gain access to native applications and features (like cameras and softphones) on multiple devices.

As I write these stories, I sense an acceleration of interest in fraud-prevention solutions that include voiceprints. It is driven by growing recognition on the part of “card issuers” (be they banks, government agencies, healthcare providers or retailers with loyalty cards) that the use of mobile devices to carry out commerce brings greater exposure to fraud. It is the sort of fraud that can be prevented by “stronger” user authentication as required. Voiceprints fit the bill because they provide “proof of life” (as VoiceTrust puts in its product literature) and a true second factor (“something you are” as opposed to two instances of “something you know”).

I’m also pleased to announce that I’ll be giving a short presentation on the power of voice biometrics at the upcoming 5th Annual Security Confab, which is a venue for thought-leaders to meet and discuss the developments shaping the security world.

In April, the company raised $10 million from a group l;ed by SingTel Innov8, (SingTel Group’s corporate venture capital fund), along with Singapore’s Infocomm Investments and previous investors: Sequoia Capital, Palomar Ventures, and NGC. Total venture capital behind the firm is now approximately $40 million.

A couple of weeks ago, Opus Research reached Tom Clayton, CEO and President, to get a better understanding of the company’s growth and strategy. As we noted in this post last year, only time would tell whether Bubbly would be a the voice version or Twitter or just a Bubble. Performance, to date, points to the former. The company continues its explosive growth and has plans to continue to expand its geographic footprint. India remains its biggest market, followed by Indonesia, the Philippines and Japan.

Over time, the company has seen the share of traffic driven by “Community Blogs” (rather than from “Celebrity Posts”) grow from 10% of traffic a couple of years ago, to 45% today. The company defines this sort of communications as “friends calling friends” or “peers calling peers.” As Clayton explained, “It was key to transitioning from celebrity broadcasting to part of everyday life.” Just as it moved into voice-based initiation of text among friends, the company looks to adding photos and even video as it transforms into a mechanism for originating a tweet on Twitter or posting to Facebook.

As the company seeks to grow into North America, it expects to take an “Over The Top” (OTT) approach by developing mobile apps for iOS or Android based devices. At the same time it plans to grow beyond SMS-based message origination. It is targeting heavy Twitter users, as measured by number of followers. The company understands how to use celebrity posting as a springboard, while keeping its eye on the larger community as the real engine for traffic. Over its years of operation, it observed retrieval rates and “engagement rates” among community networks to be “four times” those for celebrity posts while, at the same time, the user population is growing twice as fast.

The mobile applications are expected to make full use of the real estate “on the glass” of today’s smartphones. Content – be it audio or text – will appear in bubbles that move dynamically on the screen. At the same time subscribers will be able to log their own comments, which appear simultaneously. Community members can choose to participate or, like many frequenters of Facebook or Twitter’s sites, they may choose to scroll through the scads of other people’s content.

The acquisition marks an acceleration of West’s mobile strategy. Smoothstone’s value proposition has evolved over the years. For much of the time it served as a single-point-of-contact for medium sized firms with multiple-sites and multiple vendors to work with as they migrate to IP-based platforms. The company lists both Cisco and Avaya as its strategic partners in the managed services channel. What has set it apart more recently is its relationship with Sprint, characterized as “a strategic alliance to bring mobile workers the functionality of a cloud-based PBX” over the carrier’s wireless broadband network.

Smoothstone extends its clients’ enhanced communications capabilities to mobile employees through its Mobile Connect product. Its downloadable apps for both iOS (Apple) and Android-based phones enable users to take advantage of the company’s PBX-like features, including access to the corporate directory, abbreviated dialing to other employees, long-distance and international calls at the corporate rate, voice mail and conferencing.

