On the same day as the big news that Google had announced the intent to acquire Motorola Mobility, another acquisition in the UC/contact center space emerged - Nuance made their next acquisition of the year by announcing their intent to acquire Loquendo - a wholly-owned subsidiary of Telecom Italia, for roughly $75M.  I was and wasn’t surprised by this move at all. After all, Nuance has been on an acquisition bender for years, but it still had my eyes open wide for moment, before turning to check out the Google Motorola announcement.

At first blush, what this acquisition gives Nuance is a lot. Loquendo, known for its wide variety of languages and text-to-speech voices (32 languages and 76 voices) is one of the biggest alternatives to Nuance in the realm of speech technologies.  By acquiring Loquendo, Nuance expands the company’s technology portfolio (with some overlap such as the core recognizers, biometrics, etc.), and gains a bigger geographic reach and presence, including support for more Latin languages.

To take from the Nuance press release, “Nuance intends to expand its operations and accelerate growth in four key areas:

Advanced Voice Solutions for New and Emerging Markets - Nuance and Loquendo’s combined technologies will advance groundbreaking voice capabilities through robust TTS, ASR and voice biometrics offerings - broadening Nuance’s global footprint especially in Europe and Latin America.

Strong Global Customer and Partner Relationships - The acquisition provides Nuance’s and Loquendo’s customers and partners access to the industry’s largest and most experienced voice and language portfolio. Loquendo’s technical expertise and talent, combined with Nuance’s global R&D resources and market strength, will accelerate a robust product and services roadmap to deliver state-of-the-art solutions for customers and partners.

Robust Language Support - Loquendo has strong proficiency in Latin languages, providing Nuance the broadest language support in the industry with the goal to drive natural, conversational interactions across a number of industry segments in the user’s preferred language. 

Innovation - Both companies offer sophisticated voice-enabled technologies. Together, Nuance and Loquendo will be able to accelerate innovation through a new center of excellence for speech research, based in Turin, Italy. This expands upon Nuance’s existing research and development facilities in Sunnyvale, CA, Burlington, MA, Aachen, Germany, Merelbeke, Belgium, Zurich, Switzerland and Montreal, Quebec.”

While good for Nuance, it does shrink the pool of alternatives to Nuance, which has some partners, who use more than one speech vendor, or are looking to expand to other vendors, concerned.

I thoroughly expect Nuance to have a lot in the way of announcements this fall, although it would be too early to hear about much of the impact that the Loquendo acquisition would have on their portfolio. However, one thing I’ve been talking and writing about is how formidable Nuance would be if they would get their assets in order. That is, with all the acquisitions they have done, they have a huge amount of technology to combine, and for years we have seen bits and pieces come out in new releases in different divisions, but not one cohesive R&D plan as to how they can cross utilize all of their different assets.  Nuance has a self-service/contact center division, a mobility division, healthcare specialty, dictation and imaging products, and others, but we really have yet to see one cohesive set of cross-indexed/developed products, with combined reporting, analytics and development tools.  OK, am I dreaming here?

One of Nuance’s competitors in speech, Microsoft, has the same issue; lots and lots of technology in different areas, and the capabilities to draw from one area and apply it to another. Cisco does as well — think Cisco’s investment in video technology, and their ability to apply that in areas from pure Telepresence, to UC, collaboration and the contact center. Microsoft has the same breadth of technology to draw from, and the more they can draw from one area and apply it to another,  the more formidable a competitor they become. 

Along those lines,  in a Microsoft tech blog this week it discussed the fact that Microsoft has taken the Microsoft Tellme speech assets and applied them to Xbox Kinect and Windows Phone for command and control - interesting stuff and fun video at the end. If Nuance can start to combine all of the assets they have, from an R&D perspective, and bring them to bear on all of the areas that they have a presence in - mobility, contact center, healthcare, etc., then the more formidable they become, and that has to be pretty scary for those remaining vendors still out there.

Back to business - One thing that the Google and Nuance announcements had in common was the acquisition of patents. Patents are like gold in tech. Well, half the time. You are either profiting from them or defending them. With Google, they recently lost out on the bidding war to acquire the patent assets of Nortel, which numbered in the thousands. They struck gold with the Motorola acquisition, as they are acquiring in excess of 17K patents.  

With Nuance it is the same thing. Loquendo brings a lot of patents to the party as well, and patents is something Nuance has used in the past to stave off competition with patent infringement suits. On another note, however, sometimes you eat the bear, and sometimes the bear eats you, and the later happened to Nuance this month when they lost their legal battle with Vlingo. Vlingo successfully defended against 30 patent infringement charges, when a jury in Federal District Court in Boston found that Vlingo did not infringe on U.S. Patent No 6,766,295 (the ‘295 Patent) entitled “Adaptation of a Speech Recognition System across Multiple Remote Sessions with a Speaker” .  Additionally, all claims in ‘295 patent have been found invalid by the United States Patent and Trademark Office (PTO) in a reexamination proceeding

However, we know who the real winners were in that battle - the lawyers $$$$$$$$.

Tags: Collaboration, Contact Center, Speech Technologies, Video //