A Developer’s

Guide to Building
AI Applications
Second Edition

Create Your First Conversational

Application with Microsoft Azure AI

Elaine Chang & Darren Jefford

REPORT
 SECOND EDITION

A Developer’s
Guide to Building
AI Applications
Create Your First Conversational
Application with Microsoft Azure AI

Elaine Chang and Darren Jefford

Beijing · Boston · Farnham · Sebastopol · Tokyo

A Developer’s Guide to Building AI Applications
by Elaine Chang and Darren Jefford
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978-1-492-08058-9
[LSI]
 Table of Contents

Foreword ................................................................................ vii

A Developer’s Guide to Building AI Applications ........................1

Introduction ...................................................................................... 1
The Intersection of Data, AI and the Cloud ..................................... 3
Microsoft Azure AI .......................................................................... 5
Conversational AI ............................................................................ 6
Core Features of Virtual Assistants................................................ 17
Developing Your Virtual Assistant ................................................ 23
Connecting Assistants to Clients and Channels ............................. 24
Optional: Adding Intelligence to Your Assistant with Skills ......... 26
Enabling Analytics for Your Virtual Assistant ............................. 27
Roadmap and More Resources....................................................... 29
Building Responsible AI ................................................................ 30

iii
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v
 Acknowledgements

We would like to thank the following individuals at Microsoft who

contributed to the report as advisers and technical reviewers:
Lili Cheng, Anand Ramen, Ben Brown, Chris Mullins, Cindy
Noteboom, Deborah Harrison, Dewain Robinson, Em Ivers, Lauren
Mills, Patrick Volum, Robert Standefer, Ryan Lengel Isgrig, Steve
Sweetman, Ted Li, Tyler Mays-Childers, William Mendoza and
Prem Prakash.
v
 Foreword

The creators of the modern computer wanted to augment human

intellect and expand our capabilities beyond the limitations of our
collective brainpower. When researchers and computer scientists in
the 1950s conceived of the ‘thinking computer’, they started a rapid
evolution toward AI, laying the groundwork for technology that
would have a tremendous impact on the world for decades to come.
AI is now everywhere. People do not even realise that AI is powering
their experiences. While AI is now present in practically everything
we use, from thermostats to sprinkler systems, it is also powering
opportunities in new frontiers, such as autonomous vehicles,
pharmaceutical research and precision agriculture. AI is an exciting
frontier for developers to create powerful and innovative ways to
approach hard-to-solve problems.
While AI was once solely the domain of researchers and institutions,
the recent availability of AI infrastructure, platforms and services
means that all the power of AI is now available to developers to build
solutions with intelligence. Cloud AI services and tools make
developing AI-powered solutions possible – including machine
learning, knowledge mining, intelligent agents and pre‐ trained
models – without requiring specialised knowledge.
The past few years have seen a leap in the adoption of AI, catalysed
by vast amounts of digital data, application services and enormous
computing power. As a result, AI technologies such as natural
language understanding, sentiment analysis, speech recognition and
image understanding can now power applications across a broad
range of industries.

Foreword | vii
One of the most compelling applications of AI is in making our
everyday lives better and easier. Since the development of
computing, people have envisioned having meaningful dialogues
with computers, expressing our needs and ideas in the ways we
communicate with each other using natural language: say something
to the computer, and it would respond to you. Conversational AI
shifts the interaction model from domain-specific, machine-driven
commands to conversational interfaces that focus on people and
expression. With conversational AI, developers can make computers
communicate like people, by recognising words, understanding intent
and responding in ways that feel natural and familiar.

– Lili Cheng, Corporate Vice President

Microsoft Conversational AI

viii | Foreword
 A Developer’s Guide to
Building AI Applications

Introduction
In this book, we look at the requirements for applying well-tested AI
solutions to everyday problems. To help you explore the possibilities
of AI, we will show you how to create a Virtual Assistant, a
conversational AI application that can understand language, perceive
vast amounts of information and respond intelligently. Along the
way, we will share the many AI resources and capabilities that are
available to developers.
Here is a roadmap to the contents of this book:
‘The Intersection of Data, AI and the Cloud’
This section explains the technological basis for this book and
why these technologies are increasingly offered in the cloud.
‘Microsoft Azure AI’
This section introduces the Microsoft Azure AI platform with a
variety of services, infrastructure and tools to empower
developers to build AI apps and agents and add knowledge
mining and machine learning capabilities. This book focuses on
conversational AI applications and provides pointers to
additional resources for other areas of Azure AI.
‘Conversational AI’
This section discusses the evolution of natural language
processing, Microsoft’s Language Understanding service
(formerly named LUIS) and Bot Framework ecosystem,
common use cases of conversational AI and the development life
cycle of conversational AI applications.

A Developer’s Guide to Building AI Applications | 1

‘Core Features of Virtual Assistants’
This section highlights core features of Virtual Assistants,
including complete control for developers, prebuilt and reusable
Conversational Skills, flexible integration and contextual
awareness, business insights captured and distributed,
multimodal input, Adaptive Cards and enterprise capabilities.
Bot Framework Virtual Assistant solution accelerator brings
together best practices to enable organisations to deliver
advanced conversational Assistant experiences tailored to their
brand, personalised to their users and made available across a
broad range of apps and devices.
‘Developing Your Virtual Assistant’
This section provides guidance for creating your conversational
AI application with Virtual Assistant solution accelerator, with
pointers to online tutorials.
‘Connecting Assistants to Clients and Channels’
This section provides guidance for connecting your
conversational AI application to clients and channels. A wide
variety of channels and adapters are offered by Microsoft, letting
your conversational experiences reach your end users wherever
they are.
‘Optional: Adding Intelligence to Your Assistant with Skills’
This section introduces Skills, a way to plug in features from the
platform to your conversational experiences, with pointers to
online tutorials.
‘Enabling Analytics for Your Virtual Assistant’
This section provides guidance for setting up analytics tools for
your conversational AI application. Insights from the analytics
dashboard of your conversational AI application can suggest
important improvements for its effectiveness and performance.
‘Roadmap and More Resources’
Learn more about Microsoft’s future investment in
conversational AI.
‘Building Responsible AI’
We will conclude with a discussion of how the Azure AI
platform encourages developers to create responsible and
trustworthy solutions that treat people fairly.

