Microsoft Acquires Nuance: Paying Top Dollar To Dominate Health-Tech Sector

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Microsoft is all set to shell out a pretty penny to acquire the company responsible for developing Siri’s A.I.

The Redmond, Washington-based tech giant has agreed to acquire Nuance Communications Inc., a speech-recognition firm, for a whopping $19.7 billion.

This move pushes Microsoft further into the health-tech space and will widen the range of software tools it offers to its present customers.

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Under the leadership of CEO Satya Nadella, this is Microsoft’s second-biggest acquisition. Prior to this, the big tech giant shelled out $26 billion to acquire the professional social networking platform LinkedIn back in 2016.

Based in Burlington, Mass, Nuance Communications Inc. is a pioneer in the field of speech recognition and artificial intelligence aka A.I. technology. Their software formed the basis on which the first version of Siri’s voice assistant before an in-house version replaced it.

Note here that this is not the first time Nuance has been part of acquisition talks. In 2014, the company was exploring a possible sale to Samsung Electronics Co and private equity firms. However, those discussions failed to fructify, unlike the one they held with Microsoft recently.

Note here that Microsoft has long been investing in speech systems, however, with very little success. In 2020, the company announced that it wants to shift its voice assistant offering from the consumer space and stop trying to compete with Amazon Echo and Google Assistant’s likes. And, now it seems like Microsoft is finally heading in the right direction.

Noting Nuance’s expertise in the domain of clinical documentation, Satya Nadella, Chief Executive Officer at Microsft, said that the deal reflects the surging demand for A.I.-driven tech applications in the healthcare space.

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Nuance has spent several years building its language process engine to understand medical terminology better. Thus, Microsoft will be able to leverage it and spin out products in the health tech space very quickly. What more?

Many of Nuance’s customers in finance, healthcare, and other industries already use Microsoft products, which is definitely a plus. Back in 2019, both companies showed a lot of interest in partnering up over the use of A.I. assistants for doctor visitations. At that time, Nuance and Microsoft said that the product would be built on top of the latter’s Azure cloud service.

When the pandemic hit in 2020 and the demand for remote healthcare grew instantaneously, both the companies deepened their ties via Nuance tech’s integration into Microsoft’s workplace collaboration software suite Teams.

All in all, it is well understood that Microsoft, with its upcoming voice assistant products, wants to make a mark in health tech. This is, however, somewhat of a blue ocean sector when compared to the consumer segment for Microsoft.

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