Amazon won the 2016 chat wars, but Microsoft isn’t far behind

At the start of 2016, Facebook, Microsoft, Amazon, and Apple had no publicly known plans to create an ecosystem for bots. There was no Microsoft Bot Framework, no Facebook Messenger bot platform, no iMessage App Store, and no Lex Framework from Amazon.

Then a whole lot changed. After some of the deepest pockets in tech fought for ground with businesses, developers, and consumers, it’s worth asking: Who won the 2016 chat wars?

Bigger battles are sure to take place in 2017, but this year, Amazon came out on top.

Why?

Mainly because of the domination of Alexa. The AI assistant made immense progress this year, both in its AI smarts and in its success as a commercial product.

Alexa is helping Amazon stand strong

When the first Echo became available in late 2014, it was a little-known product made by Lab126, Amazon’s hardware division. By April 2016, Amazon CEO Jeff Bezos posited that Alexa could be the fourth pillar of the Amazon business, together with AWS, Amazon Prime, and its massive retail marketplace.

Amazon doesn’t share sale figures, but it’s estimated that more than five million Alexa-enabled smart speakers have been sold so far, and that was before a 900 percent year-over-year increase in Echo sales this holiday season, according to Amazon. Alexa device sales were so high they sparked a surge in downloads that shot the Alexa iOS app into the top 10 of free apps.

Above: A lamp coming soon from General Electric incorporates Amazon’s Alexa.

Image Credit: General Electric

Many devices that weren’t created by Amazon also integrated with Alexa. The Nucleus home intercom system, CoWatch smartwatch, this vacuum, and a General Electric lamp that looks like something from Tron will use the Alexa software development kit (SDK). A home robot and many other devices also have plans to integrate Alexa.

And in actual commerce, Amazon is way ahead of its competitors. This summer, Alexa got the ability to order millions of items from the Amazon retail marketplace. Alexa is now taking hands-free orders from customers, who are likely very used to the Amazon retail experience.

They’re already selling things to people, and that’s damn powerful.

Google, Apple, and Microsoft don’t have that sort of relationship with their customers, and Cortana, Siri, and Google Assistant lack the ability to make purchases today. Technically, Google Assistant can buy you a pizza, but it only works when you create a pre-order template with Domino’s.

Amazon’s AI assistant also got smarter this year. Alexa started the year with about 100 skills. Today, there are more than 7,500 integrations available to complete an absurd amount of tasks. You can control a car, run smart devices in your home, and send messages to friends.

Oh, and all those skills can now be downloaded or linked to in the Alexa Skills Marketplace, a single place to find every bot available. Competitors like Facebook and Microsoft haven’t gotten hip to this yet.

For developers, the Alexa Skills Kit got a major upgrade this year, adding hundreds of built-in commands. The final icing on the 2016 cake is Amazon’s first deep learning products and the Lex Framework.

Lex is a toolkit with natural language understanding for making text or voice-enabled bots for platforms like Facebook Messenger and Slack that comes from the technology used to create Alexa.

A close second to Amazon in the 2016 chat wars has got to be Microsoft.

Microsoft is coming up

Microsoft started the year being called a company on the rebound, after missing the app and smartphone boats. That conversation appears to be over, in part due to a well-executed bot strategy.

Well, after one of the biggest public relations disasters in recent tech history, that is.

Just days before the launch of the Microsoft Bot Framework with CEO Satya Nadella’s assertion that conversation is the future of computing, the chatbot Tay had to be shut down for spewing racist, misogynistic, anti-Semitic hate on Twitter.

Tay’s very public failure seemed to overshadow Microsoft’s framework, and could have resulted in a contraction by Microsoft.

That didn’t happen.

Instead, Nadella became a high-profile evangelist of bots, conversational computing, and artificial intelligence made available through Microsoft Cognitive Services.

Bots and human language will become the new user interface, Nadella said.

“Pretty much everyone today who is building applications, whether they be mobile apps or desktop apps or websites, will build bots as the new interface, where you have a human dialogue interface versus menus of the past,” Nadella said in July at Microsoft’s Worldwide Partner Conference.

The bot framework slowly expanded and took on a true multi-channel strategy, adding integrations with Facebook Messenger, Kik, Slack, and in recent weeks, Microsoft Teams, and Cortana.