2 | A Developer’s Guide to Building AI Applications

The Intersection of Data, AI and
the Cloud
Today we are enabling computers to learn from vast amounts of data
and to interact and respond more naturally with the world, rather than
following preprogrammed routines.1 Consider the following
capabilities of modern software:
Computer vision
The ability to ‘see’ by recognising objects and their relationships
within a picture or video, creating data from the physical
environment.
Speech Recognition and Synthesis
The ability to ‘listen’ by understanding the words that people say
and to transcribe them into text, and in reverse, to read text aloud
in a natural voice.
Language Understanding
The ability to ‘comprehend’ the meaning of words and respond,
considering the many nuances and complexities of language
(such as slang and idiomatic expressions). When computers can
effectively participate in a dialogue with humans, we call this
conversational AI.
Knowledge
The ability to ‘reason’ by representing and understanding the
relationship between people, things, places and events.
How do these capabilities feature in enterprise applications? Through
machine learning, AI-powered applications reason by unlocking
large amounts of varied data – data that has been collected over time
across repositories and held in massive datasets. These AI systems
understand and create meaning in unstructured data such as email,
chats and handwritten notes, all of which could not have been
previously processed by computers. More important, these systems
are now interacting with customers and engaging them in different
channels, in ways that can be hyperpersonalised.

1 Lili Cheng, ‘Why You Shouldn’t Be Afraid of Artificial Intelligence’, Time, January 4,
2018, https://ti.me/2GEkknZ.

The Intersection of Data, AI and the Cloud | 3

By applying these capabilities, businesses are using AI-powered
applications to digitally transform every aspect of their organisation.
They are transforming their products through insights from customer
data. They are optimising business operations by predicting
anomalies and improving efficiencies. They are empowering their
employees through intelligent tools and engaging their customers
through conversational agents that deliver more customised
experiences.
To design technology for humans, it is important to understand the
context of how people work, play and live. Current AI solutions
complement and unlock human potential and creative pursuits. And
such tailored solutions must also be able to learn from and adapt to
new external conditions, just as humans do.
One of the most fascinating areas of research is bridging emotional
and cognitive intelligence to create conversational AI systems that
model human language and have insight into the sometimes illogical
and unpredictable ways humans interact. According to Lili Cheng,
Microsoft’s corporate vice president of conversational AI, “This
likely means AI needs to recognise when people are more effective
on their own – when to get out of the way, when not to help, when
not to record, when not to interrupt or distract.”2
Because datasets are growing, and because they vary wildly in size,
it is becoming more important to offer developers quick access to
flexible options for both storage and processing. Thus, organisations
are turning more and more toward the cloud, which provides this
range and flexibility. In addition, cloud vendors pack a rich and
powerful toolbox to enable the AI capabilities we have discussed.
Enormous connectivity allows any type of connected device to bring
massive amounts of data into the cloud on a real-time basis for
analysis and intelligent processing at scale. For developers, the cloud
provides the necessary infrastructure and tools to offer enterprise-
grade security, availability, compliance and manageability for the
business applications and services.

2 Lili Cheng, ‘Why You Shouldn’t Be Afraid of Artificial Intelligence’, Time, January 4,
2018, https://ti.me/2GEkknZ.

4 | The Intersection of Data, AI and the Cloud

Microsoft Azure AI
Microsoft’s Azure AI platform aims to bring AI to every developer
and to empower developers to innovate and accelerate their projects
with a variety of services, infrastructure and tools. Azure AI supports
a variety of use cases and targets different levels of expertise and
desired ways of working. For example, Azure offers the Azure Bot
Service and Bot Framework SDK enabling developers to build rich
conversational experiences. Additionally, Azure Cognitive Services
offers developers domain-specific AI services available as APIs to
build applications that can see, hear and understand. Azure Machine
Learning allows developers and data scientists to build custom AI
models, with investments in the necessary hardware and
infrastructure to support deep learning and machine learning
framework and tools.
AI apps and agents
The industry-leading AI models being used today in Microsoft
products such as Office 365, Teams, Dynamics 365, Cortana,
Xbox, HoloLens and Bing are available to your own apps
through a platform of democratised cognitive services. Some of
these models can be customised with your own data and run both
offline and online.
The book Building Intelligent Apps with Cognitive APIs
provides a closer look at what’s behind apps that see, hear, speak,
understand and interpret people’s needs.
The Azure Bot Service, along with the Bot Framework, enables
developers to build advanced conversational experiences. The
new Power Virtual Agents offering, available as part of the
Power Platform, is built on top of Bot Framework and empowers
non-developers to create conversational experiences and
compose with other Bot Framework components.
Knowledge mining
Azure Cognitive Search works across many types of data to
transform unstructured information into searchable content.
Extract insights and structured information, discover patterns
and relationships, reveal sentiment and more.
The white paper ‘Extracting Actionable Insights from All Your
Content’ covers how knowledge mining works, use cases,
industry-leading solutions and additional resources for those who
want to get started with knowledge mining.

Microsoft Azure AI | 5
Machine learning
Developers can get access to the advanced machine learning
capabilities of the Azure AI through Azure Machine Learning
(AML) services. AML is a managed cloud service where you can
train, manage and deploy models in the cloud or to edge devices
using Python and tools like Jupyter notebooks. You can even
deploy TensorFlow image classification and recognition models,
using a variety of deep neural networks, to Microsoft’s Project
Brainwave FPGA hardware in Azure for inference and training,
which offers extremely high-scale throughput and low latency.
The book Thoughtful Machine Learning with Python: A Test-
Driven Approach provides a starting point for AI programming
that can be useful for readers interested in using AML.
To help you get started with Azure AI, you can leverage the resources
available on the Azure AI website.
In this book, we will be focusing on showing how you can build a
conversational AI application using Bot Framework.

Conversational AI
Natural language processing (NLP) gives computers the ability to
read, understand and derive meaning from human language. Since
the 1950s, computer scientists have been working on the challenges
of NLP, but limitations in computing power and data sizes hindered
advancements in processing and analysing textual components,
sentiments, parts of speech and the various entities that make up
natural language communication.
That changed in the 2010s. Advances in cloud computing, machine
learning and the availability of vast amounts of text and
conversational data from messaging systems, social media and web
chats have helped us make immense progress in NLP. The
advancements in NLP have made it possible for computers to not
only identify words in text but also to understand the meaning behind
those words and the relationships between them.

