Tell Me What?
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Microsoft's intended Tellme acquisition foreshadows more deals to come: The company will spend what it takes to push forward its "software plus services" concept. |
Microsoft announced the deal, which was rumored yesterday, at noon EST today. Neither company would disclose terms; Tellme is privately held.
In fiscal 2006, Microsoft made about two dozen acquisitions, with the emphasis being on small, privately-held companies. The majority of these companies developed products around Microsoft software.
What distinguishes Tellme from other recent acquisitions is the company's far customer reach, the large number of consumers that unknowingly use Tellme's services and the jumpstart the technology has in consumer-facing, hosted voice services.
During an analyst and news media conference call today, Mike McCue, co-founder and CEO of Tellme, described its service as the "largest hosted voice platform in the world." As for breadth, he said that about one-half of all directory assistance calls are processed using Tellme technologies.
When asked about Microsoft's future acquisition intentions, Jeff Raikes, president of the company's business division was clear.
"We're always looking at acquisitions," he said. Raikes went on to describe how Microsoft continually looks for good companies and their people and technologies to add to the "team."
The acquisition will thrust Microsoft into the area of hosted speech services, whether those used for consumer-facing or internal enterprise IVR (interactive-voice response) systems.
Raikes described voice as an important user interface and that Microsoft would be "combining Tellme's speech expertise" with its own technologies, so that "we can accelerate our progress." Microsoft plans to "extend the speech platforms," with emphasis on "software plus services."
The latter point is the key to understanding the Tellme acquisition and others Microsoft may make in the future.
Microsoft is rapidly shifting its services messaging away from SAAS (software as a service) to software plus services, which in Microsoft parlances uses the "+" symbol. Microsoft benefits by taking control of the nomenclature and by emphasizing what it perceives as the importance of software in delivering services.
Practically, I don't see that much difference between software as a service and software plus services, as the latter is articulated by Microsoft. But subtleties matter, particularly in the messaging and Microsoft's ability to put the emphasis on software's role over that of services.
Microsoft is clearly preparing a major push into the hosted services market. Dynamics CRM Live, the undisclosed software services platform and Tellme acquisition are indications that a major hosted services push will be coming in the second half of 2007.
I would watch for Microsoft to make additional acquisitions along the way, to fill in with existing technologies what the company doesn't have time to develop itself.
Comments (5)
The idea of Software + Service is a great idea. The idea of software as a service has never seemed right to me. Possibly because the idea is built on internet access and that does not work in some industries. The option of additional service to the software seems like a far better idea then the software as a service on it's own.
Posted by Jake | March 14, 2007 4:45 PM
But, first...the entire company needs to morph into a service company. Thus far...just software/hardware.
After a rocky start with 190,000 stranded SMB's using beta Office Live, it's clear that no one there knows service.
The entire organization needs a "service guru" to educate them. But first, step one, admit there's a problem. Doubt if the leadership will do that.
It's all pretty basic but companies, especially bureaucratic ones - Microsoft, FEMA, Microsoft - maintain a "let them eat cake" attitude that comes out of the smugness around being either non-profit or hugely profitable; in either case "service" sucks.
First, know this: EVERYONE'S A CUSTOMER! If you adopt that attitude toward employees, vendors, customers, prospects and yes, even internal MSFT partners, you can't go wrong.
Case in point: Before today, I absolutely hated Time Warner Cable in Binghamton, NY. So, when I brought my faulty DVR back to them, I expected an attitude. I walked up to the desk, said, "American Idol, 2 hours of fuzzy recording" and she said, "Oh....I'm sorry", and looked me square in the eye. I stopped in my tracks.
A little empathy from one person in an arrogant psuedo-utility has moved me towards greater understanding and...a little empathy, myself. Think of how this would work at MSFT? Or, any company. Just a little human kindness. And...it CAN be learned!
Posted by microstiff | March 14, 2007 5:50 PM
If I were Microsoft (fortunately I am not), I would be looking at Yahoo, not Tellme. Google is becoming too strong to compete with. Despite the parallels in service (Live and Yahoo intersection), this may be a the last chance.
Posted by Roy Schestowitz | March 15, 2007 9:11 AM
What bothers me is that I just want Microsoft to stop being able to acquire things. Because it seems like more and more often they are "acquiring" companies and softwares by forcing them into near extinction and then lovingly offering to purchase them so they don't have to file for bankruptcy. If it were me, I would just file for bankruptcy and tell Microsoft where to stick it. I wouldn't want to get rich off of the vulchers. Plus, I haven't really heard anything about Tellme since the acquisition took place so I'm not all that worried about it. What I do have to do though is laugh at Roy...no offense, but Yahoo is successful enough that they have and will continue to laugh in the face of Microsoft. Google may be a competitor to Yahoo but too much of Yahoo is still so far ahead of Google and it's not catching up that fast. Plus with new competitors coming out like StumbleUpon, Google will make the mistake of trying to be cool instead of doing what they do best, don't you think?
Posted by Linen | July 24, 2007 11:47 AM
It’s really a mystery how MS sees the potential of some business that happens to be never-heard before by most people. I’m not sure though if this is an advantage but I know MS will never go wrong.
Posted by oil pet portraits | January 9, 2008 4:58 AM