Microsoft's Nuance, Apple's iFrankenstein Box, Rep to CX

Microsoft's Nuance, Apple's iFrankenstein Box, Rep to CX

MSFT Buys Speech Pioneer Nuance for $16 billion.

Announced today, the Nuance acquisition becomes Microsoft's second largest after LinkedIn ($27 billion) in 2016. While it's possible Nuance could be deployed in a B2C capacity, the acquisition is about B2B solutions for specific verticals, with speech processing at the center. Healthcare is the marquee one but, potentially, also "financial services, telecommunications, travel, retail and government." In 2007 Microsoft bought Tellme, another early speech-rec provider. However, the technology Nuance brings is more sophisticated: "IVR, virtual assistants, digital messaging and biometric solutions."

Our take:

  • Microsoft shuttered the B2C version of its Cortana virtual assistant last month but has integrated "her" into Office 365, Teams and other apps.
  • Nuance could provide competitive advantages across B2B product lines, using speech, voice authentication and virtual assistants.
  • Apple used Nuance for Siri. It's not clear how deeply integrated it remains. Apple now needs to license from MSFT (or buy someone).

Apple Building iFrankenstein Smart-Home Device

Apple miscalculated with the original HomePod. It cost $399, much more than Amazon Echo and Google Home devices. It also offered more limited virtual assistant functionality. Apple has discontinued it and will instead sell the $99 HomePod mini. Amazon and Google's entry level smart speakers are still less than half that price. According to Bloomberg, Apple is now working on a kind of kitchen sink smart home device that "would combine an Apple TV set-top box with a HomePod speaker and include a camera for video conferencing through a connected TV and other smart-home functions." It would also include Siri.

Our take:

  • Apple often prices its products too high, believing its brand will deliver sales. That attitude has moderated in the Tim Cook era.
  • The original HomePod should have been a smart display – an iPad or iPad Mini with a speaker. That would have justified the cost.
  • Assuming iFrank's functionality, price will be the key variable behind adoption or the failure of this new device.

Reputation Management Evolving into CX Management

Review management evolved into reputation management. That, in turn, will become customer experience (CX) management. In other words, review or reputation monitoring will be subsumed into the broader category of CX management. This is one clear conclusion to draw from last-week's announcement that Reputation (formerly had acquired Nuvi, a social listening platform. Nuvi brings more range to Reputation's existing capabilities. The company offers more precise "social listening" for brand mentions and keywords, NLP understanding of social posts and more sophisticated data analytics.

Our take:

  • Marketers jumped on the reviews bandwagon when Google said "positive ratings can improve your business' local ranking." But reviews are customer conversations.  
  • There's an analogy to call tracking, which has become "conversational intelligence." There's huge value in mining customer conversations.
  • CX is an ambiguous term but it will eat review management. Companies must look beyond "reviews" to conversations.

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