Nuance plays hardball in Voice Recognition; acquires at least 4 companies after first suing them

“When rumors swirled on May 7 that Apple might acquire Nuance Communications, shares of the software company rose 10 percent to $22, within pennies of an all-time high,” Peter Burrows reports for Businessweek. “The assumption was that Steve Jobs gets what Steve Jobs wants.”

MacDailyNews Take: That assumption would be correct, Peter. But, we’ll play along for now…

Burrows reports, “A safe bet—unless you know Nuance Chief Executive Officer Paul Ricci. In speech-recognition technology, which Nuance dominates, the soft-spoken Ricci is considered every bit as powerful as Jobs.”

MacDailyNews Take: Sigh. Playtime always ends so quickly! In wheel-attachment technology, the non-spoken Mr. Lugnut is considered every bit as powerful as Jobs.

Burrows reports, “Ricci’s critics say he’s lawsuit happy and uses strong-arm tactics to weaken innovative rivals so he can buy them on the cheap or put them out of business. Over the past decade, Nuance, based in Burlington, Mass., has sued eight companies over alleged patent infringements. It hasn’t won any judgments and lost one. On at least four occasions, it purchased smaller companies it had sued. ‘Competing with Nuance is like having a venereal disease that’s in remission,’ says Dave Grannan, CEO of Vlingo, a speech-recognition startup that’s involved in five Ricci-related lawsuits. (Nuance has four suits against Vlingo; Vlingo has one against Nuance.) ‘We crush them whenever we go head-to-head with them. But just when you’re thinking life is great—boom, there’s a sore on your lip.'”

“Yet for all its market share and acquisitions, Nuance is coming under increasing pressure. The main reason is Google (GOOG), which sees the things people say to their devices as a way to better target ads,” Burrows reports. “Seven years after hiring former Nuance executive Mike Cohen, Google is giving away its speech-recognition technology to the same phone makers and cellular carriers that buy from Nuance.”

Burrows reports, “As for Apple, analysts say it’s unlikely to buy Nuance. ‘Nuance has too many different businesses,’ says Gleacher & Co. analyst Brad Whitt. Jobs wouldn’t want to continue licensing Nuance’s technology to rival device-makers, Whitt says, much less muck around in the health-care industry. And yet people in this corner of tech can’t help imagining what might happen should Jobs and Ricci meet across a conference table. Says says former PARC director John Seely Brown: ‘I’d pay plenty to be in the room to hear that.'”

MacDailyNews Take: John Seely Brown must really want to see Ricci reduced to a carpet stain.

Much more in the full article here.

MacDailyNews Take: Who inflates the most, Burrows describing Ricci in comparison to Jobs or Ballmer at an all-you-can eat buffet?

16 Comments

  1. The main reason is Google (GOOG), which sees the things people say to their devices as a way to better target ads

    Because people screaming “why doesn’t this fscking piece of crap do what I want” seems like a valid method to select an audience for you ads.

    Try that with Windows. See how you get on.

  2. MDN…

    It depends on the buffet:
    If it’s a buffet from Golden Corral, then Ballmer wins.
    If it’s an all you can eat salad bar, oh wait Ballmer wins again!

    Steve could make Ricci cry in his own excrement if he wanted to.

  3. Apple has to tread lightly, as size and buzz bring attention from anti-trust and monopoly concerns. They might not be legit, but can be a bag of hurt, anyway.

    Apple is not the company it was 5 years ago in the eyes of the public or the government entities charged with enforcing certain laws. Apple’s market cap, cash pile and mindshare are a universe apart from where it was a couple of years ago. Playing hardball with a small company could look very bad in court.

    Looking bad in court does not always have anything to do with guilt, but can be very expensive.

  4. Apple buys companies to add their technology skill set to their own. If Nuance fits the bill then they could get bought.

    Companies have to sue to protect their IP. Maybe Nuance does the same thing. Companies do this.

  5. “The main reason is Google, which sees the things people say to their devices as a way to better target ads”

    Google gets scarier and scarier ever day.

      1. Interesting – Here in Oz, it is 21 May 2011 and no apocalypse, yet! We still have a little over 6 hours until all the Rapture-freaks get taken up. Will this mean I will get my iPad sooner? Or that there will be a huge job market open up? There are good things about being left behind. After all, Google thinks it is the saviour of all mankind because they “do no evil”. One has to define evil though.

        As for the thread, if Nuance is worth it and St4eve Jobs really wants it, he would by it and sell off the bits that don’t work. Done all of the time. Voice recognition is a valuable asset. This may just be a bluff by Ricci to get a better price. Reality is that we never know what really goes on in the back rooms.

        Cheers, and see you on the 22nd. 😉

  6. Years back I had a run-in with a developer for Nuance’s forbearer Dragon. Question not their technology lest they tear out your carotid arteries. 👿

    I’m glad Apple is on their good side these days.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.