Larry Miller, CEO and President, TuVox
Q. TuVox recently announced an 800 percent increase in revenue over the past fiscal year, could you elaborate on the factors surrounding this increase?
A. There are three key factors that have contributed to our growth. The first factor is our technology. TuVox was founded with the mission to make sophisticated speech self service accessible to more enterprises by delivering technology that enables rapid, affordable deployment of speech applications. The unique capabilities of TuVox's patent-pending enterprise software technology allow us to deliver more applications faster and with significantly fewer professional services and customer resources. There is nothing else like it in the market today.
The second key factor is the experience and expertise of our team. Across the board, from engineering to professional services to sales and support, we are fortunate to have people with extensive experience in the areas of voice self-service, speech application design, computational linguistics, call centers and IVR. This has proven to be an invaluable asset in our ability to build and deliver industry-leading technology, and provide consultative support to our customers, from ROI analysis to application design, delivery, tuning and support. In fact, when our customers talk about TuVox, they talk about our people first.
The third key factor is our partners. We have been fortunate to establish highly productive, mutually beneficial partnerships with a select group of leaders in the speech industry. Working closely with companies like Convergys, Genesys, ScanSoft and Versacape, we have been able to deliver tremendous value to our joint customers. We expect to continue to capitalize on our existing partnerships, and will likely expand our list of partners in the future.
Q. What do you think TuVox's revenue numbers represent in regard to the market acceptance of speech technology?
A. I believe our momentum over the past year is proof that the market is embracing a better approach to customer self service. Despite the success of Web-based self service, the reality is that 85 percent of customer contact still happens by phone. Corporations are realizing more than ever that their call center is an extension of their brand, so the ubiquitous and frustrating "touchtone maze" must be replaced by a much more user-friendly interface.
If you are going to ask customers to use self service through automation, it is critical to make the experience as intuitive and easy as using a bank ATM. Historically, it's been prohibitively expensive and time-consuming to develop a desirable self-service experience by phone. Providing sub-standard "Press or say 1…" voice self-service applications has been a key inhibitor to caller adoption. We're changing all that. We have made the caller experience the key priority, making sure the technology is in place to quickly and easily tune and update the applications to optimize caller satisfaction. In fact, caller satisfaction will drive higher automation rates and higher ROI. If the caller has an enjoyable experience and can get their questions answered using voice self service, they'll be more prone to use it again on the next call.
We've raised the bar in what it means to deliver a superior caller experience with speech applications and are helping companies deploy them in 60 to 90 days. Our customers are realizing that speech automation is more than a means to reduce costs…it's a way to establish competitive advantage.
Q. How rapidly do you expect the industry to grow and expand in 2005? Are there any market trends that you foresee for the speech industry in 2005?
A. We predict moderate industry growth in 2005, but expect a significant increase over the next 3-5 years. One of the biggest challenges many companies will face is caller adoption. Most people expect to be frustrated with voice self service and instinctively "zero-out" to a live agent. That paradigm will take some time to overcome. As more sophisticated applications are delivered into the market, consumers will become more comfortable with voice self-service applications, and caller adoption will increase.
When ATM machines were first introduced, banks had to provide incentives for customers to use them. Now we see kiosk-based self-service technology everywhere. First it was ATMs, and then self-service gas pumps, and most recently we've seen that most people are using the new airport kiosks without ever interacting with a ticket agent. Adoption rates for these technologies are high because they provide an effective user-friendly self-service experience.
It's been possible to deliver sophisticated, user-friendly speech applications for some time, but these applications took months (or years) and cost several million dollars to create. And because they were based on developing custom applications on top of proprietary IVR platform technology, making changes quickly to adapt to new business requirements was virtually impossible. Many vendors in the space have tried to address this by delivering so-called Packaged Applications. While these packaged apps may fit well in a very narrowly defined environment, they require extensive customization in most enterprise-class environments. I don't believe packaged apps are viable as a long-term solution for this market.
From a technology standpoint, we expect to see companies shift their purchase decisions from buying platform technology to buying application software. After all, the business solution is the application. As enterprise-level speech application software becomes more available, reliance on custom application deployments and dependence on expensive professional services resources will be dramatically reduced, thus making sophisticated, high-value speech applications more affordable for enterprises. The underlying platform components are enabling technologies that should be evaluated based on price and performance.
This evolution from expensive, custom-coded applications to enterprise application software products is the normal course for any software industry. We've seen it happen with other industries, such as ERP and CRM. I believe the speech industry is finally poised (and overdue) for this transition.
