Why did Microsoft buy SwiftKey? Hint: It's not about keyboards

Here's a counter-intuitive one for you. Microsoft acquires one of the best-known vendors making iOS and Android third-party keyboards. But this deal has nothing to do with keyboards.

Microsoft acquires SwiftKey

SwiftKey is an incredible little offering that replaces the native keyboard on an iOS or Android device and makes typing much better. SwiftKey not only has a great "swiping" offering that allows users to type without lifting their finger from the keyboard, but also does amazing things by analyzing a user's typing history (including their emails, social media missives, and text messages) and incrementally learning their usage patterns. SwiftKey then offers predictions for words a user might want to type - with these predictions becoming stronger over time.

Microsoft recently acquired the company for an impressive reported price tag of $250 million. Bear in mind that SwiftKey isn't actually available on Windows Phone, so what is the rationale behind the deal?

Put simply, this is all about artificial intelligence. The seemingly clairvoyant nature of SwiftKey when it comes to typing prediction can be readily implemented into a world of other use cases. SwiftKey is continually sifting through billions of different word and letter combinations, both from an individual and, more generally, in an anonymized way across its entire user base. All of this data is collected and analyzed in an effort to predict what a user is trying to type before they physically enter the words.

This deal is about much more than typing, and it's much broader than a Microsoft-specific acquisition. Artificial Intelligence (or Ai to the cognoscenti) is a massive area of growth, and one in which a huge number of players are investing. From IBM with its Watson technology made famous by winning Jeopardy, to Google with its AI solutions being applied to email scanning and more, AI is the hallowed ground upon which vendors believe future value will be driven. Microsoft's recent offering of a facial recognition service that could intuit a person's emotions based on their facial expressions was one public-facing example of this, but more often we see these sort of AI tools being applied internally to power-specific parts of an application.

It's an area with much acquisition activity. Back in 2014, Google acquired DeepMind for $400 million or so. DeepMind was, coincidentally, another London-based company like SwiftKey. More recently, Apple acquired an image recognition startup, Perceptio. These companies are acquiring these startups to apply their technology to a broad range of their products and services.

While SwiftKey will likely live on, at least in the short to mid-term, as a user-facing keyboard offering, I suspect its technology will end up applied across the Microsoft product line. With this deal, SwiftKey gains the ability to truly become more than a product and morph into being a broad platform play.

Copyright © 2016 IDG Communications, Inc.

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