Microsoft acquires Nuance Communications for $19.7 billion

In a deal that will see Microsoft acquire Nuance for $56 per share, with the transaction expected to close this calendar year, solutions and expertise from both parties are set to be combined, with the aim to deliver new cloud and AI capabilities across healthcare and other sectors.

With Microsoft accelerating its industry-specific cloud services to help customers respond to disruption, including Microsoft Cloud for Healthcare, the acquisition will see the two companies build on their existing partnership, with Nuance’s range of healthcare products being leveraged.

Having began a strategic partnership in 2019, with the collective goal to reduce clinician burnout using AI, Microsoft will continue to work with tools provided by Nuance, which include the Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One for radiology reporting.

By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, the corporation aims to better empower healthcare providers through the use of clinical intelligence, alongside other cloud services.

The deal will double Microsoft’s total addressable market (TAM) in the healthcare provider space, bringing it to nearly $500 billion in revenue.

In addition to disrupting operations in healthcare, Nuance provides AI expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies in other sectors, such as financial services and telecoms.

From here, Nuance’s expertise is set to complement Microsoft’s cloud services, including Azure, Teams, and Dynamics 365.

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“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Satya Nadella, CEO of Microsoft.

“AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”

Mark Benjamin, CEO of Nuance Communications, commented: “Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerated demand for advanced conversational AI and ambient solutions.

“To seize this opportunity, we need the right platform to bring focus and global scale to our customers and partners to enable more personal, affordable and effective connections to people and care.

“The path forward is clearly with Microsoft — who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference.

“At the same time, this combination offers a critical opportunity to deliver meaningful and certain value to our shareholders who have driven and supported us on this journey.”

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Aaron Hurst

Aaron Hurst is Information Age's senior reporter, providing news and features around the hottest trends across the tech industry.