The move is seen by industry analysts as a smart IVR play, but some say Nortel and Avaya remain the big fish.
Posted Nov 18, 2005
Intervoice signed an agreement today to purchase IVR provider Edify from S1, a move designed to strengthen Intervoice's voice-automation functionality. The acquisition, valued at $33.5 million in cash, is expected to close in December 2005. Bob Ritchey will continue as president and CEO of Intervoice, while Edify president and CEO Mitch Mandich will stay with the company through the transition period as an advisor. Over the last four fiscal quarters, the two companies have a combined revenue of approximately $200 million.
At closing, the combined company is expected to have 850 employees and roughly 5,000 customers. "We've been the most synergistic of the companies out there," says Marie Jackson, vice president of marketing for Edify. "Edify has always had a strong commitment to speech and has been very active in applications, as Intervoice has been. When you combine the two companies, there is just a leverage and strength there we didn't have in the marketplace before."
The merger will combine Intervoice's experience in development tools and standards-based applications with Edify's Web-based tools and natural language applications. Initially, Intervoice will continue to develop and support both product lines for "a substantial period of time" until the two are merged, says Ken Waln, CTO and vice president of engineering for Edify. The companies intend to preserve their customers' investments by offering an upgrade package for customers to switch to once the combined platform is introduced. "The products have enough similarities that we'll be able to integrate them easily," Waln says.
Daniel Hong, senior voice business analyst at Datamonitor, says the move is a smart one for Intervoice, which he says will acquire a good deal of technology for IVR, though not much else. "They're not going to get any PBX, CTI, or ACD from the acquisition," he says. "For those companies that are pure play IVR vendors, we expect this consolidation. This will enable Intervoice to compete more effectively in this market. They'll not only gain Edify's customers, but it will pave the road for them to upsell more applications and offer increased value to their customers."
While industry pundits agree the move makes Intervoice a firmly entrenched player in the IVR market, it still has a ways to go before competing directly with Avaya or Nortel. "This strengthens Intervoice and is an opportunity to reenergize Edify," says Donna Fluss, principal of DMG Consulting. "But keep in mind that they're competing with some very big heavyweights in this market." Hong agrees. "Like an Avaya or Aspect, those companies that offer full contact center portfolios have an advantage. This was inevitable, and was a smart purchase for Intervoice."
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