Analyst Firm Gartner predicts that “by year-end 2013, at least 15 percent of Fortune 1000 companies will use a virtual assistant to serve up Web self-service content to enhance their CRM offerings and service delivery”. Chatbots.org agrees with the upcoming industry growth, especially since it matches their earlier market estimates for 2015 defined back in 2004, but has some criticism as well, especially on the vendor criteria and lack of identifying challenges within the industry.
Growth
First of all, Gartners prediction matches the future vision of Chatbots.org. The recent Gartner report Virtual Assistant Vendor Landscape 2011 describes 19 vendors in this area who are responsible for 90% of the industry revenue. Gartner estimates that there are approximately 36 active vendors worldwide and the industry will grow significantly in the years to come.
Chatbots.org, specialized in humanlike conversational artificial intelligence, has found much more activity: it has listed virtual assistant vendors, almost 700 virtual human cases and over 9000 members contributing to or interested in this topic. Their estimate is that there are 200 vendors worldwide and they expect that this number will triple during the next three years, as smaller enterprises also start to employ virtual assistants on their websites and emerging markets will soon discover the benefits of virtual agents.
Futurist Erwin Van Lun, CEO and founder of Chatbots.org predicted back in 2004 that all Fortune 1000 business-2-consumer companies would employ speaking artificial characters in 2015, in order to automate their conversations with consumers in an interactive spoken dialogue, referring to them as Brand agents. With four more years to go, Van Lun holds his prediction and is excited to watch how his future vision unfolds.
Virtual assistant vendor criteria
Apart from significant growth, the Gartner report summarizes key criteria for evaluating VA solutions, describes trends in the market place and comparative data across active vendors in the virtual assistant marketplace. Vendors were evaluated on criteria in 9 categories: understanding concepts, social dialogue, multiple questions, spelling and grammar, 3D avatars with emotions, mobile solution, sales and marketing, drill-down analytics and feedback management.
It is interesting to notice that the report mixes vendors of conversational artificial intelligence for Web Customer Service (WCS) with avatar providers, companies creating the characters visualizations. These disciplines are generally perceived by the market as totally separated. The opinion of the chat bot industry is that intelligence should be leading and even though an additional animated 3D human will improve the overall dialogue experience, this is not where buyers primary select on, it is not where buyers can save costs, and it is not where the major part of industry revenues are created.
Industry challenges today
Van Lun: “One of the problems with the Gartner report is that it is describing the industry from an outsider’s perspective, from an IT perspective only. Therefore, we believe the wrong questions have been asked. It is not only a trend in information technology, it is the idea of humanizing communication.” He continues reflecting on the today’s status: “The major problems the industry is facing today are lack of standards, lack on terminology and lack of metrics.” These issues are not addressed in the Gartner report at all.
The lacking consensus on terminology leads to confusion in the market place. Chatbots.org has identified over 127 (!) synonyms of the term chatbot, and even on each single term in the list, there is no agreement in business, or in research communities. Even worse, on many terms, there are other meanings as well, totally unrelated to the industry. As a result, Wikipedia is a battlefield with too many pages describing exactly the same phenomenon and at the same time document owners persisting on their own definition and removing other contributions. Due to this situation, it has taken Chatbots.org more than one year to find all synonyms of the term chatbot. It is not very likely a buyer will get a complete industry overview, simply because of this lack of consensus in terminology, neither he will get the impression this market is maturing.
To make it even worse, Gartner is now consistently pushing the term ‘virtual assistant’ while its usage is extremely confusing as ‘virtual assistant’ is also used for people assisting other people on a distance. The Google result pages have been populated by this meaning since the foundation of the search engine back in 1998. Unfortunately, due to enormous credibility of the IT research firm, some developers now also tend to adapt this term in their offerings, which even enlarges this issue in this industry.”
Another industry challenge not addressed by the report is the lack of consensus on metrics. This can be read in one of Gartner’s other statements: “The strength of the VA to answer any question posed lies in the back-end knowledgebase. At a minimum, the customer receives an 85% relevance of response to the questions asked. Best practice dictates that the relevance of response should be around 93% to ensure consistent customer satisfaction, but Gartner has seen reports of up to 97% relevance of response achieved.”
Van Lun: “This is a good example of another problem this industry is facing today: developers themselves do not agree on a standard process. When is a relevant response given? When did the VA recognize the topic? When no more questions are being asked? When website visitors no longer attempt to contact the organization through other channels? Corporate buyers, obviously trying to compare vendors, are confused.”
Looking forward
Van Lun states in his book on the future of media, marketing and brands, which was nominated in 2005 for the Dutch Marketing Literature Awards: “Brand agents are the embodiment of the ability of brands to listen to consumers. They will be part of human life, they will be everywhere, in a natural way, even more normal than television is today.” This industry will organize itself, fortune consumer brands will take the lead and others will follow, probably just a few years later. We will experience a new era with thrilling years to come for (virtual) humanity.”
