It’s November and corporate attention has clearly turned toward cleaning house in preparation for the coming year. Last week, we noted how Marchex is accelerating its Conversational Analytics efforts by acquiring Telmetrics. Its $13 million deal pales when compared to the $8 billion that SAP is paying for Qualtrics and its expertise in “Experience Management”. Both acquisitions coincide with a very important divestiture as Nuance Communications sells its Document Imaging operations (NDI) to Kofax for $400 million, where all the great intellectual property developed by Kodak over many decades now resides. According to the press release, “More than 6 million knowledge workers use NDI’s Capture and Workflow solutions. The company has more than 100,000 active deployments of its Print Management solutions.”

The common factor among these acquisitions is a focus on customer experience and the value of conversations. For Marchex, that means adding new customers and capabilities that value both chat and spoken words as indicators of customer intent. The SAP/Qualtrics combo, which is orders of magnitude larger, brings tools that SAP enterprise customers can use to gauge important factors like customer sentiment and employee engagement to support better customer experience. Even though general press coverage has characterized Qualtrics as a competitor to SurveyMonkey (mostly because it had recently completed an IPO), its products and services map more accurately to Conversational Analytics. The result is an SAP that is better positioned to compete among firms that are filling out gaps in their Intelligent Assistance solution stack.

Addition by Subtraction: The Conversational Singularity

This brings us to Nuance. It is adding by subtraction. NDI is the direct descendant of a company called Visioneer, with a history dating back to the 1970s when Ray Kurzweil (yes, father of the Singularity) was working his magic in the area of optical character recognition. His company was sold to Xerox and then spun out initially as Visioneer and then Scansoft. In 2005, Scansoft acquired Nuance, ending a decade long rivalry between SpeechWorks, which it acquired two years earlier. Recognizing that the combined company would not focus on either document imaging or speech-enablement, it opted to make Nuance both the brand and the formal name of the combined corporate entity.

In the first nine months of Nuance’s fiscal year (which ended September 30), NDI accounted for roughly 10 percent of revenues and profits. Revenues of $159 million had grown 2.6% over the prior year, but profitability had plunged 13.2%, reflecting heightened competition from the likes of Kofax and increased marketing costs to continue to boost demand. Meanwhile overall revenues, led by Healthcare (transcription and workflow), Enterprise (which includes customer care and conversational intelligence) and Automotive, showed higher growth in revenue and variable profitability. Divesting NDI provides the opportunity to focus bringing the beneficial elements of Conversational AI, meaning Natural Language Processing, Speech Processing, Voice Biometrics and Service Creation tools to its core markets of Healthcare, Horizontal Customer Care and Mobile.

Investments Focus Greater Precision for CX

Entering 2019, it is clear that enterprises and brands will be called upon to be more respectful of their customers’ rights to privacy. They will need to offer highly personalized services, in real time, with less access to personal information. It means that they will have to do a better job of listening to and understanding each person’s words, regardless of whether it is speech or text; and whether it is in the course of a conversation or in response to a customer survey.

Marchex’s investment in Telmetrics will make it a better listener with access to more conversational material and analytic resources. SAP’s investment in Qualtrics also makes it a better listener, and it augments it with additional data and metadata from customer survey results, as well as customer profiles and records that populate SAP’s CRM, ERP and HRM resources. Meanwhile, Nuance is shedding a category of pattern recognition that applies to static records (printed material) so that it can focus on real-time, and near-real time input and interactions.

When it comes to customer experience in the age of intelligent assistance, the overall objective is to “do more with less”.

Categories: Intelligent Assistants