Nuance Unveils Complete Speech Solutions Approach.

Business Editors/High-Tech Writers

MENLO PARK, Calif.--(BUSINESS WIRE)--Nov. 18, 2002

Speech Experts Announce New Voice Platform, Applications and

Services, Increasing the Business Value of Voice-Driven

Solutions for Companies Worldwide

Nuance (Nasdaq:NUAN), the speech experts, today unveiled new products and services aimed at increasing the business value of voice for customers worldwide. With these new offerings, Nuance is responding to the market demand for complete speech solutions that deliver maximum business benefits -- cost savings, increased customer satisfaction and potential new revenue from voice-driven services. These new offerings are designed to speed and ease system deployment and lower the total cost of ownership. New products include the Nuance Voice Platform, a standards-based software platform designed specifically for speech solutions, and pre-packaged voice applications to be delivered by a newly formed organization within the company. Additionally, new services from Nuance will include resources, training, and support to assist customers and partners in developing, delivering, and deploying successful speech solutions.

"With nearly a decade of speech innovation under our belts and more than 750 customers, partners and customers have been looking to Nuance to play a broader role in the delivery of complete speech solutions to the market," said Ron Croen, president, CEO, and chairman, Nuance. "Customers can now turn to Nuance and our best-in-class community of partners for all of their speech needs."

Nuance Speech Solutions: Solving the Business Automation Challenge

Managing customer interactions across the enterprise is one of the biggest business challenges facing companies today. Overwhelmed by the sheer number of interactions, companies are looking for automation solutions that are convenient for the greatest number of customers, help them save valuable time and money, and deliver high customer satisfaction rates. Speech is the solution of choice to accomplish these goals.

Nuance's speech solutions offer significant business benefits, including dramatic cost savings as compared with live operators. A typical voice-enabled customer care application can cut the cost per interaction from approximately $10, using live operators, to just $0.20 with speech. Web self-service offerings and email reportedly can't come close to matching those savings. According to Forrester Research, it costs, on average, $9.53 to resolve a customer issue with email while Web self-service costs more than $6.00 per resolved issue.

Additionally, speech delivers increased customer satisfaction. According to the Nuance Speech User Scorecard, a survey of more than 550 callers from six different customer speech systems, 84 percent prefer speech to live operators, 80 percent prefer speech to touchtone, and 84 percent see speech as equal to or better than the Web. Speech also allows companies to build new voice-driven services that deliver potential new revenue sources. Revenues from voice-driven services account for roughly $770 million in consumer spending today and should grow to approximately $27 billion by 2006 according to The Kelsey Group.

Nuance Voice Platform: The Foundation of Speech Solutions

Nuance Voice Platform, which is scheduled for general release in Q1 of 2003, has been designed as the ideal foundation upon which speech applications can be developed and deployed. It is an open, standards-based software platform that is optimized for speech, thus enabling the benefits of speech to be maximized. These include increased automation rates, improved customer satisfaction and faster return on investment from speech solutions. Nuance Voice Platform leverages the innovation and success of Nuance's earlier voice platform technologies. More than 200 companies in 24 countries use Voice Web Server, Nuance's industry-leading first generation platform.

Nuance Voice Platform supports VoiceXML 2.0 -- the open, industry standard for voice applications and services. Because VoiceXML is based on Web architectures, businesses using Nuance Voice Platform can easily leverage their existing IT staff expertise and Web infrastructure investments. In addition, Nuance Voice Platform runs on industry standard hardware, which could shave as much as 35 percent off of the hardware costs associated with speech system deployment. All of these capabilities combine to lower the overall cost of ownership of speech systems.

Nuance Voice platform is optimized for the development and deployment of speech solutions. Tightly integrated with Nuance's industry-leading speech technology, Nuance Voice Platform allows all of the latest capabilities of that technology to be readily accessible and available to customers. For example, Nuance Voice Platform provides customers access to the latest advances in speech recognition accuracy and human-sounding text-to-speech as well as technologies such as Nuance Say Anything(TM) (natural language technology), Speak as One(TM) (recorded prompt and text-to-speech smoothing technology), Accuburst(TM) (system optimization technology) Verifier(TM) (biometric voice authentication capabilities), and the patented Nuance Distributed Software Architecture.

Other unique advantages of the Nuance Voice Platform will include:

-- Easy management of voice systems: The Nuance Management Station, a key element of the Nuance Voice Platform, will make this possible by providing comprehensive and centralized Web-based administration, monitoring, reporting, analysis and tuning. It includes a software management dashboard designed specifically for command and control of the enterprise speech environment. These tools monitor speech system performance in real-time, providing business managers with an accurate view of the effectiveness of their customer care initiatives. It also proactively identifies where improvements can be made, and even allows a company to drill down to recordings of individual customer service calls to fully understand the actual customer experience with the system.