6 | Conversational AI
NLP works by analysing a large body of human-generated text and
turning it into machine-readable data. NLP identifies and extracts key
metadata from the text, including:
Entities
NLP identifies entities in text like people, places and things.
Entities can also be pieces of information requiring special
extraction, such as dates and times.
Relations
NLP identifies how entities are related using semantic
information.
Concepts
NLP extracts general concepts from the body of text that do not
explicitly appear. For example, the word ‘excel’ might return
concepts like ‘productivity tools’ and ‘numbers’, even if these
terms do not appear in the text. This is a powerful tool for making
connections that might not seem obvious at first glance.
Sentiment
NLP scores the level of positivity or negativity in the text. This
is useful, for example, to gauge sentiment related to a product or
service. Or, in a customer support context, this functionality is
helpful when determining whether to route a chat to a human
(upon detecting negativity).
Emotions
This is sentiment analysis at a finer granularity. In this case, NLP
classifies not just ‘positive’ and ‘negative’, but ‘anger’, ‘sadness’
and ‘joy’.
Keywords
NLP extracts keywords and phrases to use as a basis for indexing,
searching and sorting.
Categories
NLP creates a hierarchical taxonomy for what the data is about
and places this taxonomy in a high-level category (text
classification). This is useful for applications like recommending
relevant content, generating ads, organising emails and
determining the intent of a user.
In the past, you might have tried to simulate NLP-style capabilities
through rule-based approaches, such as regular expressions or

Conversational AI | 7
decision trees, which struggled at scale to understand the intent of
questions from a human. Or you might have used custom machine
learning models, which required access to specialised expertise, large
datasets and complex tools, limiting their implementation to only
large organisations with the resources to invest.
Now, consider where we are today. Easy-to-use APIs in the cloud
provide NLP capabilities that are powering the widespread use of
conversational AI. From the rise of open source tools to the arrival of
cloud APIs, NLP capabilities that were once solely in the domains of
academia and the research community are now available to a wider
audience across industries.

Language Understanding (formerly named

LUIS)
Language Understanding, a service developed by Microsoft, enables
developers to build applications that can take user input in natural
language and extract structured information, including meaning and
intent. Language Understanding is a machine learning–based service
to build natural language experiences, and it enables you to quickly
create enterprise-ready, custom models that continuously improve.
With Language Understanding, you can use a prebuilt model (e.g.,
weather, calendar), customise an existing one or build your own from
scratch. A model begins with a list of general user intents that
represent the tasks or actions the user would want to perform, such as
‘book a flight’, ‘schedule meeting’ or ‘contact help desk’. After you
identify the intent, you provide example phrases, called utterances,
for the intent. Then, you label the utterances with the specific details
you want Language Understanding to pull out of the utterance. The
data that is pulled out of the utterance is an entity.
An entity represents detailed information that is relevant in the
conversation. By recognising and labelling the entities that are
mentioned in the user’s input, Language Understanding helps you
choose the specific action to take to answer a user’s request. You can
define your own entities, such as domain-specific terminology, or
extract prebuilt common entities, such as dates and times, proper
names, measurements and numbers. With prebuilt domains, you have
a set of entities and utterances for common categories like calendar,
entertainment, communication and home automation.

8 | Conversational AI
Language Understanding also allows developers to continuously
improve the app through active learning. Language Understanding
stores user queries and selects utterances that it is unsure of. You can
then review the utterances, select the intent and mark entities for real-
world utterances. This retrains the language model with more data.
The service integrates with other AI tools in the cloud to power
natural language processing and understanding in apps, bots and
Internet of Things (IoT) devices. Through its Bot Framework,
Microsoft incorporates Language Understanding and other cognitive
services for the development of bots.

Bot Framework Ecosystem

Microsoft Bot Framework (Figure 1) has an ecosystem of tools and
services that provide a comprehensive experience for building
conversational AI applications.

Figure 1. Bot Framework ecosystem

With Bot Framework SDK, developers can easily model and build
sophisticated conversation using their favourite programming
languages. Developers can build conversational AI applications that
converse free-form or can also have more guided interactions where
the application provides user choices or possible actions. The
conversation can use simple text or more complex rich cards that
contain text, images and action buttons. Developers can add natural
language interactions and questions and answers that let users interact
with bots in a natural way.
Azure Bot Service enables you to host intelligent, enterprise-grade
conversational AI applications with complete ownership and control

Conversational AI | 9
of your data. Developers can register and connect their bots to users
on Microsoft Teams and Web Chat, Facebook Messenger and more.
To add more intelligence to a conversational AI application, you can
add and customise pretrained API models and Cognitive Services,
including language, speech, knowledge and vision capabilities.
Bot Framework also provides a set of solution accelerators and
templates to help build sophisticated conversational experiences. The
Virtual Assistant solution accelerator brings together all the
supporting components and greatly simplifies the creation of a new
project including basic conversational intents, dispatch integration,
QnA Maker, Application Insights and an automated deployment.
The Power Virtual Agents offering builds on top of the Bot
Framework platform, providing a no-code graphical interface to
create conversational experiences.

Conversational AI Use Cases

Customers familiar with virtual assistants and messaging apps are
engaging more and more with conversational interfaces, which can
present a more natural experience where humans express their needs
through natural language and quickly complete tasks. For a lot of
companies, conversational AI applications are becoming a
competitive differentiator. Many organisations are strategically
making bots available within the same messaging platforms in which
their customers spend time. Organisations around the world are
transforming their businesses with conversational AI, which can
promote more efficient and natural interactions with both their
customers and their employees. Here are a few common use cases:
Customer support
Organisations are using conversational AI to transform their
customer relationships by providing easy and natural interactions
across multiple channels and platforms, such as home devices,
mobile apps, social channels like Facebook Messenger and
websites. Conversational experiences not only allow
organisations to reach their customers wherever they are, but also
to personalise and continually improve their interactions.
Insurance companies, for example, are making it easier for
customers to get quick answers to commonly asked questions,
submit claims or even generate a quote for an insurance plan.

