Datamonitor Analysts Daniel Hong and Peter Ryan

Q. What are the key geographic growth markets in EMEA and APAC, and which factors are pushing this uptake in voice?
A. In EMEA, the key markets that are set to grow include />Italy and Spain .  All three have growing consumer bases, and mobile telephony penetration is extremely high in each. In fact, Datamonitor expects that by 2008, speech automation revenues will have grown from $28 million this year to $86 million by 2008 in Spain and from $33 million in 2004 to $98 million by 2008 in Italy .  It is interesting to note that in each of these countries there have been very popular deployments that have reached large numbers of consumers.  An excellent example of this was the speech-automated portal for Real Madrid football club, which provided soccer fans with the ability to access club information on schedules, statistics and even provided ticketing automation. 

It is real life examples such as these that not only show investors that speech solutions have excellent potential for reducing overhead costs, but it proves to consumers that this technology is reliable, safe and easy-to-use.

From the standpoint of APAC, the most mature but perhaps the most dynamic speech market, is that of Australia / New Zealand .  Datamonitor expects growth in speech self-service in this region to expand from $27 million in 2004 to nearly $100 million by 2008.  While this market is relatively small compared to its Chinese and Japanese neighbors, its end-user acceptance of speech technology is phenomenal.  Not only have traditional enterprises such as telcos and financial services deployed speech as a customer-facing tool, but also now consumers can use voice interfaces to order taxis, buy a pizza or place a bet at the local bookie shop.

Q. How will voice adoption be affected in areas of multiple languages/dialects?
A. While concerns around dialects have been prevalent in the past, voice technology vendors are overcoming such fears due to a number of proactive measures.

For one, global players are partnering with local universities and systems integrators in order to develop reliable engines around tongues with regional variances.  This is especially the case in places such as India and China , where not only languages are diverse, but the consumer class is growing at a rapid rate. 

Another measure that some enterprises dealing in such markets are looking at is basing their services on one or two widely spoken language engines, thus forcing consumers to choose the one most appropriate for them.  In India, for example, voice portals may be automated in Hindi and Indian-English, while across China voice services may be automated in Cantonese and Mandarin.

Q. Can voice compete against low-wage call center economies like South Africa, India and Eastern Europe ?
A. Currently, a US-based business with a call center in an offshore location, like India , saves approximately 25 percent to 35 percent per transaction, in comparison to a transaction handled in a US-based call center. A call serviced through speech automation costs approximately 15 percent to 25 percent of the cost of a call handled by an agent in India . Therefore, a transaction handled by a speech-enabled solution presents a highly cost-effective approach for transactions in the call center. However, voice services do not have to compete with call centers in low-wage economies!  The good news is that businesses currently looking to offshore can use both in conjunction.  Essentially, all routine services such as call steering and basic information provision can be handled by voice services, thus lowering variable costs in the form of labor and facilities for businesses.  For higher value-calls including cross-sell and up-sell opportunities, live agents can be used in offshore locations. Once end-users become more comfortable with voice services, enterprises can further move them away from agents, toward commercial applications, such as transactions.

  Looking past 2008, Datamonitor expects that speech will provide an alternative for businesses looking to expand call centers offshore. At this point, end-users will be more seasoned with using voice applications and voice applications and design will have only gotten better.      

Q. What are the key geographic growth markets in NA and CALA, and which factors are pushing this uptake in voice?

A. In NA, investment in speech has been on the rise in the past couple years. In 2003, spending on speech technology reached nearly $400 million. Datamonitor expects spending to grow to just over $480 million in 2004, representing a 26 percent year-on-year growth rate. Both countries that make up NA, the US and Canada , are expected to show strong voice business growth due to the increasing market awareness and the emergence of new verticals adopting speech solutions.   Voice business investment in CALA has been limited due to political instability, escalating foreign and domestic debt, and currency devaluation. IVR deployments in this region are almost all DTMF-based and the leap to speech has not been widespread. The majority of speech deployments are found among service providers that provide enhanced telecom services for their subscribers. However, speech will gain greater momentum with the growing call center market and increased familiarity of the technology among CALA residents. At this time, Brazil and Mexico are the two largest voice business markets in CALA. Other upcoming countries include: Chile, Argentina, Venezuela, Colombia, Puerto Rico and the Dominican Republic       Q. What vertical markets will experience significant growth in 2005? Why? A. Globally, Datamonitor expects continued pickup in the early adopter vertical markets such as financial services, communications and outsourcing bureaus. There will also be significant growth in the emerging retail, healthcare and utilities verticals in 2005. Driving this growth will be cost reduction and customer service improvement. In addition, as businesses continue to revisit and change their operating models to sustain competitive advantages in the marketplace, they are beginning to see the incremental value speech provides in improving business processes. This will also help drive investment in speech through 2008. At this time there are a large number of pilots and upcoming deployments in both the early adopter and emerging verticals. For more information please refer to Datamonitor reports "Voice Business in Regional Perspective: The Americas" and "Voice Business in Regional Perspective: EMEA and APAC".