SpeechWorks Puts Money Where Mouth Is

SAN FRANCISCO (02/04/2000) - NOTE TO EDITORS: This story includes information that was disclosed to the IDG News Service under the condition that it not be made available to the general public until Tuesday, Feb. 8. We are making this story available internally to the IDG editorial community for your convenience in planning the forthcoming issue of your print publication. If any other public news source -- print or online -- breaks the embargo, the embargo will be considered irrelevant.

Telephone speech recognition specialist SpeechWorks International Inc. is putting its money where its mouth is -- literally. If the company fails to deliver a phone-based speech system that performs as previously agreed between vendor and user, SpeechWorks will bear a financial penalty until it is fixed, the vendor announced today (Feb. 8).

Under the terms of the company's money back SpeechWorks Here Guarantee, the vendor and its enterprise customers agree on a specific transaction completion rate -- typically around the 90 to 95 percent mark -- that SpeechWorks' tailored speech applications must reach within 30 days of a determined upon full deployment date.

If the target isn't met, SpeechWorks will pay the customer 1 percent of the purchase price of its software quoted in the contract between the two parties.

For example, for projects encompassing up to six staff months in duration, SpeechWorks will forfeit 1 percent of the contract value per business day.

Steve Chambers, vice president of worldwide marketing at SpeechWorks, estimated that SpeechWorks' contracts run from between US$100,000 and $1.5 million in value.

"It's what the industry needs; we're putting our money where our mouth is," Chambers said in a recent interview with IDG News Service. "This will really determine this market and motivate a lot of copycats."

Although Chambers said that the speech-recognition software market overall is experiencing "explosive growth," however a "strange visibility awareness issue exists among customers so that they're not aware what's currently possible with the technology." That problem can be resolved once customers get familiar with what the technology can offer, but the more important problem is convincing them of the relevance of speech recognition to their own businesses. "This program guarantees that we can work together and deliver what the customer wants to experience," Chambers said.

SpeechWorks has already piloted the guarantee program with four of its leading enterprise customers, including United Airlines Inc. and Continental Airlines Inc., Chambers said. Today's announcement is the formalization of the program.

The company is launching the guarantee in the U.S., with plans to eventually migrate it elsewhere in the world, Chambers said.

The SpeechWorks software is self-learning and can learn users' accents, Chambers said. The software is currently available in 15 languages and dialects, including French, Canadian French, Spanish, German, U.K. English, U.S. English, Japanese and Mandarin Chinese.

The SpeechWorks Guarantee is part of the company's customer program launched today, which includes two other features -- the SpeechWorks Here Mark and Market Accelerator Programs.

A customer signing up for the guarantee is required to include the SpeechWorks Here Audio mark -- a 1.5-second sound bite announcing "SpeechWorks here" at the start of their speech application -- and to use the SpeechWorks Here logo as a visual brand on three forms of promotion for the system. "It's not an intrusive branding program like 'Intel Inside'," Chambers said. "The SpeechWorks Here Audio Mark shows users that they're about to engage an automated system."

The Market Accelerator Programs are bundled market consulting services designed to help SpeechWorks' largest companies evangelize the technology within their own companies. "Our biggest customers say 'Help us market it, teach us how to promote it,'" Chambers said.

"This is a very clever move by SpeechWorks, they're playing their trump card," said Mark Plakias, director of voice and wireless commerce with The Kelsey Group, a market research and consulting firm based in Princeton, New Jersey specializing in the speech commerce industry. Since SpeechWorks has a direct sales organization, they are one of a very few players in the call center market who could make such an offer with other companies such as Nuance Communications Inc. operating largely through third-party distributors, he added.

SpeechWorks' timing is also spot-on, as call centers are looking for the next generation of systems. The year "2000 is when most forward-thinking financial, manufacturing and travel companies are taking a look at IVR (interactive voice response) opportunities," Plakias said. "Their current apps are getting kind of old. They're looking for the next step forward, which is speech."

Another guaranteed approach to ensure performance-based pricing for speech recognition software may well come from ASPs (application service providers), who charge on a per-transaction basis, Plakias said. However, San Jose, California-based VOCI Corp. aside, there aren't many speech-based ASPs in the market yet, although more are likely to appear, he added.

Founded in 1994, Boston, Massachusetts-based SpeechWorks employs more than 200 people. The company's main products are its phone speech recognition system SpeechSite and its automated speech recognition software SpeechWorks. Customers include BellSouth Corp., ETrade Group Inc., Federal Express Corp. and Hewlett-Packard Co.

Last year, the Stock Exchange of Singapore (SES) launched a speech-activated stock quote system using SpeechWorks' voice recognition software able to handle inquiries made in Mandarin Chinese as well as English spoken with a Singaporean accent. [See "SES Launches Chinese Voice-Activated Stock Quotes," Apr. 15, 1999.]Privately held SpeechWorks counts among its investors ERP (enterprise resource planning) software vendor SAP AG and U.S. chip giant Intel Corp.

SpeechWorks has developed an application template to speech-enable SAP's R/3 sales, services and distribution module and intends to support more R/3 modules, Chambers said. The company is supporting Intel's upcoming Itanium chip architecture, since speech applications require plenty of processing power, he added.

SpeechWorks, based in Boston, Massachusetts, can be reached at +1-617-428-4444 or via the Internet at http://www.speechworks.com/.

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