10 | Conversational AI
 Retail companies are also allowing users to quickly track
packages and get order status updates, while still allowing for a
customer to be transferred to chat with a human agent.
Telecommunications companies are using virtual assistants with
AI capabilities to learn more about customers to deliver rich
customised interactions, grow revenue and increase customer
support teams’ productivity.
Enterprise Assistant
Organisations are using conversational AI to improve employee
engagement, connecting people, tasks, information and services
more effectively with more natural and intuitive interfaces. By
integrating employee assistants with voice and text interfaces
into enterprise devices and existing conversation canvases (e.g.,
Microsoft Teams, Slack and Web Chat), organisations speed up
the process of managing calendars, finding available meeting
rooms, finding people with specific Skills or contacting HR,
Integration with Dynamics, Power Apps, ServiceNow and other
IT providers simplifies accesses for employees and allows them
to easily find the data and perform the tasks that they are looking
for. Integration into searches adds the power to provide
enterprise data in a natural way for users as well.
Call centre optimisation
Integrating a conversational experience into a call centre
telephone communications system can reduce call times with
human agents by clarifying information in advance or resolving
simple requests without the need for a human agent. In addition,
the solution replaces classic interactive voice response (IVR)
solutions with a modern conversational experience and enables a
consistent user experience through the duration of the call, or
until hand-off to a human agent.
Post-call analysis assesses call quality and customer feedback,
with insights available to improve the call flow and optimise the
user experience, increase first contact resolution and meet other
key performance indicators (KPIs).
The same assistant can be exposed through additional text-only
channels, enabling end users to interact through their channel of
choice and increasing the pay-off of the investment by ensuring
all users – whether they are using SMS or richer channels – can
participate.

Conversational AI | 11
In-car voice assistant
Voice-enabled assistants integrated into cars provide drivers and
passengers the ability to perform traditional car operations (e.g.,
navigation, radio) along with productivity-focused scenarios
such as moving meetings when you’r running late, adding items
to your task list and proactive experiences where the car can
suggest tasks to complete based on events such as starting the
engine, travelling home or enabling cruise control. Other use
cases include scheduling a service for a vehicle based on a user’s
preferences for service provider, vehicle location, provider
schedule availability, severity of issue, loaner preference, both
personal and work schedules and many more variables. This is
the power of bringing an automotive supplier’s data into the
picture and illustrates the fully integrated experience possible
through the Virtual Assistant solution.
Hospitality assistant
A Virtual Assistant integrated into a hotel-room device can
provide a broad range of hospitality-focused scenarios:
extending a stay, requesting late checkout, room service,
concierge services and finding local restaurants and attractions.
The app can be linked to a productivity account, opening up more
sophisticated experiences such as alarm calls, weather warnings
and learning patterns across stays.
These are some examples of the types of conversational AI
applications we will be focusing on building in this book. Let’s now
look at the typical workflow for developing a conversational AI
application.

Development Workflow of Conversational

AI Applications
The typical workflow for developing a conversational AI application
resembles other kinds of projects: the major phases are design, build,
test, deploy, connect and evaluate (Figure 2).3

3 These phases are described further in line Azure documents.

12 | Conversational AI
Figure 2. The typical workflow for developing a conversational AI
application

Let’s look at each phase in this workflow.

Design
Developing a bot, like developing websites and applications, should
start with a design for a great experience. When humans interact with
bots, we expect that what we say is understood, what we receive as a
response is appropriate and what we get as a service is delightful. We
expect that, if we leave mid-conversation, the bot will remember
where we left off.
Your bot represents your brand, products and services for your
customers and employees, so it is imperative to start with a design-
led approach to ensure that the goal of the bot meets the explicit or
latent need of the human it serves. To design a delightful experience,
we recommend the best practices of researching targeted users,
defining bot personas, storyboarding bot scenarios, designing
conversation flow and defining an evaluation plan, without
specifying technical development details.
For each of these design activities, here are the key questions to
answer:
Researching targeted users
Who are your users? What are their objectives, needs and
expectations? What is the context for their interaction with the
bot? What does their environment look like? How will your bot
help them? What services should your bot provide them?
Defining bot personas
What should your bot look like (for instance, an avatar)? What
should it be named? Does the bot carry out your organisation’s
values? What is your bot’s personality? Does your bot have a
gender? Can it respond to off-topic questions? What tone of
voice should your bot use? How would your bot handle different
situations? How should your bot respond (with proactive,
reactive or exception management)?

Conversational AI | 13
Storyboarding bot scenarios
What is the user journey for your bot’s targeted users? What
should your bot do and not do? What are the goals and priorities
of your bot’s use cases?
Designing conversation flow
What conversation flows can you expect for your main use
cases? Simple Q and A, push notifications, step-by-step
instructions or more complex interactions?
Defining an evaluation plan
How would you measure success? What measurements do you
want to use to improve your service, and where should you insert
instrumentation?
Before writing code, review the bot design guidelines from
Microsoft’s Bot Framework documentation for best practices.
The Bot Framework provides a set of tools for the design phase,
including:

• chat files to create a mock-up of conversations between the user

and the bot for specific scenarios
• The bf chatdown command to convert .chat files into rich
transcripts
• Bot Framework Emulator, which opens a .transcript file to
view a realistic rendering of the conversations (Figure 3)

14 | Conversational AI
Figure 3. View of a .transcript file in Bot Framework Emulator

Build
A bot is a representational state transfer (REST) web service that
communicates with the user by sending and receiving messages and
events from conversational interfaces like chat rooms or Web Chat
widgets. With Microsoft’s Azure Bot Service and Bot Framework,
you can create bots in a variety of development environments and
languages. You can start your bot development in the Azure portal or
use one of the Bot Framework SDK templates for local development.
The templates support the C#, JavaScript and Python languages with
Java support in early preview at the time of writing.
After you build the basic bot, extend its functionality in the ways your
design calls for. You can add NLP capabilities using Language
Understanding, add a knowledge base to answer common questions
using QnA Maker, add capabilities to manage complex conversation
flows and multiple knowledge domains using the Dispatch tool and
add graphics or menus using Adaptive Cards. Additionally,
Microsoft provides command-line tools to help you create, manage
and test these bot assets as part of a DevOps process.
You may access a variety of samples that showcase the
conversational capabilities available through the SDK, including
basic dialogue capabilities such as multi-turn dialogues through more
advanced capabilities such as proactive messaging and
authentication.

