May 2005 Archives

Anyone else been wondering what's up with ScanSoft lately? Now, we have an answer. This merger will create the largest and most powerful speech technology organization in the world. Competitors, put your running shoes on. Release below.

TES

ScanSoft and Nuance to Merge, Creating Comprehensive Portfolio of Enterprise Speech Solutions and Expertise

Combined Company Poised to Accelerate Technology Innovation for Customers and Partners around the World

Acquisition Expected to be Accretive to ScanSoft Shareholders for Fiscal Year 2006

Peabody, Mass. and Menlo Park, Calif., May 9, 2005 – ScanSoft, Inc. (Nasdaq: SSFT) and Nuance Communications, Inc. (Nasdaq: NUAN) today announced that they have signed a definitive agreement whereby ScanSoft will acquire all of the outstanding common stock of Nuance, merging the two organizations into a single company with the expertise and resources required to satisfy the increasing demand for powerful speech solutions.

Under the terms of the agreement, ScanSoft will issue approximately 28 million shares of its common stock to Nuance shareholders, who will receive 0.77 shares of ScanSoft common stock for each share of Nuance common stock that they own. Additionally, each Nuance shareholder will receive $2.20 of cash per share of Nuance common stock owned. The transaction is valued at approximately $221 million based on the closing price of ScanSoft common stock of $4.46 per share on May 6, 2005, or $122 million net of Nuance’s cash and equivalents of $98.7 million on March 31, 2005, which includes $11.1 million of restricted cash.

Upon closing, ScanSoft expects to have approximately $80 million in cash and marketable securities. The transaction is expected to generate cost synergies between $25 million and $30 million per year through headcount reductions, office site consolidations and elimination of duplicate operating expenses. In ScanSoft’s fiscal year 2006, the company expects combined revenue to exceed $315 million. ScanSoft expects that the transaction will be accretive to ScanSoft shareholders for fiscal year 2006.

"Speech software is transforming the way people use digital devices and access information systems," said Paul Ricci, ScanSoft chairman and CEO. "As businesses increasingly turn to speech solutions to manage and improve customer interactions, combining our organizations creates a trusted provider of industry-defining technologies and applications. Together, we are better positioned to accelerate the development and adoption of innovative speech-enabled applications and services worldwide. We look forward to welcoming Nuance’s talented and motivated employees as we deliver on our shared vision."

Today, ScanSoft and Nuance combined automate more than 20 million contact center and directory assistance calls per day; bring the power of speech to millions of people through mobile phones, automobiles, consumer electronics and games; and provide dictation solutions for more than 3,000 hospitals and more than one million consumers worldwide. The combined company is committed to making speech-enabled systems, devices and interactions as effective and ubiquitous as the Web.

The combination of ScanSoft and Nuance brings together the industry’s most comprehensive portfolio of speech applications, technologies and expertise that will enable customers to effectively deploy innovative speech-based solutions. The combined organization will have the technical resources and intellectual property required to develop new and innovative speech solutions that deliver enhanced value to customers. With leading technology, a premier partner network and an organization dedicated to speech, the company will be able to compete more effectively in new and expanding markets and provide value for its most important stakeholders – its customers, partners, investors and employees.

"This merger brings together the customer successes, technical talents and sales and marketing competencies of both companies," said Chuck Berger, president and CEO of Nuance. "Paul and I agreed that by combining our companies, we will be in the best position to advance the emerging speech industry into stronger growth and maturity and provide superior financial results for shareholders."

In connection with this transaction and for other corporate purposes, Warburg Pincus, the global private equity firm and a leading investor in technology companies, has agreed to purchase ScanSoft common stock in separate transactions as follows:

• 3.54 million shares at a purchase price of $4.24 per share, the closing bid price on Thursday, May 5, 2005, for an aggregate investment of $15.0 million. This transaction closed today and is independent of the Nuance transaction.

• 14.2 million shares at a purchase price of $4.24 per share, for an aggregate investment of $60.0 million. This transaction will close concurrent with, and is contingent upon, the closing of the Nuance transaction.

• In addition, Warburg Pincus has acquired a warrant to purchase 0.86 million shares of ScanSoft common stock along with the first investment, and will acquire a warrant to purchase 3.18 million shares of ScanSoft common stock upon the closing of the second investment. Both warrants have an exercise price of $5.00 per share and a four-year term.

William H. Janeway, a Vice Chairman of Warburg Pincus and a ScanSoft Director, stated: "Warburg Pincus enthusiastically supports the merger of ScanSoft and Nuance. Based on the foundation of ScanSoft’s strong performance in recent quarters, we have confidence that the combined company will have the technical and operational resources to meet the increasing demand for speech technologies and to increase shareholder value."

