Alexa Data Analytics are a Gold Mine

Amazon is collecting a massive treasure trove of data from consumers invoking custom skills that’ll drive further disruption

The consumer data derived from the Alexa voice skills is a gold mine for startups like VoiceLabs

“There’s gold in them thar hills and there’s millions in it.” — M. F. Stephenson

The recently published 2017 Voice Report from Adam Marchick is a solid “state of the union on voice platforms” — and you’ll really appreciate the effort and intellectual rigor that VoiceLabs put into their analysis.

Here are my two takeaways from this report:

  1. Alexa-like voice platforms are about to cross-the-chasm
  2. Amazon is sitting on a gold mine of data

In the new space of voice analytics, VoiceLabs is a standout startup offering services that “provide accurate, real-time data to developers about how consumers use their Amazon Alexa skills and Google Assistant Actions.”

The emerging strategy to collect real-time data was referenced in a recent article which describes how analytics startups like VoiceLabs are Scrambling for Alexa Data from Amazon — and rightfully so.

The private questions that consumers “ask” voice platforms generates an extremely valuable data set. At the very least, the consumer data derived from the voice skills provides can be used to create highly accurate profiles of consumers for marketing purposes.

The Value of Voice Data Analytics

For now, Amazon is keeping the majority of the voice data to themselves. And since Amazon has quickly attracted a massive ecosystem to feed the accumulation of that data set, they have a strategic advantage over competing voice platforms — one they know exactly how to exploit.

The most obvious way for Amazon to leverage the voice analytics is feeding the data into their existing consumer models for targeted pricing and and promotions. For example, if someone asks “Alexa, what are the signs of pregnancy” — the customer should also expect to see diapers as an item on their suggested wish-list the next time they go shopping on Amazon.

But the consumer line of smart-speaker devices and the developers building custom skills are just a pawn in Amazon’s longer-term strategy. Amazon is playing chess and positioning Alexa as the Queen — while everyone else is getting played, or at best, playing checkers.

Amazon can lead a horse to water better than anyone in the industry

Woo the Developers, Then Woo the Enterprise

With over 5M units of Amazon’s smart-speaker devices sold in the past two years, there is an army of users interacting daily with custom-developed Alexa skills. As Amazon builds toward critical mass, it’s hard to bet against their domination of the voice platform — just as Amazon’s AWS has dominated the cloud industry since 2007.

Similar to how Amazon’s cloud strategy evolved from the developer community to the enterprise, AWS will follow a similar pattern from consumer to enterprise dominance with their Alexa voice platform.

When AWS introduced their first set of cloud services, they were geared almost exclusively toward the 180,000 members of their development community. Since 2007, AWS has grown exponentially as it’s strategically cycled iteratively through a series of innovate → leverage → commoditize (ILC) cycles. Each cycle create new services — enabling AWS to move up their value chain and step closer to the needs of enterprise customers.

And with the introduction of Lambda, it’s now possible for AWS to move services even faster through the ILC cycle since underlying functions supporting new services are essentially commoditized as they’re innovated.

After years of moving up the value chain with higher level abstraction of services, AWS is now clearly focused on features that woo the enterprises instead of the developers — such as Snowmobile and Managed Services Program. Nobody should be surprised when the exact same strategy plays out with Alexa.

Amazon ‘s experience with AWS will be a key differentiator in their dominance of voice platforms

This Isn’t Amazon’s First Rodeo

While Amazon harvests usage patterns and strategic insight from their voice platform, the flow through the Innovate-Leverage-Commoditize (ILC) cycle should seem very familiar to the early days of AWS.

  • Amazon’s Alexa innovative voice platform is first to market (i.e. AWS).
  • The initial Alexa platform has enough minimal viable features on the development portal to attract an ecosystem of developer (i.e. EC2, S3).
  • The development community and Alexa Dev Champions are enticed by compelling features, and free T-shirts, to leverage the platform and build custom skills (i.e. web sites).
  • AWS monitors their usage patterns and leverages the learnings to drive further innovation and commoditization (i.e. Jeff Barr daily blogs).
  • Rinse and repeat.

Every time an Alexa skill is invoked, Amazon learns — each utterance sharpening the machine learning and artificial intelligence capabilities.

The FUD is Real

With feature-rich IaaS and PasS offerings now available from AWS, migrating a corporations on-premise data centers into their cloud is not a matter of ‘if “ — but “when”. Everyone knows that customer’s don’t give a shit about your data centers.

In similar fashion, AWS will leverage the voice data analytics from consumer Alexa skills to fuel their longer-term strategy — enterprise call centers.

With voice services, their target just moves down the street from the data center — to corporate call centers. The recent AWS releases of the Polly, Lex, and Rekognition services services offer compelling features that are early indicators of a viable strategy.

In the coming years, expect to hear lots of familiar Fear, Uncertainty, and Doubt (FUD) derived from cloud adoption and reapplied to the call center industry as thought leaders declare all the reason why this won’t work — probably starting with security issues. This phase will be followed by nervous sales teams casting doubt on the viability of machine learning and artificial intelligence for call centers.

swardley offers a simple yet effective illustration of how FUD impacts enterprise adoption

Ultimately, we’ll know when the AWS strategy has succeed when incumbent vendors start proposing hybrid call-center solutions. The final sign of success is when all the engineers are arguing about the term callcenterless — and every article starts with “first and foremost, there are still call centers in a callcenterless architecture”.

Let’s just hope the companies we are patronizing have already migrated their call centers to AWS voice platforms at that point. Then we can all finally stop yelling “representative” to get actual service through voice channels — instead we can just ask Alexa.

Alexa Data Analytics are a Gold Mine was originally published in A Cloud Guru on Medium, where people are continuing the conversation by highlighting and responding to this story.