The next big shift in technology that will transform the way we communicate information and interact with our surroundings, including smart objects within the internet of things(IoT) framework, is here: The voice interface. Amazon’s Alexa, launched in 2014, is at the forefront of the ongoing innovation. As a cloud based voice service platform, Alexa powers tens of millions of devices, both from Amazon (Echo, Fire TV, and Fire Tablet) and third parties. This voice service is expected to become the central piece for the e-commerce and the smart home technology.
In the future, people will mostly interact with the machine(computer) and the internet(information) using voices as input. It is a most natural form of communication for humanity. The Alexa technology has vast application.
Outside developers have created more than 30,000 skills for Alexa, allowing the customers to control more than 4,000 smart home devices offered by 1,200 unique brands. Because of the sheer number of possible devices, not necessarily limited to home devices in the future, and the possible skills (or applications, apps), Amazon has to rely on open source innovation to ensure widespread adoption of the platform.
While Amazon is currently the market leader in smart speakers based on the Alexa platform, Google’s Home service has shown triple digit growth in the first quarter of 2018. In order to maintain market leadership and increase adoption both by the end consumer and other device manufacturers/content providers, promoting open innovation is the key for Alexa’s success.
What is Amazon doing to promote open source innovation?
In the short term, because Amazon cannot solely rely on its internal resources to develop all the necessary capabilities, it is relying on open source through collaborative communities and crowd contests to enhance the capabilities of the technology. The resulting functions are called “skills,” being equivalent to apps for smartphones.
To generate interest for rapid development of technology intensive skills for Alexa, Amazon organizes annual contests. This year’s theme was the improvement on human-AI voice interaction through the development of a “SocialBot,” in which dozens of university research teams participated. The total prize money was USD 3.5 million.
Amazon created a collaborative community to actively support the independent and corporate developers creating skills. An array of system called Alexa Skills Kit(ASK) to support the development and launching process is provided. Based on customer engagement, Alexa Rewards are given out as monetary compensation. Developers can also make money through in-skills purchasing and Amazon Pay, which is voice activated purchasing of products and services on the Alexa platform.
In longer term, the deep learning through artificial intelligence is set to overtake the human input in the expansion of Alexa’s skills. Amazon is using deep learning: Alexa takes in all the information and interactions and uses a neural network based on cloud to further enhance its own capabilities. Eventually, Alexa will be able to learn and expand its skills on its own without human supervision.
Currently, it is using a combination of open source and human crowd sourcing: Multilingual Alexa users are investing their time to teach new languages to Alexa. 
In the short term, to increase adoption and hence the appeal of the Alexa platform, Amazon need to enter strategic alliances with key partners to further reinforce the open innovation. While Alexa is leading the home smart speaker market globally, it is experiencing lack of adoption by automobile manufacturers for the smart car infotainment system. It recently announced integration of Alexa with a small number of automakers on a limited scale. Current Echo Auto add-on provides limited functionalities as opposed to Apple Carplay and Google Auto that rely on the networking and processing power of their mobile device. Car infotainment is a crucial piece to the voice service platform dominance for which Amazon is competing against Google and Apple. Because the open innovation is not taking place naturally, Amazon need to make the strategic move to entice auto manufacturers to joint its ecosystem.
In medium terms, Amazon needs to promote language learning of Alexa with the aim of increasing geographic expansion. Currently Alexa speaks only six languages (English, French, German, Spanish, Italian, and Japanese) and the ability to speak the language is essential for the voice service product to expand globally.
To leverage the learning gained from the current large user base and at the same time leverage the local resources for even higher rate of open source innovation, Alexa should adopt new languages and enter the new markets.
How can Amazon achieve the voice service platform dominance against Google (and possible Apple)? What service/product does it need to complement to attract more adoption from the developers/companies/end-users?
How can Alexa enter new markets and expand its user base? What can Amazon do to further facilitate market adoption?
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