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No. 9 overall | No. 1 technology company

Nuance leads way in voice recognition

The Burlington company’s software lends an ear to users of the latest high-tech gadgets.

Nuance’s Gary Clayton envisions broader applications for its technology.

Suzanne Kreiter/Globe Staff

Nuance’s Gary Clayton envisions broader applications for its technology.

When Gary ClaytoN Talks to his gadgets, his gadgets pay attention.

He might ask his iPhone to find an Indian restaurant in Boston — it will reply with a few options — or instruct his computer to take a memo without touching his keyboard.

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Clayton’s company, Nuance Communications Inc. of Burlington, has pioneered that kind of computer wizardry. But the future of voice recognition technology could soon make controlling devices with speech seem mundane, said Clayton, Nuance’s chief creative officer.

He envisions a not-too-distant future when we’ll all have nearly ubiquitous access to our own, personalized virtual assistants — embedded in smartphones, maybe on watches or wristbands, built into our cars, and inside homes.

“You are going to form a relationship with them, and when they aren’t there, you’re going to miss them,” said Clayton.

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Think HAL 9000, but less manipulative.

Nuance has become the dominant player in speech recognition technology, which is showing up in Apple iPhones, Ford automobiles, and Panasonic televisions.

As a result, its revenue rose about 25 percent last year, and Nuance landed at number nine on this year’s Globe 100 list of public companies in Massachusetts.

The company, which now has 12,000 employees worldwide, has grown largely through an insatiable appetite for acquisitions. Since 2003, it has bought about 40 companies, and it made some of its most expensive deals in 2012, including the $300 million purchase of Transcend Services Inc., an Atlanta medical documents company.

Its acquisition activity has taken a toll on the company’s profit margins in years past, but many investment analysts say Nuance could be the prime benefactor if speech technology really takes hold. In fact, the company attracted the interest of billionaire investor Carl Icahn, who bought a 9.3 percent stake in April.

“Understanding language is one step. Understanding human subtleties — that’s a long-term process,” Gary Clayton said.

Suzanne Kreiter/Globe staff

“Understanding language is one step. Understanding human subtleties — that’s a long-term process,” Gary Clayton said.

While Nuance generated lots of buzz with mobile apps and talking cars, the biggest part of the business involves health care. Hospitals around the country use Nuance software to keep track of medical records and transcribe doctors’ notes about their patients.

The basics of speech recognition — computers translating spoken language into written text — underpin every aspect of Nuance.

That technology has been around for decades, and some of the pioneers in the field have come from the Boston area. Local technologists James and Janet Baker, for instance, first marketed the Dragon NaturallySpeaking software that Nuance sells today.

While software has gotten much smarter about understanding speech and the meanings of sentences and words, the technology is still evolving, said Vlad Sejnoha, Nuance’s chief technology officer.

“Understanding language is one step. Understanding human subtleties — that’s a long-term process,” he said. But he said that as it improves, “language is going to be the ideal way to interface with devices.”

The company is redoubling research and development efforts. It will open a new engineering center this summer in Cambridge, adding to a group of speech technology experts it acquired when Nuance bought Vlingo Corp., a local start-up, last year for $200 million.

The biggest question facing Nuance is whether more people than just early tech adopters really want a talking virtual assistant inside their wristwatches or smartphones.

“Over time, there are talks of adding sentiment to voice technology so that your device will recognize what mood you are in,” said Carolina Milanesi, a consumer technology analyst at Gartner Inc. “As geeky as it might sound, I am sure advertisers will be happy to know when the best moment is to sell you something.”

Michael B. Farrell can be reached at michael.farrell@globe.com.
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