The supply-side market for voice business technologies and services was worth $629 million at year-end 2001, a decline of 3% from 2000. However, Independent market analysis firm Datamonitor (DTM.L) expects the voice business market to return to positive growth during the second half of 2002 and grow quickly through 2007. At this time, the whole market (including platforms, enabling software, applications, and services) will be worth US$4.33bn.
According to the Datamonitor report, Voice Portals and Applications, the silver lining of this delay has been a transformation of the speech recognition industry.
Vendors have been forced to apply their technologies towards solving actual business needs, said Benjamin Farmer, Datamonitor voice business analyst. As a result, many vendors have been able to demonstrate return on investment (ROI) to enterprises and service providers through voice solutions.
Service Providers vs. Enterprises
According to Datamonitor estimates, one-quarter of the Fortune 500 had invested in voice business in 2001, up from 12% in 2000.
Currently, the greatest opportunity for voice technology vendors is customer-facing enterprise applications. These applications have a proven ability to cut costs, and ROIs are the order of the day during current IT budget shrinkage.
Currently the service provider market is suffering from the generalized telco malaise, and less proven application business cases. This will change in 2003-4, however, as service provider voice portals and applications will become the greater growth opportunity. This change will depend on first, the service provider investment environment, and second, on the acceptance and success of earlier applications. According to Datamonitor, uptake in the service provider market will benefit the enterprise market in later years by exposing consumers to voice technologies.
Vertical markets – Financial services drives voice business however Healthcare & Pharma to grow over 10% faster than any other sector
Financial services, an early adopter of voice solutions, continues to drive voice business and often serves as a proving ground for emerging advanced speech applications. Within financial services there are several unique opportunities. For example, the retail banking and investments/securities verticals are introducing speech technology to the masses, and will remain the largest markets for voice services. However, insurance companies, commonly slower to integrate new technologies, will grow in importance, initially implementing account management automation, and later introducing productivity applications including sales force automation.
Healthcare & Pharma, while small now, is an exciting market for voice business. Over the next five years it will outpace the overall market as hospitals seek to decrease administrative costs by automating applicant screening for studies, directory information, reservations, and physician paperwork. Vendors should also look to build upon existing CRM relationships with Pharma companies through voice-enabled Sales Force Automation (SFA) applications. According to Datamonitor, these opportunities will enable Healthcare & Pharma to grow more than 10% faster than any other vertical market over the next five years.
Call center automation represents 44% of supply-side revenues
In this report Datamonitor covers nine application categories. The largest of these is call center automation, which represents 44% of supply-side revenues. Large call centers are the primary customers, however, as the price of licenses decreases in the long term, small and medium-sized call centers will increasingly become a valuable market. In addition, communications and transactions applications have great growth potential. Beginning in 2004, sustained above-average growth, fuelled by advanced speech technologies, will increase the percentage of annual supply-side revenues garnered by these categories by five percentage points each over the next five years.
There are a number of exciting developments in the speech recognition industry. Deployments are on the rise, revenues will soon return to positive growth, and the industry is ready to solve many business needs. Notably, a number of large technology vendors, including Oracle (ORCL), Sun (SUNW), and Microsoft (MSFT) have increased their presence in this space. While this has caused some concern among voice vendors, it nevertheless represents significant opportunities for the market, concludes Farmer.