As noted above, West will continue to have two distinct lines of business for its multiple business units. Smoothstone joins the Unified Communciations group which houses Conferencing and outbound Alerts and Notifications, as well as System Integration and Consulting. For the record, West’s financial statements show that UC, for the first time, is more than half of the revenues of the parent company (exceeding $1.2 billion in revenue in 2010 – up 8%, compared to Communiations Services’ (CS) $1.17 billion in revenues and a 6% decline). More importantly, UC is proving to be more profitable than CS, with roughly 60% operating margins, compared to closer to 50% for CS. With the acquisition of Smoothstone the center of gravity for West Corporation is destined to move toward general managed IP-based services.

As for contact center and self-service businesses over in CS, everyone should take heart in the fact that, in the world of Conversational Communications, traditional contact center functions – customer acquisition, customer support, upsell/cross-sell, and all that – going enterprise-wide (and beyond). Conversations between and among employees, customers, prospects and “influencers” take place on a plethora of platforms and the synthetic division between UC and CS will be a challenge to maintain. By having experience, customers and products in both camps, West is in a good position to manage how enterprise-wide IP-based assets can be brought into the talk paths between its clients, their employees and their customers.

That’s why it is no surprise that SpeechCycle, a firm that has pioneered robust, phone-based self-service application development, has hit a billion interaction milestone. The company is one of a handful of firms that have developed core technology and tools to enable companies to extend high-quality customer service over multiple channels. Its umbrella platform supports “Rich Speech Apps” and it was the topic of this Webcast in which I presented the findings of a survey we conducted to discover the preferences that customers and prospects indicate as they go about their daily efforts to find the companies they prefer to do business with and the products and service offerings that their friends recommend. Zor followed with a demonstration of the company’s SmartCare application, providing a way for communications companies to offer high-quality customer care at high levels of automation.

I’ll have a lot more to say about the future self-service and assisted self-service in a couple of days, after gaining insights from major retailers and enabling technology providers at Orange-SF. The key underpinnings of SpeechCycle’s revolve around its ability to support customer empowerment which, to my mind, is the foundation of true self-service.

It makes sense that Turkcell is enjoying unprecedented success with voice biometric authentiication. Turkcell has over 33 million wireless subscribers in a country with a population of nearly 72 million, compared to Bell Mobility’s 7 million mobile subscribers (in a country with a population of 34 million. There’s an “apples to oranges” phenomenon taking place, given that Bell Canada (Bell Mobility’s parent company) has been offering its Voice Identification Service (VIS) to customers who have taken one or more of its “Quadruple Play” options: residential phone, wireless, Cable TV and Internet services.

Global Bilgi, by contrast, is a fully owned subsidiary that is operates a network of 12 customer care contact centers with 5,500 “seats.” It employs over 7,500 people and provides its “value added services” to more than 50 million people in Turkey and another 10 million in Ukraine. Its decision to incorporate “voice signatures” into the flow of customer care may well prove to be a watershed moment for the cause of voice biometric-based authentication. It demonstrates how the the technology supports secure, safe and expeditious customers care.

As explained in this press release, using “voice signatures” to authenticate callers reduces “the communication period by 20 seconds for individual subscribers and 40 seconds for corporate subscribers.” In high-volume contact centers, this sort of reduction in agent work time and call duration leads to very short payback periods (as little as 5 months) and very impressive ROIs. Just as important, these savings are accomplished while delivering higher levels of customer satisfaction and a sense of higher security.

Global Bilgi is deploying technology provided by Nuance Communications, built on PerSay’s VocalPassword. It has demonstrated efficacy, usability and the ability to scale in response to the growth in customer demand. On March 1, Nuance’s Chuck Buffum and I will delve a little deeper into the Global Bilgi implementation in this Webcast. A representative of the company will also provide insights, based on experience, at the Voice Biometrics Conference-Amsterdam (VBC-Amsterdam), March 23-24.

With companies like Bell Canada, Turkcell/Global Bilgi, National Australia Bank, Citibank (Australia) and a number of mobile initiatives underway, the growth potential of the voice biometrics-based authentication is palpable.