Conversational AI | 15
In addition, Microsoft provides a more advanced Virtual Assistant
template, which is recommended as a starting point for building a
more sophisticated conversational experience. It brings together
many best practices for building conversational experiences and
automates the integration of components that have been found to be
highly beneficial by Bot Framework developers.
For example, a conversational experience built on the Virtual
Assistant template allows developers to handle multiple languages,
NLP models for base conversational intents, custom personalities to
answer more general questions, integrated language generation for
more natural responses, an introduction experience for new users,
context switching and Skill support.
In the next section of this book, we will use the Virtual Assistant
template to create a conversational AI application.

Test
To test your conversational AI application, Microsoft provides the
Bot Framework Emulator enabling developers to test conversations
quickly and easily. You can also write unit tests using the Bot
Framework SDK, which can focus on functionality testing of specific
dialogues. Once configured through the Azure portal, your bot can be
reached through a web chat interface, enabling broader testing by end
users early in your development process.

Publish
When you are ready for your bot to be available on the web, either
publish your bot to Azure or to your own web service or data centre
– wherever a normal web application can be hosted.

Connect
Azure Bot Service does most of the work necessary to connect your
bots to a range of channels and devices. Configured through the
Azure portal, you can connect your bots to Facebook Messenger,
Slack, Microsoft Teams, Cortana, email, Telegram, Twilio, LINE
and other channels. You can also use Web Chat widgets to embed
your bots in your websites or mobile applications.

16 | Conversational AI
You can use the Direct Line channel to connect your bot to your own
client application, or the Direct Line Speech channel that enables
low-latency speech interfaces with client applications using the
Microsoft Speech SDK. Thus, you can embed text and speech
experiences into desktop applications, mobile apps and devices such
as cars, speakers and alarm clocks.
Bot Framework and members of the open source community also
provide code-based adapters to connect your bots to other channels,
such as Google Assistant, Amazon Alexa, Webex Teams, websockets
and webhooks.

Evaluate
Recordings of conversations between bots and users provide valuable
business insights to help you evaluate your bot’s performance. At this
phase, best practices include evaluating success metrics that you
defined during the design phase, reviewing instrumentation logs,
collecting user feedback, refining and iterating. Bot Framework
provides sample Application Insights queries and a Power BI
dashboard to help you grasp the full breadth of your bot’s
conversations with users and gain key insights into your bot’s health
and behaviour.

Core Features of Virtual Assistants

Building on the Bot Framework SDK, Microsoft’s open source
Virtual Assistant solution (available in C# and TypeScript) is a
project template that encompasses the best practices for developing a
bot on the Microsoft Azure platform.
Organisations are seeing a greater need to deliver advanced
conversational assistant experiences tailored to their brand,
personalised to their users and made available across a broad range
of apps and devices. With the Virtual Assistant, you control the name,
voice and personality to suit your needs. Bot Framework provides
solutions that simplify the creation of a Virtual Assistant, enabling
you to get started and extend your bot with a broad range of end-to-
end development tooling.
The Virtual Assistant brings together Bot Framework, Azure Bot
Service and Language Understanding inside the Azure AI platform
to simplify building your own Virtual Assistant (refer to Figure 1).
Bot Framework and Azure Bot Service provide core conversational

Core Features of Virtual Assistants | 17

capabilities for the Virtual Assistant, including dialogue
management, natural language prompts, context switching, memory
and language generation. The Virtual Assistant provides additional
capabilities and prepackaged sets of domain-specific interactions
called Skills to help organisations build their own assistant
experiences in a variety of languages – for example Calendar
and ToDo.
The Virtual Assistant intends to make the developer’s job easier and
more productive. In this section, we will walk through some core
features of the Virtual Assistant.

Complete Control for Developers

With Virtual Assistant, all aspects of the user experience are owned
and controlled by you. This includes the branding, name, voice,
personality, responses and avatar. Microsoft provides five chat
personalities based on the Azure Cognitive Service QnA Maker,
enabling you to tailor the bot’s personality. The source code to the
Virtual Assistant and supporting Skills are provided as samples for
you to customise. Your Virtual Assistant will be deployed within
your Azure subscription. Therefore, all data generated by your
Assistant (questions asked, user behaviour, etc.) is entirely contained
within your Azure subscription. See Cognitive Services compliance
and privacy details and the Azure section of the Trust Centre for
more information.

Prebuilt and Reusable Skills

Common Virtual Assistant scenarios are provided as reusable
Conversational Skills and include tasks like finding nearby points of
interest, checking off an item on a to-do list and replying to an email.
Skills – delivered in source code form – are fully customisable and
consist of language models for multiple natural languages, dialogues
and integration code. Additional Skills can be created and made
available either through your own Assistant or through a broader
Skill ecosystem. This enables you to curate the capabilities that make
sense for your scenario and that work across industries. Because the
Virtual Assistant leverages Azure Bot Service, you can give users
access to your Assistant through any of the supported channels and
adapters, letting you reach your end users wherever they are and
using UI/UX experiences with which they are already familiar
and comfortable.

18 | Core Features of Virtual Assistants

Flexible Integration and Contextual
Awareness
The Virtual Assistant architecture is flexible and can be integrated
with existing speech or NLP capabilities, back-end systems, APIs and
devices to enable personalisation and adapt responses as required for
the users’ context. The Assistant can also be aware of the device or
channel through which the user is communicating, which can be used
to optimise the experience (e.g., voice versus text) and enable the user
to switch between different channels if needed.

Business Insights Captured and Distributed

Bot Framework provides a rich set of out-of-the-box metrics enabling
any conversational experience to collect data at the levels you desire,
to let you understand better what your customers are asking and
where you might have opportunities to improve the service.
Azure Application Insights capture end-to-end analyses across the
entire architecture. Microsoft has also provided sample Power BI
dashboards that serve up easy-to-read graphs showing popular
conversations, conversation length, unique users and other key
statistics (Figures 4 and 5). You can further extend your insights
pipeline with your own machine learning to provide customised AI
experiences to your users. Like all data that is part of your bot, the
metrics remain under your control, helping you comply with privacy
regulations such as the General Data Protection Regulation (GDPR).

