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Nuance Communications, Inc. Message Board

  • GrahamSeib GrahamSeib Oct 23, 2008 1:49 AM Flag

    The big foot waiting to drop

    Nuance has captured the market in the continuous dictation field. IBM, Philips, SpeechWorks, old Nuance, and others lost to history. Microsoft is the only supposed competitor.

    Microsoft has been going to have speech in their product line for a decade. It was supposed to have been part of Vista -- remember that debacle of the demonstration that showed up on YouTube? They can only be falling farther behind.

    A significant benefit of Nuance's focus on medical is that they have access to massive databases of user experience. Improving the product from this point is not so much a matter of genius programming as it is steady, hard, block and tackle work, identifying common misrecognitions one by one and putting small patches into the reference tables and the software. You do this language by language, workplace sphere by workplace sphere. Only Nuance has the scale to do it -- it will put them farther and farther ahead of Microsoft or anybody else.

    If Microsoft wants speech across their product line, they will someday have to come to Nuance. There is simply no other way to develop a world-class product in terms of the numbers of languages supported and the quality of the product. It takes an immense amount of work. There was a two-year gap between the release of Dragon 9.0 and 10.0, and Nuance claims only a 20% improvement in recognition quality for that work. This is a difficult game. It does not make business sense for Microsoft to build when they could buy.

    Microsoft faces other constraints. Nuance has the synergy of working with all players in the field. Microsoft faces the problem that many players in the data processing world are its customers and competitors. Moreover, the industry's trust level for Microsoft is not very high. If Microsoft were to develop good continuous speech, they will still have less market potential than Nuance.

    Could Microsoft acquire Nuance? No, the antitrust issues would be too formidable. Nuance itself has had to answer antitrust questions in its skein of acquisitions. And, once again, Nuance's potential would be less viable as a part of Microsoft than presently, as a stand-alone entity.

    To me the logic says that Microsoft will be driven to use Nuance if it wants speech in its products. The companies already have a track record of cooperation on the Ford Sync product. Ford may be sinking, but the Sync itself is a success. Nuance inherited Microsoft is a partner in the Philips acquisition. From all I see, Nuance knows how to be a good partner.

    When and if Microsoft incorporates speech using Nuance, that will be the imprimatur needed for much wider use. People who teach Microsoft will teach the use of speech.

    When will it happen? Microsoft could use a little juice at the moment. The desktop business is their most profitable segment, and it is a little bit long in the tooth. As Gates has seen for the last decade, speech will really jazz it up. The question is, when will they concede that it has to be somebody else's speech products? They are not dumb. My hope is it is sooner rather than later.

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