The biggest player in speech recognition is just across Route 128 from the Burlington Mall. Parked in the firm's visitors lot is a Mercedes sedan that relies on its technology to allow the driver to control the navigation system and switch CDs with spoken commands.
The company is an avid acquirer of other speech-related companies - it scooped up seven last year alone. Its software enables users of Palm and BlackBerry smartphones to dictate text messages to their phones and send them without hunting for a single key.
When it comes to controlling a mobile phone, car stereo, desktop PC, or GPS device by voice alone, software from Nuance Communications Inc. is fast becoming the equivalent of Intel Inside. In terms of the breadth of its products, and the number of employees it has dedicated to speech recognition, Nuance looms over its bigger rivals, IBM Corp. and Microsoft Corp. But on the local and national tech scenes, Nuance is far from well-known.
"They've taken a fragmented industry and rolled it up into one company," says Daniel Ives, an analyst at Friedman, Billings, Ramsey & Co., alluding to CEO Paul Ricci's passion for picking up smaller speech recognition companies. (Friedman, Billings makes a market in Nuance's stock, but hasn't done any investment banking for the company.) "Speech recognition is still a green field opportunity, and I view them as the 800-pound gorilla in the space."
But if Nuance hopes to shoulder speech recognition into the mainstream - and get credit for doing so - it'll first have to grapple with marketing and technology challenges.
The technology challenge is simple: If you don't have the crystalline diction of a Julie Andrews, or you happen to be ensconced in a noisy room, trying to use a voice-driven system can be frazzling. We've all tried to explain to an airline's phone system that we're flying from Boston, not Austin, or enunciate the difference between a "v" and "b."
"People's response is invariably, 'I hate those things,' " says Walt Tetschner, president of the Concord research firm Voice Information Associates Inc. Such an attitude certainly doesn't compel consumers to invest in speech-driven technology of their own. In fact, local tech entrepreneur Paul English even created a website, GetHuman.com, that explains how to circumvent speech- and keypad-driven phone systems and talk to a human instead.
Less-than-seamless speech recognition is still holding back Nuance, and the industry as a whole. The new TomTom 920 GPS, introduced late last year, is the first sold in the United States that allows users to speak addresses rather than key them in; Nuance's software helps the $549 device decipher what you're saying.
But the unit couldn't seem to find or understand the Globe's address in Dorchester when Nuance vice president Peter Mahoney spoke to it. The Nuance software on Mahoney's desktop computer, Dragon NaturallySpeaking, also had trouble opening up a new e-mail when Mahoney asked nicely, using a wireless headset to talk to the PC.
Mahoney laughed it off, saying demos have a tendency to go awry when a reporter is in the room. He had better luck showing how his BlackBerry could pull up the latest news from the Web, simply in response to the command "Top Stories;" that service is called Nuance Voice Control.
Such demos make it clear that speech recognition feels like it is 95 percent of the way there. The last 5 percent will require a concerted campaign.
And buying new companies won't make Nuance's existing products better - that requires sustained and coordinated internal innovation.
While Ricci says that more than 600 of the company's 2,500 employees work in R&D, a former Nuance engineer says that "there just wasn't corporate-level support for internal innovation. The focus on growth through acquisition has the unfortunate consequence of shutting down the internal stuff." This engineer, who still works in speech recognition, says he knows of others who have left because of similar frustrations.
Nuance could also use an infusion of marketing mojo. Employees talk about a national TV commercial that ran last year to promote a partnership between Microsoft and Ford called "Sync." It will bring mobile-phone integration and voice control to several new Ford vehicles. In the ad, people speak commands to things that don't have voice recognition software: a man in a bathrobe orders his blinds to close before accidentally exposing himself to the neighborhood. A narrator intones, "Not everything responds to your voice like Sync.") But the ads didn't mention that Nuance provided the key technology.
The company also supplies the speech-recognition software for Google's free 411 service, 1-800-GOOG-411, "and we can't talk about that, either," Ricci says.
Both deals bring in revenue for Nuance. "We'd rather do the commerce" than get the credit for it, Ricci explains.
Ricci's personality is much more professorial than Barnum-esque, but his company needs to rethink its marketing and promotion strategy. Even he acknowledges the need for "more investment in brand-building and high-tech public relations."
Nuance executives say the company could surpass $1 billion in revenues this year for the first time, thanks in large part to the companies it acquired in 2007. (Nuance is the rare Massachusetts company making purchases rather than being purchased.)
Nuance is adding 80,000 square feet to its headquarters building. But while the company has excelled at Hoovering up smaller companies, it hasn't demonstrated great discipline in turning itself into a profit-generating machine: Nuance has been in the red for each of the last five fiscal years.
Interestingly, Mahoney once worked for PictureTel Corp., one of the pioneers of corporate video-conferencing. Like speech recognition, video-conferencing has been touted for decades as a technology that is almost about to get good enough for us to welcome it into our lives.
"I have déjà vu moments all the time - there's a lot of similarity between the two things," Mahoney says. At the Consumer Electronics Show earlier this month, he saw a video-conferencing vendor conducting the same demo Mahoney says he used to do in the late 1990s at PictureTel: two distant offices are linked together, at which point the employees begin asking one another, "How's the weather there?"
We still don't videoconference as easily or frequently as we pick up the phone or dash off an e-mail. Nuance will have to concentrate on internal innovation and better marketing if it hopes to eventually be regarded as the company that rid speech recognition of its frustration factor and made it truly useful to all of us in the mainstream.
Innovation Economy is a weekly column focusing on entrepreneurship, technology, and venture capital in New England. Scott Kirsner can be reached at kirsner@pobox.com.
