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Microsoft Acquires Nuance in Health Vertical Push


A healthcare technology graphic with a heart and apps
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Microsoft announced today that it’ll be acquiring cloud-based conversational AI provider Nuance Communications, known for its healthcare solutions, among others, in an all-cash offering valued at $19.7 billion. At roughly $56 per share, the figure reflects a 23% premium on Nuance’s closing share price on Friday, April 9, Microsoft said.
You could consider this premium-priced acquisition of Nuance, which has been a partner since 2019, as being indicative of the importance Microsoft is placing on building up its industry-specific cloud offerings, including the Microsoft Cloud for Healthcare, which was introduced in 2020 with features for virtual health appointments, patient monitoring, and care coordination. Microsoft said it will be able to augment its healthcare cloud with Nuance services such as Dragon Ambient eXperience, an ambient sensing technology that listens to clinician/patient encounters and offers ways to improve the patient experience; Dragon Medical One, a cloud-based speech platform for physicians and clinicians to document completed patient care in the electronic health records (EHR); and PowerScribe One, for radiology reporting. Nuance cloud services work with healthcare systems and EHR to simplify clinical documentation, Microsoft said.
Outside the healthcare industry, Nuance also provides AI and customer engagement services, including interactive voice response, virtual assistants, and digital and biometric, Microsoft said. At Enterprise Connect 2018, Nuance's VocalPassword service, which allows users to speak a phrase to validate identity, was featured in the Innovation Showcase focused on speech technology.
Elaborating on the acquisition, Microsoft said that the move will double its total addressable market in the healthcare provider space to approximately $500 billion. “AI is technology’s most important priority, and healthcare is its most urgent application,” Satya Nadella, CEO of Microsoft, said in the press release.
Microsoft said it expects the deal to close this calendar year, and Mark Benjamin will stay on as CEO of Nuance, reporting to Scott Guthrie, executive VP of cloud & AI at Microsoft.