Microsoft’s quest for an acquiring company that will do justice to the legacy of Tellme Networks, referred to as its “interactive self-service assets” in this press release, has resulted in the formation of [24]7 Inc. The new company absorbs roughly 400 former Microsoft employees, along with a significant amount of intellectual property and an existing customer base. It will promote cloud-based “natural user interface” (NUI).

Microsoft will retain an equity interest in the new company, which expects to generate about $250 million in revenue. Microsoft will jointly fund R&D efforts around the company’s core differentiator, which it refers to as a cloud-based “Predictive Experience” platform resulting from combining the automated speech recognition and interactive voice response resources from primarily from Tellme, combined with the dynamic and predictive business logic developed both by Voxify (for leading edge customers like Avis Rent-a-Car and Continental Airlines) and [24]7 Customer (primarily to support predictive handling of Chat-based interactions with live agents).

The merger exposes the new competitive terrain for customer service. It is a world where accurate speech recognition is closely coupled with computing power and data processing “in the cloud.” In essence, the same architecture that makes the mobile voice assistant Siri such a popular feature on Apple’s latest iPhone is destined to drive customer expectation for successful voice-based interactions over mobile devices… in addition to high expectations for the same level of success over the Web, via chat, IM or basic form filling.

In addition to [24]7 Inc. (with Microsoft) the competitors in this newly exposed territory includes hosted customer care specialists who support both automated and live agent interactions, like Convergys, West Corporation, AT&T and Verizon Business. But it also makes it a necessity for hosted self-service specialists, including Angel, Voxeo, and Nuance to leverage interactions with CRM (customer relationship management), BPM (business process management) and e-commerce partners. It is a wide world of opportunity for the likes of Salesforce.com, Oracle, IBM and Amazon.com.

A Little Historical Background
When Microsoft acquired Tellme Networks in March 2007, company management had a pretty good idea of all the goodies in the hosted speech application provider’s portfolio. In its press announcement it called the company “a leading provider of voice services for everyday life, including nationwide directory assistance [DA], enterprise customer service and voice-enabled mobile search.” During the ensuing years the DA operations, which were offered on a wholesale basis to wireless and landline carriers, came under competitive pressure from “free” services, especially GOOG-411 from Google.

In both the mobile and enterprise customer care realm, Microsoft anticipated that it could leverage the “on-demand” nature of capabilities in Tellme’s cloud “to advance natural user interfaces across Microsoft products to benefit billions of customers worldwide.” By 2009, Tellme had become the basis of Bing Mobile – supporting natural-language mobile search and applications running in Tellme’s cloud (including some developed by Voxify) were showcasing impressive, conversational customer care for financial services companies (Amex), airlines (Continental and – soon – United), Avis Rent-a-Car and many others.

Microsoft’s Tellme platform has two roles to play in the world of mobile customer care. It is the platform that can ultimately support Siri-like, self-service interaction with a range of personal devices, including smartphones, feature phones, automobiles and auto electronics, videogames, TVs and other household appliances. It is also the speech recognition and language understanding engine that powers Bing Mobile to support search, Q&A, shopping and the like.

Xbox also features voice control, which like Siri will help popularize and “educate” consumers about how to interact with speech assistants/agents. Though not focused specifically on mobile customer care, Tellme remains a significant player in the hosted, speech-based self-service market. Its partnership with Voxify has yielded some impressive examples of mobile care apps and an impending merger that brings Tellme and Voxify under the umbrella of a newly chartered [24]7 Inc. will coalesce around mobile customer care.

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