A Comprehensive Portfolio of Enterprise Speech Solutions and Expertise Benefits of the combined organization include:

• Proven Experience that Drives Better Results – Customers and partners of both companies will benefit from the experience behind thousands of successful speech services deployed worldwide. Combined, ScanSoft and Nuance have deployed more than 3,000 speech applications that automate approximately seven billion phone conversations for some of the world’s most respected companies, including Bank of America, British Airways, Citigroup, General Electric, NTT, Verizon and Vodafone. Together, ScanSoft and Nuance maintain speech-focused, deeply tenured professional service organizations with a combined team of approximately 250 speech and voice user interface experts that offer more than 800 cumulative years of speech experience.

• A Comprehensive Speech Portfolio that Delivers Choice and Completeness – ScanSoft and Nuance each bring a broad set of speech applications and technologies to the combined company. These assets will allow the combined company to satisfy a wider set of customers’ speech needs from a single source. As speech technologies continue to converge, the combined company will be able to leverage an unparalleled set of resources that spans the full breadth of speech capabilities – including network speech, embedded speech, and dictation – to drive innovation and more complete speech applications.

• Deep Technical Expertise that Results in Better Performing Products and Accelerated Innovation – The combined organization will bring together an array of resources – from 300 speech scientists and engineers to a patent portfolio comprising more than 250 patent families. With these assets, the combined company is well suited to handle complex implementations and solve more difficult problems with speech technology. Both ScanSoft and Nuance have been strong, active proponents of speech industry standards. Both companies are strong participants in the development of VoiceXML including providing multiple editors, and both companies were founding drafters of the MRCP specification.

• A Commitment to Premier Partner Relationships that Provide Total Solutions – The combined company will build upon the strong relationships that have been developed with industry leaders, such as Avaya, Cisco, Genesys, and Nortel, to further promote the innovation and adoption of speech. These partnerships are critical to providing complete solutions for our mutual customers and dramatically broadening the awareness and availability of speech solutions.

Maybe the following story will give you visions of Bill & Ted's Excellent Adventure, complete with George Carlin in a phone booth in cool sunglasses, like it did me. Then again, maybe not.

An MIT student is this weekend hosting a "time traveler convention" on the Boston campus of the elite science and technology school. (It's at 8:00 pm tomorrow night, if you're a time traveller with no weekend plans, incidentally.) 

He's providing chips and dip, and the open invitation is out, across the galaxy, for all time travellers to show up and share their experiences. They must bring proof, however, that they are indeed time travellers. But it can't be anything cheesy, like a button that reads "Four More Years: Marilyn Manson For President, 2024." It should be something worthy, like a cure for cancer or a solution to global child poverty.

I'm not making fun, here...being a devout sci-fi fan myself, I never miss a space shuttle launch, a new book from Arthur C. Clarke or an episode of Stargate SG-1 (Claudia Black from "Farscape" joins the cast in tonight's episode, by the way).

But I wonder if chips and dip is enough to attract time travellers. I mean, are there any people travelling through the space-time continuum who often say, "Man, I'd really like to visit Earth in 2005, but the lack of chips and dips and a good kegger keeps me away"?

Just to make sure the time travellers can arrive in the proper spot, the student, Amal Dorai, has provided cosmic coordinates to the East Campus Courtyard of MIT (42:21:36.025 degrees north, 71:05:16.332 degrees west). He's also been having his friends slip paper invitations into obscure books, assuming these rare books will have found their way into the libraries of book collectors (and time travellers) of the future.

Personally, I figure that if time travelling was ever going to be possible, someone would have come back and told us about it by now. Then again, maybe someone has, and he's sitting in the drunk tank of the New York City lockup. (Cops: "We've got a live one in there. Says he's from the future. Wants chips and dip.")

TES

Has anyone else noticed that with each new rendition of Windows, particularly in MS Word, the "help" factor (otherwise known as the "idiot" factor) keeps getting ratcheted up? MS Word used to be a very basic, stripped down word processing solution. That was great. We thought for ourselves.

Today, creating a document in MS Word involves a spasm-inducing mess of happy characters parading animatedly across the screen, mysterious functions that cause certain words to change colors and blink for no apparent reason and mysterious lines that swarm through your document horizontally and vertically with no reasonable means to remove them.

Did one person who worked on the document use the "track changes" function? If so, forget it...you're lost forever, even if it's been turned off. You can never completely obliterate the the stentorian messages that this function dredges up. "You changed a word!" I know. "Did you want to change that word?" Yes. "Did you consider the ramifications of what will happen if you change that word?" "Do you REALLY want to eliminate that formatting? Consider the feelings of the person who wrote that block of text!"