On the research side, Microsoft achieved parity with human speech recognition in October. In that same month, Lili Cheng of Microsoft Research, who led teams in charge of the creation of Tay, talked with VentureBeat about the possibility of the return of Tay in another form (meet Zo), and the creation of a common bot search engine so that the best bots — regardless of platform — could surface.

In 2016, the Microsoft Bot Framework appears to have edged out much of its chat app competition in the arena of attracting developers.

We don’t know exactly how many bots have been made for Skype or with the Microsoft Bot Framework, but earlier this month Microsoft said more than 78,000 developers are now using its bot framework and cognitive services, more than double the 34,000 developers creating bots for Facebook Messenger.

The Azure Bot Service also launched this year to place bots in the cloud and make bot management easier for developers.

Finally, earlier this month Cortana began to compete seriously with the likes of Alexa, Siri, and Google Assistant. A Cortana Skills Kit will launch soon, allowing developers to convert each bot made with the Microsoft Bot Framework into Cortana commands. A Cortana SDK is also underway, so it will enter mass market devices just like Alexa in devices like next year’s possible Echo competitor from Samsung’s Harman Kardon.

The real secret sauce — the major key, if you will: Cortana is already everywhere. More than 145 million people have it inside their Windows computers and devices.

Add in Microsoft’s AI prowess and the company seems well positioned to make big waves next year.

Amazon edges out Microsoft because the power of its AI assistant to compete with others is not something that could happen or is scheduled to take place. It’s already happening. Millions of Alexa devices have already been sold, and Amazon already has millions of products available for sale through its marketplace.

Behind Amazon and Microsoft come Facebook, Google, and Apple.

Facebook, Google, and Apple are plotting

Facebook Messenger, the second largest chat platform on Earth, made a lot of changes this year.

Buttons, menus, and cards were added to the Messenger bot platform, along with other changes to give Messenger bots more options. Promotion and marketing, forbidden for the first months of the bot platform, is now possible on Messenger. The ability to accept payments was also added this fall. Each of these changes is fundamental to Facebook’s long-term ambition to reshape conversations between businesses and customers.

Look for more on this front in 2017, especially from that other chat platform Facebook owns. In late August, WhatsApp committed to opening its service to more businesses in “the months ahead.” With 1.2 billion monthly active users, WhatsApp is the biggest chat platform on the planet.

On the intelligent assistant front, Messenger’s AI assistant M, under development for more than a year now, is expected to be made available to more users in 2017. And a few weeks back, we saw the premiere of Jarvis, the AI assistant Mark Zuckerberg made for his home using the voice of Morgan Freeman. Jarvis will be available to the public in the future, Zuckerberg said.

Whether it was done to show off Zuck’s new tool or to get more attention for Facebook’s AI and chatbots, the Jarvis announcement got Facebook some press for its AI assistant at a time when all eyes were on Alexa and Google Assistant.

Google also had a strong year.

A day before it launched Allo, Google acquired API.ai, a platform used to create bots and intelligent assistants by more than 60,000 developers. Gupshup and partners like Dashbot also came on board to help people build and analyze their Google Home actions.

Google Home came out in October, and the Google Assistant platform debuted earlier this month and will extend to Pixel smartphones and the Allo chat app next year.

Dozens of actions, the Google Assistant equivalent of Alexa skills, ranging from WebMD to Domino’s to CNN have already launched. More are on the way.

Perhaps most importantly, a lot of people believe Google Assistant is the supreme assistant, the killer bot that’s better than the rest. But it’s early days.

How Google plans to put bots inside SMS on Android devices is a big, unanswered question we’re likely to hear more about in 2017.

If Amazon and Microsoft are the winners of the 2016 chat wars, Siri might be the loser. Many tests have found Alexa and Google Assistant to be superior to Siri, and momentum is clearly not on Apple’s side. Have you heard anybody talk about the fantastic things you can do with Siri since third-party integrations became possible in September? I didn’t think so.

Most of this year was a ramp-up — the launch of bot platforms and ecosystems. In the year to come, every one of the tech giants mentioned in this article will be well armed in the fight to occupy your home, your car, your workplace, and the chat apps we all use to communicate.

Now the real fight begins.