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Alexa, the Sinister Genius

by David Yockelson  |  April 6, 2016  |  2 Comments

By now, you likely will have heard of Alexa, the voice service built in to the Amazon Echo speaker.

That entire last sentence is accurate, but it’s a huge understatement. It hardly scratches the surface of the current state and future potential Amazon possesses with its Echo (and follow on devices), Alexa, Dash, Prime and various other elements of its consumer-facing products and services. Certainly, much of this is a book that is yet to be written, but if early results and indications are future predictors, then our homes are going to be replete with Amazon stuff for quite some time.

“Now wait a minute,” you say, “what about Siri (Apple), Cortana (Microsoft), Google’s nameless entrant, Watson (IBM) or a myriad of bots (see Facebook, Kik, etc.) or other current or potential voices (pun intended) in the crowd?” Well, actually, I’m not sure many CONSUMERS would say that since most consumers aren’t all that interested in the voice wars among the providers. They tend to be more interested in what a given voice assistant can do for them on their device(s) of choice and are tickled when said assistant delivers a malapropism (by the way, I asked Google via my Samsung phone for the definition of “malapropism” to ensure I was using it correctly; give it a try). They’re less into understanding the depths and expanses of natural language processing, artificial intelligence, bots, related APIs or the other technical elements that actually make these things work. They just want them to work, and eventually, they will want them all to work together.

But let’s come back to that first sentence to see how Amazon plans to get us there and why its Alexa persona is a sinister genius. It’s my feeling that success in this voice-driven world (or market or – get ready for another bad pun – echo chamber) is determined by a combination of factors. These include the utility that the device(s) hosting the voice(s) have to the users, the quality of the interaction with persona, the ability of third parties to address the capabilities within the voice/command platform, the number and relevance (to consumers) of third parties that use those APIs and the cost of the device and/or interaction service. Absent a mathematical formula (forthcoming), suffice it to say that the more accessible the interface is and the more third parties that provide services through it, as long as the cost is low, the more it will be used, both individually for a variety of services and broadly by many consumers that catch the buzz.

Amazon’s Echo is often billed as a Bluetooth speaker you control with your voice. This totally undersells what it can do, and it belies the “sinister” pervasive strategy Amazon packs behind it. Alexa is the voice persona with Echo, and “she” is always on, which is why Echo (and its sister product, Dot) is wired (Tap, a third product in the set, is wireless and must be physically tapped to initiate listening). This means that you don’t have to reach for a phone or turn on a device for action; Alexa will respond when you say her name as part of a request. And what can you ask her? Anything within and beyond the Amazon cadre of products and services. She’ll play the radio, look up facts and recipes, order music and clothes (all delivered via Prime subscription if you have one, which is likely since estimates suggest nearly 1/3 of Amazon’s also estimated 300M customers do). But Alexa has a broader variety of skills – what Amazon calls the capabilities accessible via Alexa APIs – that stretch throughout your home to enable local or remote voice control over your environment, security, or other aspects. Indeed, Amazon’s penetration into our homes has caused an even wider variety of merchants to take note; for example, Capital One has banking-enabled Alexa, and Ford has promised to offer two-way integration from its cars (buy music or turn on lights from your car or start your car from your living room). And while voice has little to do with Dash, Amazon’s replenishment service that is driven by supplier-labeled buttons you can place throughout your home, it’s clear that Amazon is very attractive to a wide variety of suppliers that are integrating with the company to take advantage of its reach to consumers. Taken together, this sounds like the classic Wal*Mart strategy, only friendlier and with a wider variety of ecosystem touch points that don’t force suppliers into a corner. Further, the cost to me as a consumer? $179.99 to Amazon for which I also receive a really good speaker, but eventually Alexa may be found in my car, on my TV, or other places I frequent. Google voice, Siri and Cortana are also available “free” on my smartphone or laptop, so the cost of entry for consumers ultimately is a tantalizing $0.

This is the dark secret of the Echo and its family of related products. Amazon provides us a strong model to observe in terms of courting consumers with very approachable and value laden services and capabilities (great Bluetooth speaker that’s voice controlled!) that also attracts suppliers and partners as a result, becoming a two-way, self-fulfilling prophecy: if you build it, they will come, and if they come, you can build more. Now, the reality is that it is early days for Echo (we very roughly estimate sales around the 4M mark in the US in 2015), and Google and Apple certainly carry at least as much gravitas among consumers and suppliers. But there are lessons to be learned here for both providers and end user organizations in terms of approach, ecosystem construction, publicity and strategy – in addition to technology – and you should be sure to check with us in the near future for research and advice on same.

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Category: digital-business  iot  

David Yockelson
Research VP
1 years at Gartner
30 years IT Industry

David Yockelson is a Research Vice President on the Tech Go-to-Market and Sales Strategies team in the Technology and Service Provider Research organization.. Read Full Bio

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