Spectron Micro signs letter of intent to be acquired by Dialogic

Electronic News, Feb 13, 1995 by Reinhardt Krause

PARSIPPANY, N.J.--Spectron Microsystems Inc.--whose multi-tasking SPOX operating system for signal processing has recently been in the midst of product manuevering by Intel, digital signal processor (DSP) vendors and Microsoft (EN, Jan. 30)--last week signed a letter of intent to be acquired by Dialogic Corp. here.

Dialogic is a leading supplier of PC-based board level products and software in the voice processing market; it promotes the Signal Computing System Architecture (SCSA) standard for connecting telephony equipment. Dialogic's customers include system integrators and OEMs that build platforms to support automated voice processing but are now targeting emerging text-to-speech, speech recognition, and fax/data/modem applications; it recently began marketing SPOX-based boards built around four Texas Instruments' C31 DSPs.

Spectron's decision to merge with Dialogic comes on the heels of Microsoft's decision last month to back away from the Resource Manager Interface (RMI)--a new specification tied to Windows 95 that would have paved the way for DSPs into the PC market. Microsoft handed over development and support responsibility for the RMI to Spectron, whose SPOX multi-tasking operating system for DSPs was the starting point for the RMI's creation under a development pact (EN, July 4, 1994). Spectron is also developing IA-SPOX with Intel to support native signal processing on Pentium and future processors.

Spectron's acquisition last week again caught DSP vendors off-guard with one speculating that Intel was also a prospective buyer of Spectron. Spectron and Dialogic last week said they planned to keep the SPOX technology neutral as many vendors target computer-telephony integration. "Spectron has to be a Switzerland in their industry, they can't be seen as tilting to any specific DSP IC manufacturer or any processing architecture," said John Landau, Dialogic VP of marketing. "If TI had acquired them then Motorola would no longer want to support the operating system more than likely." TI, Motorola, Analog Devices and some other DSP vendors have licensed the SPOX OS; IBM and AT&T, however, have proprietary operating systems.

Asked about Intel having an interest in Spectron, Mr. Landau added: "That would have caused the same type of problem, the DSP guys would have been threatened by that. I have no idea who else they were talking with--I think the fit of our business models is very good. We work with many of the same companies but at different places."

The letter of intent between Dialogic and Santa Barbara, Calif.-based Spectron "contemplates a merger, to be accounted for as a pooling of interests." Terms were not disclosed. Spectron would maintain its independence if the transaction goes through, the companies said.

Bob Dolan, Spectron VP of marketing, said "This will allow us to have a lot more resources than we would otherwise have had. We're in the thick of a lot of different things, many things for a company our size." Mr. Dolan said he expects that Dialogic will "propagate SPOX more within their whole product line."

"No one is taking sides here," Mr. Dolan added. "Intel may take sides, TI might take sides, we want to be open and that is their Dialogic's) philosophy too."

Dialogic's current partners include developers of algorithms supporting voice processing as well as applications such as speech synthesis and recognition. The Antares board includes a firmware kernal that provides integration services. About 15 companies are involved in porting algorithms to Dialogic's new C31-based board, he said.

Mr. Landau said that SPOX would make it easier for the same algorithms to be used across portable communications devices, multimedia PCs, and communications servers. He said hardware platforms could include a SCSA card that has network interfaces, which could scale in size to support a "1,000 line system," or an Intel P6-based server operating under IA-SPOX and host software.

"From a software architecture point of view we want to make the differences minimal," he said, "it's more of an issue of scale, not of rewriting code ... At the desktop and server you want to use the same algorithms: TrueSpeech, the low-bit rate coder that Microsoft has in Windows 95. You want to use that in your voice mail system and your desktop system so you can move the files over the LAN and play it wherever you are. We're going to emphasize more commonality and portability."

Being acquired by Dialogic would enable Spectron to improve its cashflow in order to pursue opportunities in embedded markets such as medical, military and instrumentation and new multimedia markets, Mr. Landau said. "It's people, it's funding, it's infrastructure, it's corporate services like marketing, it's strategic relations with customers. Basically, Spectron is a small company; they've done a superb job. In effect they're a defacto standard and things started to snowball at such a rate that they needed to get bigger."

At TI, DSP marketing manager Gene Frantz said of the Dialogic acquisition: "It's a little bit of a surprise because it's a combination I hadn't expected. The thing I am expecting is for many companies to begin to find other companies that work well together and creating very close relationships."