Nip/tuck in the IVR Industry: The Changing Face of Platforms

NEW YORK - In a new report, "The Definitive Guide to the IVR Marketplace: North America and EMEA," independent market analyst Datamonitor expects revenues from proprietary touchtone IVR in North America, Europe, the Middle East and Africa (EMEA) to decrease by more than 35 percent through 2009 as a growing number of businesses are opting to invest in emerging open-standard IVR platforms, such as Voice-XML and SALT, to better leverage Web infrastructure, improve functionality and potentially graduate to speech technology to further improve routing, transactions and self-service capabilities. According to Datamonitor, spend on traditional IVR licenses will dip from $277 million to $179 million in North America and EMEA by 2009. 

Spend on open-standards IVR licenses will grow from $166 million to $332 million in North America and EMEA by 2009

Traditional IVR is based on proprietary languages. As such, maintenance, upgrades and back-end data integration is expensive, complex and causes vendor lock-in.

"The emergence of open-standards is a natural evolution for the IVR and will drastically improve the functionality and availability of higher quality phone-based applications in the market," says Daniel Hong, voice business analyst at Datamonitor and author of the study. "In addition, open-standards IVR platforms liberate businesses from vendor lock-in and enable application portability to other similar open-standards platforms."

Some IVR platform vendors in North America and EMEA include: Aspect, Avaya, Cisco, Comverse, Edify, Envox, Genesys, HP, IBM, Intervoice, Microsoft, Nortel, Nuance, Syntellect, Unisys and VoiceGenie. All these vendors offer open-standards based platforms and have implemented IVR systems for companies such as BellSouth, Verizon, MCI, Qwest, United Airlines, Continental Airlines, CIBC Oppenheimer, Bank of America, Wachovia Securities, Dell, Oracle and Kodak.     

Datamonitor expects North American and EMEA businesses spend in open-standards IVR platforms to double in the next five years to over $330 million. Between 2005 and 2009, average annual spend on speech-enabled IVR in the US and EMEA markets will increase by 13.4 percent.

Although, at the core, Voice-XML and SALT enable voice user interface and speech application design, many businesses today are deploying these open-standards IVR platforms with touchtone rather than speech and still leveraging the benefits of open-standards and Web development capabilities.

However through the next five years, as they become more familiar with Voice-XML and SALT, Datamonitor is confident many will choose to speech-enable their Voice-XML or SALT IVR platforms and deploy speech applications.

"Businesses are making more informed decisions on the strategic direction of their IT investments," says Hong. "To this end, a large number are employing a cap-growth strategy when it comes to IVR and speech technology. These businesses are likely to roll-out speech in small deployments to mitigate risk while forming best practices through 2009. The challenge for these progressive businesses making the transition to speech is firmly rooted in the complex nature and high costs associated with speech application design and implementation."
 
However, in Datamonitor's view, the next five years will witness a sharp spike in the availability of intuitive toolsets, reusable components and packaged speech applications that will drive the uptake in speech-enabled, open-standard IVR platforms.