Core Features of Virtual Assistants | 19

Figure 4. Power BI dashboard for Bot Framework Virtual Assistant
– Overview Tab

Figure 5. Power BI dashboard for Bot Framework Virtual Assistant

– Conversations Drill Down

Multimodal Input
The Virtual Assistant provides a range of input mechanisms: text, tap
and speech. This can be extended as needed to include vision through
the integration of vision cognitive services. Additional input types
can easily be integrated, depending on device or canvas capabilities.
A Bot Framework-based conversational experience can also be
extended to support gestures (if available from the end user device),
enabling users to switch between input types as desired.

20 | Core Features of Virtual Assistants

The Virtual Assistant also integrates tightly with Speech service, part
of the Cognitive Services family, along with NLP and dialogue
management – to enable contextual awareness of conversations.
Real- time streaming of user audio enables NLP and dialogues to start
as soon as the user finishes speaking, delivering a low-latency, more
natural experience. The custom neural voice capability in the Speech
service enables customers to develop highly realistic custom voices
for natural conversational interfaces, starting with just 30 minutes
of audio.

Adaptive Cards
Adaptive Cards provide graphic capabilities such as cards, images
and buttons inside your Assistant. The cards are platform-agnostic
pieces of UI, authored in JSON, that supported apps and services can
exchange. When delivered to a specific app, the JSON is transformed
into native UI that automatically adapts to its surroundings. It enables
you to design and integrate lightweight UI for all major platforms and
frameworks.
If the conversation canvas has a screen, these cards can be rendered
across a broad range of devices and platforms, thus providing a UX
that is consistent with the service or context in which the card is
embedded. Devices that do not have screens can make use of the
speech-friendly responses provided alongside the Adaptive Cards or
any combination of delivery mechanisms appropriate to the context.
The Virtual Assistant and related Skills work comprehensively with
Adaptive Cards, and their design and branding can be fully
customised to suit your scenario. Figure 6 shows a few examples.

Core Features of Virtual Assistants | 21

Figure 6. Adaptive Card examples

Capabilities for the Enterprise

A typical Bot Framework–based conversational experience leverages
a range of Azure capabilities – for example Azure Bot Service,
Language Understanding and Speech Cognitive Services, along with
a broad set of supporting Azure components. This means you benefit
from the Azure global infrastructure that includes ISO 27018,
HIPAA, PCI DSS and SOC 1, 2 and 3 certification. In addition,
Language Understanding supports many languages. The Translator
service provides machine translation capabilities to extend your
Virtual Assistant even further.
Now that we know what the Virtual Assistant can do, let us create
one. In the next few sections, we will guide you through the process
of creating and customising your Virtual Assistant, adding
intelligence to your Assistant with Skills, connecting your Assistant
to clients and channels and enabling analytics for your Assistant.
Along the way, we will provide links to online tutorials, which can
be done using either C# or TypeScript.

22 | Core Features of Virtual Assistants

Developing Your Virtual Assistant
In this section, we will guide you through how to create a highly
functional Virtual Assistant in your own Azure subscription.4

The Virtual Assistant Template

The Virtual Assistant template,5 as we noted earlier, is an open source
tool that provides a preconfigured starting point for building a custom
Assistant. Using the template, you will generate an Assistant project,
which follows the recommended structure for a bot project. You are
free to restructure this as necessary but bear in mind that the provided
deployment scripts expect some files to be in consistent locations.
Building a conversational experience using the Virtual Assistant
template requires the following resources:

• Azure Bot Registration (to configure Bot endpoint and channel

configuration)
• Azure Web App (to host your Bot application)
• Azure Storage Account (to store transcripts)
• Azure Application Insights (telemetry)
• Azure Cosmos DB (Conversational State and User State – this
can be swapped for Azure Storage for development purposes)
• Language Understanding
• QnA Maker (including Azure Cognitive Search and an Azure
Web App)

To enable you to get started quickly and prevision these resources,

Microsoft provides an Azure Resource Manager (ARM) template and
a set of PowerShell scripts (supported cross-platform), along with
Language Understanding models for common base domains, QnA
Maker knowledge bases (personality and example FAQs) and the
dispatcher tools.

4 In addition, you can follow the Bot Framework quick-start documentation to create a
simpler experience that can be extended for additional scenarios.
5 The architecture and capabilities of the template are described in the online
documentation for the Virtual Assistant template.
Developing Your Virtual Assistant | 23
Online Tutorial: Create a Virtual Assistant
Follow the online tutorial (in C# or TypeScript) to create your first
Virtual Assistant app that greets a new user and handles basic
conversational intents. During this tutorial, you will:

1. Ensure you have an Azure subscription (or get a free Azure

account if you don’t have one yet).
2. Download and install Bot Framework development
prerequisites and the Virtual Assistant template.
3. Create your Virtual Studio project using the Virtual Assistant
template.
4. Provision your Assistant using the provided ARM template and
a PowerShell script.
5. Run and test your Assistant.

Online Tutorial: Customise Your Assistant

Now that you have an Assistant, you can optionally customise it to
personalise the experience for your brand and users. Dialogues can
be added directly to your Assistant or through Skills if you wish to
build a more complex solution – this is covered below. Follow this
online tutorial (in C# or TypeScript) to learn how to perform the
following tasks:

• Edit the greeting by customising the Adaptive Card.

• Edit responses by customising Language Generation (.lg) files.
• Edit cognitive models by, for example, updating knowledge
bases (FAQ and/or chit-chat), adding an additional knowledge
base and updating local LU files for Language Understanding
and QnA Maker.

Connecting Assistants to Clients and

Channels
Clients and channels are the ways that users can interact with
a conversational AI application. The Azure AI platform does most
of the work necessary to connect your bots to a range of channels
and devices.

