Bumpy start for Microsoft's Speech Server

One year after Microsoft Chairman and Chief Software Architect Bill Gates unveiled Speech Server 2004, Microsoft says it is happy with adoption of its first speech recognition server. Some Microsoft partners who sell the product, however, say it has had a bit of a false start.

When Microsoft proclaimed it would bring speech recognition to the masses, Gary Hannah, president and chief executive officer (CEO) of speech specialist Pronexus Inc., set ambitious goals for his company. He established a separate Speech Server division and "bet a significant part of the farm" on the new Microsoft product.

But when the Ottawa-based company closes its books on March 31, revenue for Pronexus' Speech Server business is set to come in at about a third of what it budgeted last year, Hannah said. "It is slower than we'd like," he said. He blamed a marketing effort by Microsoft that was weaker than he expected.

With Speech Server 2004 Microsoft promises speech recognition for the masses by making it available at lower cost and making it easier to deploy, manage, develop and maintain than competing products. Developers can add speech capabilities to existing Web applications based on Microsoft's ASP (active server pages) application framework by adding code based on XML (Extensible Markup Language) and SALT (Speech Application Language Tags) technologies. SALT competes with the VoiceXML standard.

Since its introduction by Gates in March last year, Speech Server has had to deal with some setbacks. The product shipped in July, a month later than planned, and JetBlue Airways Corp., one of Microsoft's banner customers, dropped Speech Server for an alternative just as the product launched.

"JetBlue is no longer implementing Speech Server," said Ryan Plant, a software architect at JetBlue. "We have a long-standing relationship with AumTech (Inc.), which has provided hosted speech solutions for us in the past, and essentially they were selected to continue working on speech-related initiatives for JetBlue."

Also, Pronexus and other Microsoft partners discovered that mostly large businesses, rather than the small and medium-size businesses that they say Microsoft initially targeted, are interested in Speech Server. That has forced the partners, both system integrators and resellers, to change their marketing strategy.

Intervoice Inc., another Microsoft partner, has also seen its target market for the speech product shift to large companies. The Dallas company in January realized that it was targeting the wrong market with Speech Server and is shifting its marketing strategy to target larger organizations beginning in March, said Michael Segura, director of Microsoft strategy and products at Intervoice.

"I think (Microsoft's) target market is substantially different from what they had originally forecasted," said Michael Segura, director of Microsoft strategy and products at Intervoice. He said that larger implementations were proving to be more fertile territory for both his company and Microsoft.

Intervoice is satisfied with the Speech Server business so far. "Adoption through the Intervoice channel is surprising and exceeding our expectations," Segura said.