Amazon and Microsoft join forces to take on voice market (AMZN, MSFT)

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Amazon and Microsoft announced a partnership Wednesday that will allow Alexa and Cortana — Amazon's and Microsoft’s respective voice assistants — to communicate with each other across a range of tasks. Users will be able to ask Alexa to open Cortana through the Echo, or Cortana to open Alexa through the Microsoft 10 platform.

As the race to build the most intelligent assistant heats up, the Amazon-Microsoft partnership represents a shift in the outlook of the voice assistant market.

There are two major advantages of combining forces in the voice assistant space:

• The partnership will likely help Amazon and Microsoft gain an advantage over their closest rivals, Google and Apple. Google and Apple wield massive reach via their operating systems — the two accounted for roughly 99% of smartphones shipped in Q4 2016 — giving them a major competitive advantage for voice assistant adoption. By joining forces, Amazon and Microsoft could augment their voice assistant reach.
• Each assistant satisfies a particular niche that can work to complement the other to improve the overall user experience. Alexa users will be able to access Cortana’s deep integration with the Office Suite, enabling them to schedule meetings, access calendars, set reminders, and even read work emails. Cortana can access Alexa’s 20,000 skills, complete shopping orders through Amazon, and use Alexa to control smart home devices.

Looking ahead, a more open, cross-platform strategy could help the overall voice assistant ecosystem become less fragmented, allowing for the exchange of different capabilities. The nascent space has a number of tech companies vying to outdo one another as they compete for the same consumer pool. But this closed ecosystem could inhibit the adoption and usage of voice, regardless of the size of individual tech companies, because they all have distinctive capabilities and partnerships. Allowing multiple voice assistants to communicate and be accessed on devices will make the technology more valuable to customers and brands. 

Amazon and Microsoft aren’t alone in pursuing an open voice ecosystem. Amazon CEO Jeff Bezos is open to the idea of collaborating with both Apple and Google in the future, and Essential CEO Andy Rubin foresees cross-platform communication as key to ambient and voice computing.

Nevertheless, it could be in Apple’s and Google’s best interest to keep their assistants separate to ensure their respective mobile software, iOS and Android, remain competitive as the next wave of smart technology arises.

Advancements in a bevy of industries are helping intelligent digital voice assistants like Apple's Siri and Amazon's Alexa become more sophisticated and useful pieces of technology. 

Advances in artificial intelligence (AI) are allowing them to accurately understand more information, while upgrades to mobile networks are facilitating quick transfers of data to robust clouds, enabling fast response times. In addition, the swell of internet connected devices like smart thermostats and speakers is giving voice assistants more utility in a connected consumer's life. 

However, there are still numerous barriers that need to be overcome before this product platform will see mass adoption, as both technological challenges and societal hurdles persist. 

Jessica Smith, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the voice assistant landscape that:

• Identifies the major changes in technology and user behavior that have created the voice assistant market that exists today. 
• Presents the major players in today's market and discusses their major weaknesses and strengths. 
• Explores the impact this nascent market poses to other key digital industries. 
• Identifies the major hurdles that need to be overcome before intelligent voice assistants will see mass adoption. 

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