I wish there was a single button called "Piss Off And Leave Me Alone, MS Word" that would immediately give me an utterly blank, totally unformatted, all-but-basic-features-free, dancing paperclip-less document, minus the spelling and grammar cybernannies.

Are you listening, Microsoft?

TES

According to a report announced this morning by Datamonitor, "Global sourcing in European and North American Financial Services," financial services companies are in part driving the boom growth numbers in offshore outsourcing. Both North American and European financial services providers (particularly U.K. and Scandinavian companies) are increasingly sending core competency processes (mortgage processing, insurance underwriting, claims processing) offshore. Part of the reason, according to the report, is the increasing flexibility to do so that today's enterprise technologies provide for.

The summary of the report is posted below.

TES

Outsourcing of core financial services functions offshore on the rise 

While outsourcing of contact center and application services are relatively established, independent market analyst Datamonitor's (DTM.L) latest report on the subject "Global sourcing in European and North American Financial Services," expects increasing performance in core financial services functions - such as mortgage processing, insurance underwriting, claims processing - to be outsourced to alternative offshore locations. "Offshoring of core competencies amongst financial services institutions in Europe and North America is increasing as confidence in the offshore markets - be it via vendor or an in-house offshore operations - is improving rapidly," says Anders Maehre, financial services Technology analyst at Datamonitor and author of the study.

A global sourcing strategy is the dynamic use of distributed global resources in accordance with a balanced view of these issues across financial services institutions' (FSI) functions - not just the offshoring of certain individual tasks. The crux of a global sourcing strategy, as Datamonitor sees it, is the awareness of global and regional sourcing options and actively making sourcing decisions about all business functions, rather than using internal resources or resources in a certain location as a default position.

While the benefits of offshore outsourcing are well documented - lower costs, higher quality to name but a few, its use has remained mostly limited to certain function areas such as contact centers and application services. Whilst this immature view remains the primary perception of offshore outsourcing - even in the relatively speaking advanced financial services sector - it is developing rapidly in parallel with the growing acceptance of offshore services provision.

In terms of acceptance and take-up, North America and the UK remain significantly more advanced than the rest of Europe. However, Nordic FSIs are also increasingly showing signs of embracing nearshore alternatives for certain services.

The current shift, in terms of business process outsourcing (BPO) sourcing strategies in financial services, is enabled by a growing number of outsourcing service providers and IT services vendors having a credible global delivery capability, an ongoing simplification of the outsourcing process from the FSI point of view and improving industry specific expertise among the service providers.

FSIs need to develop global sourcing strategies that enable them to choose between operational locations and sourcing set-ups in accordance with their strategic objectives, weighing up a number of factors such as political and operational risk, regulatory issues, cultural barriers, cost considerations, vendor offerings and local skill sets.

Maehre concludes: "Offshore outsourcing has gathered tremendous pace in recent years. Political pressure and controversy has done little to deter top-line growth. The improving credibility of many of the offshore providers and increasingly global delivery capability of the leading outsourcing service providers will push FSIs in both North America and Europe towards intelligent use of global resources."

Unless you're referring to the opalescent green dude from Star Trek: The Next Generation.

This is an error made by so many people in business that today, using the word correctly sounds "odd." It may sound odd, but the word "data" is plural. The singular form of the word is "datum."

Examples:

Correct: That datum is curious.

Correct: Those data are indicative of the fact that our help desk employees spend the day playing Tetris.

Correct: Data rescued Captain Jean-Luc Picard from a group of methane-breathing green aliens.

If advanced business analytics tell us that increased efficiencies create more profit, by observing this rule, you'll be doing TMC and its editors a favor by allowing them to to save the aggregate time it normally takes them to change the verb tenses after "data" in contributed articles and news items. Those data cannot be disputed.

TES

EADS Telecom, a player in the enterprise telephony and contact center software market, announced today that its North American commercial information networks division has changed its name to Aastra Intecom in the United States.

The company has stated that the name combines Aastra, which markets and sells telecommunications products globally, with the Intecom name, reflecting a historically strong U.S. reputation that includes several industry “firsts”.  (Intecom was the operating name for the entity for more than 22 years.)

For more information, visit www.aastraintecom.com.

TES

Hosted CRM provider NetSuite recently announced its release of NetSuite CRM+, a full-service, hosted-delivery CRM product with some extras.

Unless you've been living in a closet for the past year, you will have noticed that the hosted CRM market is heating up considerably. Try reading the business and technology news on a daily basis without coming across information about Siebel or Salesforce.com, plus smaller players such as Contactual, Salesnet or NetSuite.

NetSuite, aware it's operating in a busy market, launched CRM+ to be a little more than many customers might expect. Its differentiation lies in the fact that it helps companies manage not only customer acquisition and order fulfillment, but the full customer lifecycle, through billing functionality and repeat business.

Release is below.

TES