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Bots are the new apps. ~Satya Nadella


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There are now more than 4.2 million apps available for Android and iOS, but three-quarters of American smartphone users download a grand total of zero new apps per month.

For writer and publisher Tim O'Reilly, the emergence of bots harks back to the earliest days of computing.

"As we move into conversational interfaces we really are moving back into the world of the command line," he explains. The limitations of the command line, with its reliance on explicit prompts, soon saw it usurped. Despite its limitations it remains the simplest way of interacting with a computer. After all, what's more natural than having a conversation?

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O'Reilly describes bots as having "a little sprinkling of AI" rather than relying on a layer of artificial intelligence. "If you look at a bunch of bot toolkits they're really just much smarter versions of branching," he argues.

Growbot is used by 2000 companies?!

One of Evernote founder Phil Libin's investments is Growbot, a messaging bot that listens for and encourages praise on Slack. "The bot is a participant in the conversation that adds structure and functionality," he explains. When Growbot spots praise it reacts, keeps a tally of who's saying what and compiles a report for managers. The company has raised $1.7 million (£1.3m) in two rounds of seed funding and is used by more than 2,000 companies, from Starbucks to London-based advertising agency Spongecell.

Slack, with its focus on teams at work, has become an early pacesetter in an industry still searching for its killer product. In July, it announced a $2 million investment in 14 startups working on bots for its platform. The money is part of a bigger $80 million investment vehicle announced in December 2015 featuring Accel, Andreessen Horowitz and Index Ventures. Since launching in August 2013, Slack's growth has been rapid. It has three million daily active users and 930,000 paying subscribers.

"We have some bots that totally reside within Slack," says April Underwood, vice president of product at Slack. These bots, she explains, are helping people to complete irritating tasks that aren't core to their job: file expense reports, get budget approval or order new office supplies. "Slack allows bots to join the conversation and solve those tasks in a quick way from the application teams that are already in."

Where Slack has already gone, others will follow. "The kind of behaviours that you see in Slack are going to be fundamental to all the Microsoft platforms," argues O'Reilly. "It's how you're going to invoke actions on a computer - whether that's a typed or a spoken conversation probably doesn't matter."

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You've been unwittingly interacting with a bot since 1998 - it's called Google search. So why has software been so stubbornly skeuomorphic?

To make the shift to transformative technology, bots need a substantial back-end.

"There are going to be big cloud platforms that will deliver the fundamental intelligence that makes a lot of bots possible," says O'Reilly. Step forward Apple's Siri, Google's Now and Microsoft's Cortana, all the result of significant investment in artificial intelligence and natural language processing. The huge quantities of data already collected by these platforms will underpin conversational user interfaces as they spread throughout technology.

"If I were Google Cloud Platform or Cortana, I would be out there going, 'OK, how are we going to speech-enable every device that's out there in the world?'" O'Reilly says. "There's going to be a lot of platform-level functionality from the big players, which is going to get better and better. And it will include more and more AI. You already have Azure Machine Learning and Google Cloud Machine Learning and things like that. A lot of things that are complex today are going to be solved by platforms."

"Bots are the new apps," Microsoft CEO Satya Nadella declared in March 2016.

Of all the major technology companies, the Seattle-based firm has made the biggest statement of intent on bots. Its open-source Bot Builder is a gamble, but one that could enable to it become the leading provider of the "fundamental intelligence" posited by O'Reilly.

So what's in it for Microsoft? Whenever a user interacts with a bot built on its platform, even if it is deployed on Slack, Facebook Messenger or elsewhere, Microsoft's AI gets smarter. "The more traffic we see on our system, the more intelligent it becomes," says Derrick Connell, corporate vice president of Microsoft's Bing division.

With its new bot obsession, Microsoft is also looking to China, where it has scored an unlikely success of its own. Since it launched in May 2014, more than 40 million people have held more than 20 billion conversations with Xiaoice, its artificial-intelligence-powered chatbot. "We started with a theory: can we maintain a conversation with another human?" says Connell, who also heads the engineering team that powers the bot. A key measure of the bot's success was how long it could keep the conversation going. "With our first version we were at 12 conversations per session. Three years later we're now up to 23 on average." The bot lives on Weixin and can now understand text, images, video and voice.

In December 2015, Xiaoice's familiar female voice started presenting the morning weather on the popular news channel Dragon TV. She's since moved on to reading the news and has fronted the channel's 2016 Olympics coverage.

Microsoft's other big bot experiment, Tay, was less successful. The bot, based on Xiaoice, was designed to mimic the language patterns of a 19-year-old American girl and learn from interacting with humans on Twitter. Released on March 23, 2016, within a day Tay - having learned from the worst social-media has to offer - was spouting racist and sexually violent messages. Two days later, after more than 96,000 offensive tweets were deleted from Tay, the experiment was taken offline.

Undeterred, in July Microsoft announced a partnership with the Singapore government to develop a bot to handle public services. "If you're a citizen of Singapore you can interact with a bot that works on behalf of the Singapore government. It can answer questions, you can register complaints, you can interact with a bot representative of the government," explains Connell.

Bot monetization:

In October 2009, Apple launched in-app purchases for the App Store. The software industry hasn't looked back. In the second half of 2013 alone, Candy Crush Saga made $1.04 billion from microtransactions. More recently, Pokémon GO, Niantic's runaway-success game, made $35 million from in-app purchases in two weeks. According to analysts IDC, revenue from mobile apps, not including advertising, was around $34.2 billion in 2015.

For bots, the opportunity could be even greater. "Bots have emerged as a high-potential channel of distribution for mobile services," says Guo. Not only do messaging apps have a captive audience, the cost of developing bots is lower than for apps. "The progression from trivial to sophisticated is going to happen faster," says Underwood. "App developers have been able to learn from the introduction of prior interfaces because it wasn't long ago that mobile apps came on the scene. It took a few years in mobile. With bots I think it will happen in half the time."

Libin, one of the bot industry's leading investors, has no doubts about its transformative potential. "There are going to be 100 million bots. It's going to be similar to the app gold-rush, but magnified," he says. As with apps, the vast majority of bots will be pointless, he argues. "But the few hundred that are actually really good are going to be world-changing."

I'm working on a conversational, voice based-app right now.

Sweet. For businesses, for consumers, or both?

For warehouse workers, voice-based.  It's saving them a lot of time. 

That's awesome. How did you know what problem warehouse workers have?!

They had to go back and forth between computer and physical piles of stuff to do their work.

Well kudos to you for seeing that opportunity. I don't know any warehouse workers. 

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