Lernout & Hauspie users fear for future

As Lernout & Hauspie Speech Products (L&H) struggles to avoid a possible liquidation, some US users and vendors that rely on the company's speech-recognition software say they are becoming concerned about the future of L&H products.

          As Lernout & Hauspie Speech Products (L&H) struggles to avoid a possible liquidation, some US users and vendors that rely on the company’s speech-recognition software say they are becoming concerned about the future of L&H products.

          Paul Kalish, director of pathology at North Shore University Hospital in Glen Cove, New York, says no other software vendor offers a voice-to-text medical translation system as complete as one developed by Ieper, Belgium-based L&H. He says the cost and difficulty of replacing the software if L&H goes belly-up worries him.

          "There really is no competitor out there that we can turn to in a hurry to replace this system," says Kalish. He adds that he’s dependent on the software for preparing reports after cutting a transcriber’s position from his office’s budget.

          L&H’s future remains uncertain following a December 8 decision by a Belgian court to reject its request for protection under that country’s bankruptcy laws. The company, which also filed for bankruptcy protection in the US, has said it plans to appeal in Belgium. But in a second decision, the court there froze L&H’s assets and appointed a trio of administrators to monitor the company.

          L&H, which has US headquarters in Burlington, Massachusetts, is being investigated by the US Securities and Exchange Commission because of questions about some of its reported sales. And shortly before making the bankruptcy filings late last month, the software vendor discovered that $US100 million was missing from its South Korean subsidiary.

          Jackie Fenn, an analyst at Gartner Group in Stamford, Connecticut, says she expects users and companies that have been considering technology partnerships with L&H to remain at "arm’s length" until L&H’s prospects are clearer.

          Competition Looming

          Not everyone is expressing concern. A spokesman at Intel says the chip maker "has so far been happy with the progress" of an internet application development joint venture with L&H called NavLex.

          But Mark Plakias, an analyst at The Kelsey Group in Princeton, New Jersey, says the bankruptcy filing is forcing users to at least consider alternative technologies. In the US market, L&H has three major competitors: Nuance Communications in Menlo Park, California; Speechwork International in Boston; and Vienna-based Philips Speech Processing.

          NetByTel, a Boca Raton, Florida., vendor that uses L&H’s RealSpeak in a system that lets internet users do business via telephone, is already switching. Paul Robinson, NetByTel’s president, says the company recently signed a deal to replace RealSpeak with a similar product developed by Speechwork International.

          "I think Lernout & Hauspie clearly has had a lot of problems, but one of the biggest is probably that they’re being overshadowed by a better product now," says Robinson.

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