Voice Technology Triumphs Telephony: Here’s Why

For the longest time, those of us in the communications technology space have equated voice technology with telephony. This was certainly the case before the AT&T breakup of the Bell system in 1984 and continued for another 20 years until voice over Internet Protocol (VoIP) emerged as the successor technology to time-division multiplexing (TDM). Since then, the balance has tilted irreversibly in VoIP’s favor, but until the cloud’s recent ascendancy, VoIP was predominantly about telephony. VoIP’s purpose was to provide a lower cost, more accessible form of voice communication – nothing more, nothing less.

 

Cloud technology has been with us for years, but only recently has voice technology been one of the main applications. The reason is simple—making cloud-based real-time communications modes like voice and video is more complex than building data applications, which are near real-time at best. The cloud has matured, and as enterprises have come to trust it for real-time communications, those challenges have essentially been overcome. Furthermore, new cloud-based technologies – especially from the artificial intelligence (AI) family – have taken voice to new levels that the world of legacy telephony never envisioned.

 

Consider the three transformational technologies referenced in the above paragraphs: telephony, VoIP, and cloud. The Bell network was the greatest technological innovation of modern times, rivaled only by the advent of electricity around the same time, and a century-plus later with the Internet. Modern urban life would be inconceivable without any of these, and the public switched telephone network (PSTN) was truly the network blueprint for all other forms that have come along since to connect people, places, and things.

 

VoIP is one of the most important innovations that the Internet made possible, but it took the cloud for VoIP to become more than a digital technology to replicate telephony. My Watch This Space podcast partner, and long-time colleague, Chris Fine, and I explored these developments in our recent PulveREDU course, The New Voice – Exploring New Worlds Beyond the Phone Call. Some of the key themes we discuss are reflected here.

 

One example is the idea that the value of an application – or more specifically, a communications mode – is never absolute or defined solely by the technology that enabled it. While not invented for this particular purpose, telephony found value by being the best way to communicate over distance and enable societies to scale from loosely federated regions to an integrated national economy with greater prosperity for all.

 

If that was the end of the telephony story, it would be compelling. However, as these other technologies came along, new chapters have been written. Not surprisingly, the Internet’s early aspirations were the same as with telephony—but on a larger scale—crossing all borders with a ubiquitous technology that brought people together. When you layer VoIP and cloud innovations on top of telephony, new forms of value emerge. In the case of voice, this means becoming a data application for which telephony was one use case, among many others that followed.

 

The takeaway here is that we needed subsequent waves of technology and innovation to take it beyond telephony for voice to become bigger than ever. We couldn’t be where we are today with voice if TDM remained the only option. This narrow thinking was key to AT&T’s 1984 breakup. Monopolies can truly serve the public good under the right conditions, but they also stifle innovation and competition, which is their undoing.

 

So far, all I have said about voice being bigger than ever is that it’s now a data application. For most No Jitter readers, no further explanation is needed, as the possibilities are well-understood. The utility of voice as a communications mode – whether it be TDM-based, VoIP, or mobile for telephony – will always be high. In both our personal and professional lives, human interaction is as much remote as in-person and speaking remain our most expressive mode of communicating. Voice is the default mode for in-person communication, and when it comes to remote interaction, it remains the preferred mode for many.

 

That equation doesn’t change with all these new technologies; rather, they make the pie larger. By digitizing voice, it becomes a data application, and as we increasingly view the world through the lens of technology, this opens incredible opportunities to create new value beyond telephony. Given the prevalence of voice in everyday communication, much of it is ephemeral and is either not captured at all or is captured in ways that make extracting anything of value difficult.

 

This brings us to Microsoft’s recent acquisition of Nuance, which is one example of how the technology landscape is shifting to address these opportunities. The details of the deal were widely covered when announced in April, but the rationale for this move is a great example as to why voice is bigger than ever.

 

Digital transformation is on every IT leader’s checklist, and Nuance enables many applications that digital-first enterprises and contact centers require. The list is almost endless, but some considerations include speech recognition (ASR), speech-to-text, text-to-speech, transcription, translation, voice search, conversational AI, chatbots, voice biometrics, sentiment analysis, telehealth, and telematics.

 

These are the applications and capabilities that are defining value now—and with Nuance, Microsoft takes a big step forward for all of them. As cloud and AI are coming to dominate all forms of communications technology, Google and Amazon are becoming Microsoft’s strongest competitors—a move that helps close an important gap where those companies have a big advantage.

 

Most notable, however, is the absence of telephony in all this. Microsoft has always lacked native telephony capability, but the path forward with voice is all about data and has nothing to do with dial tone and direct inward dialing (DIDs). The $19.7 billion price tag speaks loudly to the value Microsoft places on these forms of voice—which I have been calling The New Voice for some time—and aside from LinkedIn, is its largest acquisition to date.

 

Telephony is still central to the Microsoft Teams value proposition, but the focus here is all about how these newer voice applications will help customers address their digital transformation challenges. Here’s where the notion of equating voice with telephony breaks down—telephony still has utility, but the emphasis going forward is on these other applications of voice.

 

Telephony should still be on your roadmap, but now more than ever, voice is centered around many other things. The history of telephony teaches us that new technologies will continue to emerge and reshape what has come before.

 

With legacy thinking, it’s easy to equate with telephony with voice, but now there are concentric rings around telephony that represent new forms of value and make the voice pie larger. When thinking about the needs of the enterprise or the contact center, these new forms of voice should be top of mind.

 

Today’s UCaaS platforms have largely overcome the challenges of first-generation unified communications offerings, and many of the applications are becoming commodified. The real value will come from the data that can be derived from communications activities, rather than the underlying applications themselves. As such, for IT decision-makers to make the right moves, they must recognize how and why voice is much bigger than telephony.