-- Rapid development of voice applications: The Nuance application creation and deployment environment will enable developers of different backgrounds and skill levels to rapidly build speech systems. Developers can choose between IVR or Java-centric tools.

-- Proven reliability, scalability and system availability: By leveraging more than seven years of open standards development expertise, and the success of Nuance Voice Web Server, the Nuance Voice Platform has been designed to support high-volume, mission critical voice-driven services. The patented Nuance Distributed Software Architecture provides load balancing and fault tolerance of the speech resources; and the platform leverages the proven performance of the most robust and widely deployed application servers on the market today such as BEA WebLogic, IBM WebSphere and Apache Tomcat, to provide load balancing and automatic fail-over of the voice application. This architecture helps to ensure system uptime required for mission critical voice-driven services.

-- Cost-effective systems integration: Nuance Voice Platform leverages application server architectures to facilitate integrations with a broad range of call center and back-end infrastructures. Packaged interfaces are available to over fifty different applications and technologies ranging from Siebel to legacy mainframe systems. Nuance Voice Platform is designed to enable rapid integration to computer telephony environments from companies such as Avaya, Cisco, and Genesys.

"Our research indicates that businesses are looking to invest in speech recognition platforms over the next two years and key criteria are open standards and lower costs," said Sheryl Kingstone, Program Manager of CRM Strategies, Yankee Group. "Nuance's new platform answers customer expectations by providing a VoiceXML platform that eases integration with traditional CRM applications along with other points within the enterprise."

Nuance Speech Applications to Speed and Ease Deployment

In addition to the Nuance Voice Platform, Nuance today announced the formation of a new applications group within the company, led by Nuance co-founder Peter Monaco. The group will build pre-packaged speech applications designed to reduce speech application deployment time by as much as 50% and reduce the costs and complexities of maintaining custom application code. These applications will incorporate the best practices of application design established by Nuance through hundreds of deployments. The group's first applications will be available in early 2003. Customers will be able to take advantage of packaged applications from Nuance as well as from a host of certified application partners who have developed their applications on the Nuance Voice Platform.

Nuance Solution Services Facilitate Success with Speech

Voice-driven applications can help companies achieve cost savings and customer satisfaction levels that are not possible with automation alternatives such as touch-tone or Web-based self-service systems. However, to achieve these unique benefits, unique skills and experience are required. Designing and delivering a high-quality speech solution requires expertise in areas such as dialog design, grammar development, persona design, usability, and speech system tuning to name just a few. With today's announcement, Nuance now offers a full suite of services to assist customers at each step in the speech solution development and delivery process -- from systems design and architecture to post-deployment technical support. To meet specific customer needs, Nuance can provide one-stop shopping for the entire speech solution -- leveraging the expertise of partners where appropriate -- to deliver high-quality speech systems. In addition, new offerings from Nuance Speech University further enable the delivery of successful speech solutions by training and certifying Nuance partners and customers.

Pricing and Availability

The Nuance Voice Platform is currently in customer and partner trials and is expected to be generally available in the first quarter of 2003. Pricing begins at $1800 per port. Nuance's pre-packaged applications will be unveiled in the first half of 2003. Both Nuance Voice Platform and Nuance's packaged speech applications will be available directly from Nuance and through a network of certified Platform VAR partners.

Industry Support for Nuance Voice Platform

Industry Analysts:

"Nuance has taken a bold step with its new strategy. By acting as a solutions provider it has the potential to simplify the implementation process for its customers. If it can reduce confusion and decrease the deployment time, while maintaining the quality of voice applications, it will help many customers -- particularly for applications justified by cost-based business cases."

Dan Hawkins, Managing Industry Analyst, Voice Business, Datamonitor

"Through 2004, improvements to telephony self-service applications represent the largest single source of operational savings for 75% of call centers. (0.7 probability). And in terms of customer service, advanced voice platforms that incorporate high quality speech technology can offer significant benefits. These types of advanced systems allow executives to see and understand system performance and usage patterns, identify/remedy trouble spots, and drill down and observe specific caller experiences. They should also offer a high level of control that allows management to incrementally fine tune and optimize the natural language system for callers, resulting in real-time optimized customer service."

Bernard Elliot, Research Director, Gartner Group 

"Companies that control incoming call handling with touch-tone IVRs seem less accessible to their customers than companies using speech applications for customer interactions. Major improvements in VoiceXML applications enable companies to talk to customers through natural-sounding speech applications capable of handling complex transactions and to interpret a wide range of user input. Importantly, automated voice services improve the caller's experience and generate higher customer acceptance and usage than traditional IVRs."

