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Microsoft Teams Up with 24/7 on Customer Service Software
Deal includes further development of Tellme speech recognition software; 24/7 also confirms its acquisition of Voxify.
Posted Feb 7, 2012
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Microsoft and 24/7 today announced a research and development partnership that includes 24/7’s use of Microsoft Tellme speech and natural language technologies for natural user experiences in customer service. The 24/7-Microsoft agreement includes Microsoft merging its interactive self-service assets (clients, people, and technologies) into 24/7. Microsoft also said it is also taking an equity stake in the company.

24/7 also confirmed the acquisition of Voxify, which was made last November but was not publicly announced.

"It was a very quiet acquisition. We did not do a press release for many reasons, such as we were in very deep discussions with Microsoft," says Kathy Juve, chief marketing officer at 24/7. "Voxify has been operating under us since then. John Gengarella, the former CEO, remains as our chief revenue officer; Patrick Nguyen, the co-founder of Voxify, is our new chief technology officer, and the vast majority of employees remained onboard, as did the customers."  

Microsoft and 24/7 have also agreed to a shared technology road map and a long-term intellectual property licensing agreement that provides broad coverage under Microsoft's patent portfolio for speech-related technologies. With the agreement, Microsoft and 24/7 are combining technologies that span interactive self-service across mobile, Web, and voice channels, big data analytics, and speech and conversational interfaces to create a next-generation cloud platform for customer service. 24/7 said it plans to integrate its solutions with Windows Phone, Bing, and Microsoft Dynamics CRM.

"We're excited about this because both companies see search as a key jumping-off point for customer service, and with us taking Bing across the screen it's going to be great to be able to take that from just showing blue links for people who want customer service to actually being able to pull them to the right customer service experience," says Ilya Bukshteyn, senior director of Microsoft's Online Services Division.

When Microsoft acquired Tellme five years ago it acquired two key areas of assets, says Bukshteyn. One was a cloud platform for speech solutions, and Microsoft combined that with work that the company had already been doing around a speech engine. Since the acquisition, the company has used the technology in products such as Windows Phone, Bing Mobile, Ford's Sync in-car infotainment system, and Xbox Connect. The other asset that was part of Tellme was IVR, which was very complimentary with the speech platform, Bukshteyn says.

"Now what we've seen in the last year is a little bit of divergence in those businesses," he says. "What we're hearing from IVR customers is really much more of a focus on the changes going on more broadly in customer service rather than just narrowly in IVR. We're really seeing a lot of pressures on customer service, whether it's the impact of social media as a channel, whether it's connective mobile devices, all the different channels consumers are using these days, even the TV moving forward. We think of that trend as more natural user interfaces across all devices for customer service."

The other big trend, says Bukshteyn, is being able to predict what the consumer wants by using machine learning and analytics, or what's referred to as big data and applying that across all channels.

"When you combine those two trends, we came to believe in the last year that customer service as an industry was at an inflection point," Bukshteyn says. "It was ready to move from the current fragmented state, where businesses are on their own to deploy different point solutions for different channels and try to stitch them together. We felt the first company to offer a true end-to-end customer service cloud solution would be very disruptive in this market; we found 24/7 when it acquired Voxify, which was one of our leading partners in the IVR space. We found that 24/7 had extremely complimentary assets. We felt like the combination of our IVR assets and their big data focus would be unique in the industry and very compelling."

Dan Miller, senior analyst at Opus Research, sees the companies as a good fit. "The combination of Microsoft/Tellme, 24/7 Customer, and Voxify exposes a new terrain for future competition in multimodal self-service and customer care," he says. "Microsoft finds a home for Tellme that brings together investment that both 24/7 and Voxify have made in predictive experience along with Tellme's legacy in accurate IVR, as well as its customer base."

In the last four to five years, 24/7 has invested very heavily in its predictive experience platform that allows for intuitive software-led customer experience interactions online, according to Juve.

"Our experience previously had been on focusing on our large enterprise customers, in industries including financial services, airlines, technology companies, to improve their ability by leveraging our cloud-based predictive experience platform to service their customers online," Juve says. "We saw a real opportunity in the last year when our customers were coming to us and saying they'd like to replicate this in the IVR and other channels. We noticed that there really wasn't a solution that was a single software platform, particularly one in the cloud which was low effort to implement, that shared the same back end, the same database, and big data for customer interaction. We decided that it would be great to combine the capabilities with speech to our platform so that we could allow our enterprise customers to serve their customers across multiple channels using single software." 

The companies said that the combined Predictive Experience (PX) platform will manage more than 2.5 billion speech and online self-service interactions annually. With this combination, 24/7 will be positioned to generate total revenues of more than $250 million annually by delivering solutions and services that enable large businesses to anticipate consumer needs, simplify the consumer experience, and learn from every consumer interaction.

"The way we're working with our customers is that we package these solutions in what we call dedicated applications for specific journeys, such as fraud alert," Juve explains. "There's also first-month bill shock for new users of a service, which drives a lot of calls in the call center. Our technology can predict this, and if somebody's calling within a first month usage they can go online and the system can predict and intervene and ask specific questions about your issue.

"In many ways customer service is still somewhat caught in the Dark Ages as related to technology. The market is very disconnected between consumer's personal interaction with technology, whether it's online or mobile phones. We're trying to bring these pieces together, the big data element with the natural user interface element that comes from our news today, along with machine learning, the ability for our system to continuously learn interactions across any device, whether it's mobile or online, to provide a better consumer experience. And since this is in the cloud, there are significant center savings."

Companies that are already working with Microsoft and 24/7 include Avis Budget Group, Capital One, and United Airlines.

"Microsoft and 24/7 share their passion for consumers," Bukshteyn says. "Today it's becoming quickly natural for us as individuals to speak to a device the way we would speak to a friend. There’s no reason why customer service can’t be as natural, both in terms of the experience, the interaction, and in terms of how well a business can anticipate what you're trying to do. This agreement is about enabling that predictive experience with the combinations of assets between the two companies."


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