3 October, 2015 - 12:21 By Tony Quested

Why Apple paid $50m-$100m for VocalIQ and what it means to Cambridge

Apple’s acquisition of VocalIQ, the fledgling speech technology startup based in Cambridge, is a gamechanger for the UK cluster in so many ways.

A Silicon Valley source tells Business Weekly that Apple has paid between $50 million and $100m for the fledgling business which has had just one funding round – a £750k raising 15 months ago.

That is a stunning acquisitional sum given the relative immaturity of VocalIQ, regardless of the perceived potential of the Cambridge University-spawned technology. Reasons to be cheerful for the Cambridge tech scene now go way beyond 1,2,3.

Firstly, there have been a number of false starts in Cambridge and elsewhere involving speech technology. Credible players arriving on the scene were always likely to provide leverage for global growth in the sector.

No-one really built on the early promise of Entropic – another company inspired by Cambridge dontrepreneur Steve Young – chairman of VocalIQ –  which was bought by Microsoft for an undisclosed sum way back in 1999.

That deal crossed over October-November and there is clearly something in the air at this time of the year in the speech technology space.

It wasn’t until eight years after that – November 1997 – that up popped True Knowledge, founded by William Tunstall-Pedoe, to offer a sophisticated knowledge-based and semantic search engine. Five years after that True Knowledge launched Evi, an artificial intelligence programme that can be communicated with using natural language via an app on iPhone and Android.

Within 11 months – October again – Evi was acquired by Amazon (price undisclosed) which is now hiring a large number of engineers for a Cambridge scale-up of the enterprise.

With Apple being told by industry insiders that it urgently needed to upgrade its own speech solution, Siri, the company took the Amazon route to Cambridge and bought VocalIQ – a magic lamp it can rub to release the genie it believes exists at the heart of Siri.

Microsoft recognised the power of Cambridge University IP years ago but Amazon and Apple could have saved themselves millions of dollars had they engaged at research stage – well before development – with Cambridge University’s many commercially-savvy dons.

So the Cambridge cluster now has Microsoft, Amazon and Apple growing ventures in the speech technology arena – which will accelerate the march of this crucial AI technology across the planet – feeding into the delivery of the Internet of Things as well as other convergence plays.

There is another obvious spin-off benefit. The presence of more US powerhouses in the cluster creates a whole new Transatlantic paradigm at a critical time for startups in both Cambridge and Silicon Valley.

As competition for talent grows increasingly fierce on the Cambridge tech scene, here is a business model based on clicks & mortar rather than bricks & mortar.

The US giants can draw on greater resources, reach and big bucks cash & salary incentives – so if they can’t hire in little ol’ Cambridge, the world is actually their recruitment oyster.

While Cambridge-California is the obvious epitome of this hands-across-the-sea approach  – Qualcomm also has global reach to develop recent Cambridge acquisitions CSR and Nujira while Chinese ICT giant Huawei can spread the net even wider across Asia to leverage the potential of acquired company Neul from its new Science Park base.

To the uninformed and wide-eyed innocent there would also appear to be the potential for collaboration across specific tech areas like speech to encourage convergence plays. But as Apple has frosted the windows of the lower floors of its Cambridge offices so no-one can see in or out, only Spiderman, James Bond or an abseiler with exceptionally keen hearing are likely to get the slightest notion of what Apple and VocalIQ are cooking up from now on.

On a serious note, the growing number of world-leading corporates now established in Cambridge also hands a makeover to the entire face of education and training for careers locally. With coding being driven down to primary school level the will to train skilled engineers has been apparent for some time – now we have big name employers on the doorstep to gear that initiative to, hopefully for generations to come.

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