Market Overview 2002:

Speech Recognition for Contact Centers and Enterprise Applications

Elizabeth Herrell, Giga Information Group

"The drivers of cost reduction in the contact center are fewer transfers to agent, increased use of automation, and more accurate routing of calls. By allowing conversational-style interactions, Nuance Voice Platform will drive cost reduction and improved customer satisfaction, which translates to faster payback on the system. As speech recognition becomes mainstream over the next few years, the point of differentiation for solutions providers and implementers will be the kind of natural language understanding that Nuance Voice Platform provides."

Mark Plakias, Senior Vice President, Communications & Infrastructure Group, Kelsey Group

"Nuance has long claimed it had superior core technology, and the Nuance Voice Platform gives it a vehicle to deliver a solution that optimizes the delivery of that technology. It is a bold step that lets companies deploy speech implementations more quickly and with no compromises."

Bill Meisel, President, TMA Associates

Partners & Customers:

"Our ability to design and deliver sophisticated speech solutions that satisfy our customer and market demands relies on the ability of our partners like Nuance to continually develop leading edge technologies built on open standards. The Nuance Voice Platform gives Datria's customers another option upon which to deploy our voice-enabled workforce management solutions."

Scott Bechler, Vice President of Sales and Marketing, Datria Systems

"WorkForce Technologies is excited to partner with Nuance for the roll-out of the Nuance Voice Platform. Our customers are already enjoying the benefits of VoiceXML-based technologies, such as Nuance Voice Web Server. Representing the best that next-generation speech technology has to offer, we're looking forward to installing Nuance Voice Platform at two of our `Flagship Accounts.'

Gail Toti, Vice President of Sales, WorkForce Technologies

"We recognize the need for standards-based speech platforms like the Nuance Voice Platform. Our participation in Nuance's partner network underscores our commitment to delivering best-of-breed voice-enabled solutions to our customers."

Phil Gray, President, Versay Solutions

"As the market drives towards open standards based solutions, Nuance is responding by providing a platform to address those requirements. Viecore has been a long standing Nuance partner, and we are committed to their on-going success and direction."

Tom Chisholm, President and CEO, Viecore

About Nuance

Nuance is the speech expert. Nuance's speech software solutions enable automated access to everything from account balances to flight information, email reading to voice activated dialing -- accessed using nothing more than the power of voice and an ordinary phone. In markets around the world, leading enterprises and telecommunications carriers -- including British Airways, Nomura Securities, OnStar, Sprint PCS, United Parcel Service, Vodafone, and many more -- work with Nuance to reduce costs, increase customer satisfaction and retention, create new sources of revenue and improve security. Nuance is headquartered in Menlo Park, Calif. and has offices around the world. For more information, visit www.nuance.com or call 888/NUANCE-8.

This press release contains forward-looking statements, including, for example, those relating to the business benefits and technological advantages of Nuance products and services, the projected success and cost savings of deployments using Nuance products and services, market adoption of Nuance products and services, customer and end user adoption of applications using Nuance products and services, the growth of the market for Nuance products and services, planned deployments of new Nuance products, the success of Nuance's customer and partner relationships, Nuance's ability to deliver new products and services as planned, and the success of Nuance's solutions offering. There is no assurance that the results contemplated by any forward-looking statements will be realized. The following factors, risks and uncertainties, among others, could cause actual results to differ materially from those described or implied in this press release's forward-looking statements: the risk that the business benefits and technological advantages of Nuance products and services will not be realized in some or all circumstances, the risk that deployments using Nuance products and services will not achieve anticipated cost savings or broad commercial success, the risk that there will be low market adoption of Nuance products and services, the risk that applications deployed using Nuance products may not achieve acceptance among customers or their end users, the risk that Nuance's business and/or the market for Nuance products and services will not grow as anticipated or will decline, the risk that Nuance's customer and partner relationships will not continue successfully, the risk that Nuance will encounter delays or other difficulties in delivering new products or services, the risk that Nuance's solutions offering will not achieve anticipated market adoption or broad commercial success, the risk that current customers or partners may not deploy Nuance products as planned, the risk that unfavorable economic or other conditions may negatively impact Nuance's business, and other factors described in Nuance's filings with the Securities and Exchange Commission, including but not limited to Nuance's last-filed annual and quarterly report form 10-Q. Nuance does not undertake to update any oral or written forward-looking statements that may be made by or on behalf of Nuance.

Note to Editors: Nuance is a trademark of Nuance Communications, Inc. All other trademarks are property of their respective owners.