Datamonitor says the speech recognition industry will return to positive growth during Q3 2002: 18-month market delay has forced positive transformation in the industry

Citation

(2002), "Datamonitor says the speech recognition industry will return to positive growth during Q3 2002: 18-month market delay has forced positive transformation in the industry", Sensor Review, Vol. 22 No. 4. https://doi.org/10.1108/sr.2002.08722dab.009

Datamonitor says the speech recognition industry will return to positive growth during Q3 2002: 18-month market delay has forced positive transformation in the industry

Datamonitor says the speech recognition industry will return to positive growth during Q3 2002: 18-month market delay has forced positive transformation in the industry

Keyword: Speech recognition

Independent market analysis firm, Datamonitor, 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 $4.33 billion.

According to a new 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 ROI to enterprises and service providers through voice solutions."

Service providers vs enterprises

Datamonitor estimates that one-quarter of the Fortune 500 invested in voice business in 2001, up from 12 per cent in 2000. Though enterprises aren't investing much, they expect that those applications they do invest in provide an ROI in the short term. Currently, the greatest opportunity for voice technology vendors is customer-facing enterprise portals and applications. This will change in 2003-2004, however, as service provider voice portals and applications will become the greater growth opportunity. The report found that uptake in the service provider market will benefit the enterprise market in later years by exposing consumers to voice technologies.

Vertical markets

Voice Portals and Applications also examines vertical specific opportunities, covering 17 vertical markets. 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.

Applications

There are also important horizontal trends and opportunities in the nine application categories Datamonitor identifies within the speech recognition industry. The largest current market for vendors is call center automation, which represents 44 per cent 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, fueled 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 Cisco, Sun, and Microsoft have increased their presence in this space. While this has caused some concern among voice vendors, it nevertheless represents significant opportunities for the market.

To receive additional information on Datamonitor's latest in-depth report on voice business, or to speak with a Datamonitor analyst, please contact Sarah Person at 212-652-5316 or sperson@datamonitor.com

About Datamonitor's Voice Business Strategic Planning Program

Datamonitor's Voice Business Strategic Planning Program takes a critical look at the business applications of speech recognition technologies. It helps vendors understand where their revenues are now, and how to ensure they get their share of growth over the next five years. The program includes analyst support, quarterly market updates, reports, briefs, and tailored consulting services.

Web site: http://www.datamonitor.com/