24 | Connecting Assistants to Clients and Channels

Configured through the Azure portal, you can connect your bots to
Facebook Messenger, Slack, Microsoft Teams, Cortana, email,
Telegram, Twilio, LINE and other channels. You can use Web Chat
widgets to embed your bots in your websites or mobile applications.6

Online Tutorial: Speech-Enable Your

Assistant
Direct Line Speech is a robust end-to-end solution for creating a
flexible, extensible voice Assistant that is optimised for speech
interaction with bots. Direct Line Speech offers a high level of
customisation and sophistication for voice assistants.
Follow the online tutorial to perform the following tasks to connect
your Assistant to the Direct Line Speech channel and build a simple
application integrated with the Speech SDK to demonstrate speech
interactions.

1. Create a Speech Service resource.

2. Add the Direct Line Speech channel.
3. Use the Bot Framework Emulator or Speech sample client
application and connect to your Assistant.
4. Change the voice.

Online Tutorial: Surface Your Virtual

Assistant to Microsoft Teams
If you’re are looking at building an Enterprise Assistant, you can
follow the online tutorial to connect your Assistant to Microsoft
Teams and create the application manifest required to install your
Assistant within Teams.

1. Add the Microsoft Teams Channel.

2. Install the Teams App Studio.
3. Create the application manifest for Teams.
4. Test in Teams.
5. Add Commands.

6 You can find details on how to connect to channels in the Bot Framework channels
documentation, with the table of contents on the left linking to additional channel-
specific instructions. In addition, you have the option to connect your Assistant to
Amazon Alexa, Google Home and others through integration done by the Bot Builder
open source community.
Connecting Assistants to Clients and Channels | 25
Optional: Adding Intelligence to
Your Assistant with Skills
A Bot Framework Skill provides a conversational component model
enabling developers to split their Assistant experience into a set of
conversational building blocks, which can be developed
independently of each other and brought together into one unified
experience. This is a common pattern for larger conversational
experiences, whereby there is one ‘parent bot’ that users interact
with which then hands them off to various ‘child’ Skills to handle
certain tasks.
Think about the broad set of common capabilities and dialogues that
developers have traditionally built themselves. Productivity
scenarios are a good example, where each organisation would need
to create its own language models, dialogues, API integration and
responses. The job is then further complicated by the need to support
multiple languages, resulting in a large amount of work required for
any organisation building their own assistant experience.
Bot Framework provides a range of multilanguage open source
Conversational Skills – including Calendar, Email, To Do and Point
of Interest – to reduce this effort. The framework also offers a number
of experimental Skills, including Phone, News, Weather, Music and
IT Service Management.
These Conversational Skills are themselves bots and incorporate
language models, dialogues and integration code. They are built in
the same way as any bot, but can be incorporated through easy
configuration into an existing conversational experience to extend
their capabilities. All aspects of each Skill are completely
customisable by developers, and the full source code is provided on
GitHub alongside the Virtual Assistant.
Organisations can also create Skills for their private use or to share
with other organisations to compose into their own experiences. For
example, a conversational app developed by a meal delivery service
for their own channels (mobile apps, websites and conversational
canvases) can also be exposed as a Skill for household IoT devices
and cars to integrate as appropriate. This highlights a core capability
of Bot Framework and Azure Bot Service: they enable you to write a
Skill once and then provide it through many different channels
(including Alexa and Google Assistant) with a single code base to
reduce duplication across different ecosystems.

26 | Optional: Adding Intelligence to Your Assistant with Skills

Online Tutorial: Connect to a Sample Skill
As required, you can add any of the sample Skills provided in the Bot
Framework Solutions repository to your Assistant. The Skills are
available only in C# at this time, but can be added to a JavaScript or
Python-based Assistant.
Follow the online tutorial to perform the following tasks:

1. Deploy a sample Skill project.

2. Add the sample Skill to your Assistant and republish your
Assistant to Azure.
3. Test the sample Skill.

Online Tutorial: Create a Custom Skill

If you wish to build your own custom Skill to extend your Assistant,
you can follow the online tutorial, during which you will perform the
following tasks:

1. Create your Skill project using the Skill template in Visual

Studio.
2. Provision your Azure resources using the provided ARM
template and PowerShell script.
3. Run your Skill.
4. Add your Skill to an Assistant.
5. Invoke your Skill.

Enabling Analytics for Your Virtual

Assistant
Developers can gain key insights into their Assistant’s health and
behaviour with the Bot Framework analytics solutions, which include
sample application queries and a dashboard (leveraging Microsoft
Power BI) to understand the full breadth of your Assistant’s
conversations with users. The underlying data captured can be used
by a broad range of data analysis tools, as needed.

Enabling Analytics for Your Virtual Assistant | 27

Online Tutorial: View Analytics with Power BI
Follow the online tutorial here to hook up your Assistant with the
dashboards provided in the Power BI Virtual Assistant analytics
template:

1. Configure your Assistant’s telemetry logging with the

Application Insights application.
2. Open the Virtual Assistant analytics template (a Power BI
template) and connect it with your telemetry logging.

The Power BI template provides a comprehensive dashboard for you

to gain valuable insights into how your Assistant is performing and
which areas need improvement. It provides you insights including:
Overall usage
Understand core metrics such as unique users, messages and
conversations per day and channels (Figure 4)
Dialogues
Review the popularity of all dialogues as well as outcomes
(abandoned, cancelled, done or started)
Language Understanding
Gain insights on Language Understanding intents, which
are useful for the purpose of monitoring what your users are
talking about
Conversations
View data about conversations per user by day and average
duration, with the ability to drill down by conversation to view
all related user utterances, bot responses and dialogues triggered
during the same session (Figure 5)
Transcripts
Show interactions, sessions and transcripts from conversations
between the Assistant and users

28 | Enabling Analytics for Your Virtual Assistant

QnA Maker insights
Review insights on matched user queries with QnA Maker,
which is useful for identifying user’s knowledge-base gaps
User feedback insights
Review explicit user feedback (positive, negative) and
corresponding user and bot utterances if your bot has enabled
feedback middleware in its telemetry
Now that you have learned how to view a sample of Virtual Assistant
analytics, you can also:

• Add telemetry to your bot: learn what specific code components

are required for out-of-the-box telemetry.
• Analyse your bot’s telemetry data.
• Work with events generated by the Bot Framework Service
telemetry.

