Microsoft Boosts Speech/Voice Capabilities With Tellme Buy


Terms of the deal weren't disclosed, although several online reports placed the transaction at $800 million. Microsoft declined to confirm the amount.

A privately held company, Mountain View, Calif.-based Tellme provides a hosted services platform for voice/speech recognition services for mobile phones and other devices. Companies such as American Airlines and Dominos Pizza use the Tellme service to request services and information via voice commands.

For VARs, the acquisition stands to help them to build and extend voice-, speech- and mobile search solutions based on the Tellme platform and eventually integrate that with pieces of Microsoft's highly disparate unified communications and Office applications puzzle.

"Why Tellme? Because it's the best hosted services platform for speech today," said Jeff Raikes, president of Microsoft's Business Group. "Their investments in speech recognition and voice enhance our technologies and open up to more partners and ISVs."

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Raikes said he envisions Tellme's technology enhancing what Microsoft has already done in the voice/speech and unified communications arena, though it remains to be seen how the integration of the two will pan out across the software giant's product portfolio.

Peter Pawlak, senior analyst at Directions on Microsoft, Kirkland, Wash., said the acquisition raises some questions for ISVs and other software developer partners that are already creating solutions on top of Microsoft's Speech Server product or preparing for the upcoming Office Communications Server 2007.

Microsoft's Speech Server is primarily an on-premise software solution, whereas Tellme essentially hosts its voice-related services.

"If I were in this area, I'd be paralyzed for a bit until Microsoft reveals its road map," Pawlak said. "For a partner who would build around this, you are basically in limbo mode right now while waiting for them to make this all clear."

Raikes said the details of how Tellme's technology will be incorporated into Microsoft's portfolio, and as well as its vision of software and services, will emerge within the first quarter, after the deal closes. Barring regulatory roadblocks, the acquisition is expected to be finalized in 30 days, he said.

One of the goals in buying Tellme is to get a foothold in a communications area where Microsoft doesn't play: interactive voice response (IVR), according to Raikes. Speech Server reportedly has not been robust enough for partners and ISVs to build heavy-duty enterprise IVR applications, but the Tellme platform has a proven track record there.

Lacking in Tellme is much of a global market presence. The company plays strong in North America, but to move overseas it would need to confront the globalization challenges -- and high cost -- of providing multilanguage software and support. For a voice recognition company, that's no trivial task. Microsoft, however, is notable for its work in multilanguage software and has the money to spend to globalize the Tellme solution.

Another major area where Microsoft aims to grow via the TellMe technology is mobile and wireless search. Microsoft is already in the space, butting up against Google and Yahoo, and Raikes said the TellMe deal is likely to make an impact on the Windows Mobile solutions coming out of Redmond, Wash.

Tellme has partnerships with most of the major wireless telecom carriers in North America and works with major systems integrators like Accenture.