Q. What is Tuvox doing to maintain or surpass this increase for the next fiscal year?
A. In 2005, we will continue to grow at a very rapid rate due to the market's excitement around the speed and ease of deployment of sophisticated enterprise speech applications that TuVox provides. (Our first quarter of 2005, which ended in January, was another record for TuVox.) There are also a number of key strategies underway at TuVox that will facilitate our accelerated growth rate. Our recent $15 million round of financing will be used to fund this growth in the following areas:
First, we are accelerating our investment in sales and marketing. We are expanding our direct sales presence in North America and increasing our investment in our partnership program. As the enterprise application solution provider, TuVox must leverage its consultative sales and delivery resources to assure that every one of our customers' projects are successful. It is also critical that we simplify the buying process for our customers by investing in our partnerships with other key technology vendors, thus providing them with a single point of contact for the design, deployment and ongoing support of their speech applications. In addition, we further simplify the purchase decision by providing enterprises the option to deploy TuVox speech applications using our hosted and managed OnDemand solution, or to deploy in-house through our standard software licensing option. We have noticed that many enterprises prefer the flexibility of pay-per-usage model that TuVox OnDemand provides.
Second, we are launching our international operations this quarter. We are in the final stages of bringing our international team on board and establishing key partnerships to support our go-to-market strategy. We are already engaged in a number of customer opportunities in the EMEA and Asia/Pacific regions. Expect to hear announcements of our first international customer deployments very soon.
Finally, we are increasing our investment in product development. Our recent funding has enabled us to accelerate our product roadmap timeline. We will be announcing new product releases with significant enhancements of the TuVox Application Lifecycle Management tools and components. In addition, we will be delivering more new horizontal and vertical application products, to complement our existing portfolio of applications, such as our award-winning TuVox Perfect Router product.
Q. TuVox released seven new products last year, are there plans to continue producing at this momentum? Are there any new releases in the near future?
A. A key component to our success last year was our continued investment in innovation - admittedly in 2004 we maintained a torrid pace on the product side.
As I mentioned earlier, we plan to not only maintain this pace, but accelerate it in 2005 by introducing a number of new product releases and pre-built speech applications, including several industry applications such as telecommunications and retail.
Over the next few weeks we will be making several key announcements around new product releases, starting with our Release 5.0 announcement scheduled for later this quarter.
Q. Please discuss a couple of examples of recent deployments and explain why your client was interested in speech and the results from the deployments.
A. Enterprises like Activision, a top video games publisher, are delivering 24/7 game support, 365 days a year using TuVox's conversational speech applications. Whether the caller needs help installing a new game or wants information on hints and cheats, the TuVox speech application proposes a resolution to the caller's issues without tying up an expensive agent resource. Working with TuVox, Activision has seen numerous benefits: Call automation has increased nearly 25 percent over their previous IVR application to 62 percent with TuVox. Customer satisfaction has increased as the company is now providing 24/7 support and many customers prefer the efficient self-service customer support. Using the TuVox Perfect Connect application product, agent productivity and call resolution time have both improved as there is now a seamless transition from the TuVox self-service application to the agent, and back again. The agents can now focus on fewer and more complex customer service calls.
Other examples include several of our retail customers like Columbia House, Oriental Trading Company and AmeriMark, where TuVox speech applications are being used to do a wide range of self-service functions, from purchase or return products, to make a payment or check order status. At Columbia House the TuVox "Make Payment" application was deployed in six weeks, and has automated over 90 percent of the calls.
Q. Speaking of the future, can you give us a glimpse of your thoughts for the future of speech and its role in the basic, daily functions of consumers' lives?
A. We expect speech self-service technology to follow the same trajectory as ATMs and other self-service technologies. If you can build and deliver a better speech application, the consumer adoption will follow. Make it simple, intuitive, and effective for consumers to use, and make it easier and more affordable to deploy and update for the enterprise buyer, and this market will boom.
As the quality and affordability of speech self service improves, these applications will become as ubiquitous as ATMs and touchtone IVRs are today. Consumers will be able to use speech applications not only to get to the right agent or self-service application much quicker, but to leverage the speech application for a much wider range of calls such as product support, HR and transaction issues. For example, the 850,000 employees and retirees of the Unites States Postal service are using TuVox speech applications for HR related issues like insurance eligibility, vacation balance, etc. Also speech applications will liberate consumers from having to use the phone keypad to enter their information. Instead, consumers can get to hundreds of destinations and resolve their issues within seconds by simply speaking to the speech application as if they were speaking to a live agent.
Consumers will view companies that don't routinely provide speech self service as sub-standard. It will be akin to not having a corporate Web site. Speech will not only be a competitive advantage for companies, it will become a competitive necessity.
Q. Are there any thoughts that you would like to add?
A. From the very beginning, TuVox set out change the way companies think about, deploy and use speech self service in their enterprise. The approach of speech-enabling IVR applications ("Press or say…1", "Speak or enter your account number now…" etc.) is inherently flawed. Since its inception, TuVox has been focused on developing and delivering technology that would replicate the conversation between a caller and a live agent. Although we view this as a long-term journey, we believe that TuVox is already delivering on this vision, and we will continue to invest in delivering new and unique technology.
We are just beginning to see the impact that our technology is having on caller adoption and the resulting business benefits for our customers. I expect our customers' success to continue to fuel our growth through a growing number of new voice self-service applications with both new and existing TuVox customers. I see a very bright and exciting future for TuVox and for the speech industry overall in the months and years ahead. Thanks for taking the time to hear about TuVox.