Roadmap and More Resources

Microsoft continues to invest in its Azure AI platform to make it
easier for organisations and developers to build robust conversational
solutions, and to deploy them wherever their customers are.
For example, Microsoft continues to improve the process for building
conversational experiences through regular releases of the Bot
Framework SDKs and tools. As best practices evolve, they are
packaged into the Virtual Assistant template and sample Skills.
Microsoft is committed to making bot building easier with the Bot
Framework Composer, which provides a low-code visual interface
for creating, editing, testing and refining bots. Microsoft is also
connecting bots to more users by adding more channels and support
for human hand-off and telephone-based communications.
At the same time, Microsoft is enabling more natural, dynamic and
sophisticated conversations with Adaptive Dialogues. These
dialogues enable a more natural interaction, with the user being able
to seamlessly move around all stages of a dialogue, changing their
mind on a previous answer or providing additional information
addressing later questions automatically.

Roadmap and More Resources | 29

Additionally, Microsoft is improving and enhancing Language
Understanding capabilities and providing support for document
understanding.
For additional resources, please check out:

• GitHub’s Bot Framework SDK documentation

• Microsoft’s Azure Bot Service documentation
• Microsoft’s Bot Framework documentation
• GitHub’s Bot Framework news

Building Responsible AI
The Capgemini Research Institute, in their July 2019 report,
identified that nearly nine in ten organisations have encountered
unintended consequences resulting from the use of AI. The authors
of this report identified their top concerns, which included:

• Over-reliance on machine-led decisions without disclosure

• Collecting and processing personal data in AI algorithms without
consent or for purposes other than which it was collected
• Biased and unclear recommendations resulting in discriminatory
access and pricing of products or services
• Citizens objecting to mass surveillance, collection and the use of
personal data including biometrics
• Customers demanding reasoning and clarity behind a decision
taken by an AI algorithm

As we've described in this book, breakthrough advances in AI

technologies over the last five years are beginning to transform
products and services, which affects each of our lives. While many
of these changes are good, they also raise concerns about unintended
consequences resulting from bias, erosion of privacy, misinformation
and automation.
Designing AI to be trustworthy requires creating solutions that reflect
ethical principles that are deeply rooted in important and timeless
values. At Microsoft, we follow principles of fairness, reliability and
safety, privacy and security, inclusiveness, transparency and
accountability to build responsible AI systems.

30 | Building Responsible AI
 As is true for any technology, trust will ultimately depend on whether AI-
based systems can be operated reliably, safely and consistently – not only
under normal circumstances, but also in unexpected conditions or when
they are under attack.
– Microsoft President Brad Smith, The Future Computed

Building responsible AI applications is critical, but it ultimately rests

on AI developers and the organisations deploying AI technologies to
ensure responsible behaviour. To help developers and organisations
to build responsible solutions, Microsoft has proposed 18 design
guidelines for human-AI interaction. For conversational AI systems,
Microsoft also released a set of 10 guidelines covering impact,
transparency, inclusiveness, reliability, privacy, security and the
detection of bias or unfair exclusion.
To take a responsible approach with AI, it is essential to consider the
needs of the people who will use the solution during the initial design.
For example, a conversational agent designed to assist citizens
gaining access to public healthcare services must consider and cater
to the full range of abilities of those individuals. Designing a
conversational interface that supports audio and text input helps those
with visual impairments, as well as individuals who may be operating
a vehicle.
As users and developers of AI solutions, you must define and follow
criteria that reflect your AI principles. For example, with fairness, it
is important to consider the potential harms of allocation,
representation or association that could result from unfair bias in data
and models. An AI application being used to screen job candidates
could associate gender with certain hobbies, such as sports activities,
based on biases in training data and word-embedding models, which
may result in unfair selection. It is important to assess and monitor
an AI solution’s fairness and mitigate observed unfairness using tools
like the Fair Learn toolkit.
It is also important to understand the context in which the solution
operates. For example, with bots that have humanlike personas it is
especially important that they interact respectfully and safely with
users and have built-in safeguards to handle misuse and abuse. A bot
that helps consumers book entertainment is likely to support tone and
terms that are not appropriate for a healthcare-focused bot.

Building Responsible AI | 31
In order to build trust, it is critical that people understand what a
solution can do and what information that solution collects. Some
critical questions that developers should be asking themselves
include:

• Should users be aware that a bot lies behind the dialogue in

which they are engaged?
• How does the system handle failures, for example when there is
an error in speech-to-text transcription?
• What data does it collect, and how do users control that data
collection?
• Is the system susceptible to new forms of attack?

Finally, for people to be accountable and effectively use and make

decisions based on the results of an AI solution, they must understand
how the solution works and be able to explain the results. This is
critical in situations where the impact is high, for example in a
healthcare solution that may impact the treatments that a patient
receives. Historically, developers had to trade off accuracy and
transparency, but newer techniques, including model selection and
model interpretability tools, combined with greater rigour in data and
system documentation can eliminate that trade-off. It is important to
design AI solutions for both accuracy and transparency.
The objective of considering responsible AI principles is to build trust
in the solution and ultimately the people, service and company the
solution represents.

32 | Building Responsible AI
About the Authors
Elaine Chang is a leader of product development and customer
success for conversational AI at Microsoft, where she focuses on
solutions including Virtual Assistant Solution Accelerator and Skills.
She has been one of the key product leaders for Microsoft Bot
Framework and has led Azure Bot Service to general availability and
enterprise compliance.
Elaine is a featured speaker at Microsoft Build Conference, Microsoft
Ignite Conference, Microsoft MVP Summit, Microsoft AI Innovate
and more. Elaine is also a strategic innovator, a certified professional
coach and a business leader who advocates driving innovation
through diversity and inclusion.
Darren Jefford has over 20 years of engineering and architect
experience across a variety of industries. While at Microsoft, he has
worked in high-impact, customer-facing roles to architect and deliver
highly complex solutions using a broad range of technologies. In
recent years, he has led some of the first conversational AI projects
for a variety of organisations.
Darren is currently a principal architect in the Bot Framework team
at Microsoft, where he leads the Virtual Assistant team to enable
complex conversational experiences with key customers and the
broader developer ecosystem.
Darren is a regular speaker at Microsoft events and is also the author
of two books focusing on Visual Studio and BizTalk Server.

Building Responsible AI | 33
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