The Battle for Partner Share
As the second half of 2004 unreels we will be watching a metric that is proving to be very important indeed. We call it partner share. We can define this as the amount of an ecosystem that is involved with your product. In the case of speech, this could include system integrators, related software including CTI or digital recording, as well as independent software vendors of CRM and B2E applications. Like market share or mind share, you probably can’t have too much partner share – it’s a very good thing. As the market starts to accelerate, which seems to be the case from the activity solutions-vendors are reporting, hiring sales reps can’t capture all the opportunity – that’s why partners are so key. That’s why your company should battle for partner share – not just invite them.
A stunning example of how vital the partner strategy is comes to us from the first six months of this year in the world of automated directory assistance. Assuming we can all get behind speech-enabling an application that generates in excess of five billion calls annually, the ADA market in the United States went from hibernation to hyperstimulation in six months. As 2003 came to a close, the only three major stories were BellSouth using ScanSoft, Verizon working with Tellme and Nuance with another win at Sprint Local. The companies just mentioned include the No. 1 and No. 2 general-purpose speech recognition vendors in terms of market share, while Tellme is the largest pure-play hosted speech provider in the />United States . Phonetic Systems, on the other hand, has had a strong focus on ADA since its inception in the late 1990s – and not a single United States carrier customer to show for it. What Phonetic had been doing throughout 2003 was aggressively marketing and integrating its technology with every DA platform vendor of merit – a list that includes IBM, ISx, Nortel, Telcordia and Volt Delta. What happened next is pure magic. Perhaps spurred by the herd mentality that seems to affect carriers, the first half of 2004 turned out to be a major fire drill for fixed-line ADA contracts. The list reads like an RFP-dream-come-true, which it was: Bell Canada , Excell Agent Services (which handles ATandT), Qwest, SBC, SNET, and Telus, in addition to at least one very large unnamed customer. Of that list, Phonetic beat Nuance and ScanSoft in five out of six deals. What’s even more impressive is how it beat out the top dogs – with four different partners: Nortel, Soleo, Telcordia and Volt (two wins). The actual number of partners it bid with is of course bigger, since it is common practice to be in several platform bids for the same ADA RFP.
The DA space may be a little unusual in that platform vendors will use whatever recognizer the carrier wants, given the size of the business. But Phonetic Systems is a great example of partnering aggressively to make sure that when the customer exercises that freedom of choice, the APIs and the integration are in place to respond. As a result, Phonetic has leapfrogged to the top of the heap in its chosen domain of ADA . Another example of aggressive partnering is Genesys Labs. With one foot in the CTI space, and via its acquisition of Telera, one foot in the speech platform space, Genesys has put itself in the enviable position of being able to surround arch-competitor Cisco in the CTI space by moving its Genesys Voice Platform up into Cisco ICM accounts – so even if it doesn’t get the CTI business, it gets the voice piece. But more importantly, it is executing a “gorilla ISV/SI” strategy that calls for closely coupled partnerships with Tier I ISVs like SAP, PeopleSoft and Siebel, as well as Tier I system integrators such as IBM BCS – a $13 billion business unit. Relentless in such things, Genesys took the next step with IBM and using MRCP protocol as a wedge, has embraced the IBM voice technology within its GVP platform, as well as opening up the market-leading share of application servers that IBM WebSphere commands and tapping into the treasure chest of the WebSphere Portal customer base to enable enterprise voice portals.
Read that last sentence again: Relentless in such things, Genesys took the next step with IBM and using MRCP protocol as a wedge, has embraced the IBM voice technology within its GVP platform, as well as opening up the market-leading share of application servers that IBM WebSphere commands and tapping into the treasure chest of the WebSphere Portal customer base to enable enterprise voice portals.
Therein lies the power of partnering. While we continue to see consolidation within the traditional speech “industry” – such as the emergence of Acapela (a combination of European speech plays Elan, Babel and Infovox) – it is the cross-pollination of CTI, SIs, ISVs and application server companies that are going to drive market acceleration. Translation: hey, if you think voice portal is a dirty word, you’re living in the past. To the larger IT community, which spends a lot of time buffing its Extranet and Intranet portal assets, speech-enablement of B2E and B2C apps makes a lot of sense. And, to the Genesys “gorilla” strategy, it takes an app server and an ISV-savvy SI to get there. Notice something else here; we haven’t used the “V” term – as in VUI – at all in this column. Not to say it isn’t important, but part of putting together an intelligent partnering strategy is to recognize what is truly defensible and what is temporary. Holding on to VUI expertise as a differentiator is a losing proposition – in this day and age, nobody could seriously build a business model on Web design expertise, right? That day is coming sooner than we may think, which makes designing a durable partner strategy all the more important.
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Mark Plakias is a partner and senior consultant for The Zelos Group. He can be reached at 212.366.0895.