Microsoft announced on April 12 that it has agreed to acquire Nuance Communications for $ 19.7 billion in cash. By turning this move into a digital healthcare operating system, Microsoft is expanding its cloud portfolio in the healthcare industry, which is undergoing rapid transformation.
The acquisition of Nuance was agreed as the company’s artificial intelligence (AI) business for the enterprise and healthcare industries got off to a good start. Not only does this acquisition make more sense for Microsoft than the long-rumored acquisitions of TikTok’s ByteDance, Pinterest, and Discord, but it’s already a partnership between the two companies. By working together, we can expect an increase in sales from the healthcare industry and the enterprise sector. Nuance’s technology uses speech recognition, AI, and natural language processing (NLP) to facilitate business processes in the healthcare sector. Over the last few years, the company has been separating and selling divisions and businesses to focus on AI-powered healthcare operations under CEO Mark Benjamin. With this acquisition, Benjamin will report to Scott Guthrie, Microsoft’s executive vice president of cloud and AI. 62% of Nuance’s sales in 2020 will come from the healthcare industry, and the rest will come mostly from the enterprise sector. Meanwhile, Microsoft recently launched a “Microsoft Cloud for Healthcare” service, which should be significantly expanded with the acquisition of Nuance. Microsoft CEO Satya Nadella is focusing on industry-specific clouds, and with the acquisition of Nuance, Microsoft’s total addressable market (TAM) in the healthcare sector will be $ 500 million. ). In a conference call with analysts, Nadella said: It is now clear that healthcare organizations that accelerate digital investment can improve patient prognosis and achieve significant cost savings. Advances such as AI will have a great impact on the improvement of human ability in the healthcare field. AI is a technology priority, and healthcare is the most urgent application area. Nuance is a pioneer in enterprise AI, providing the AI layer in Healthcare’s Point of Delivery (POD). With this acquisition, our technology will be leveraged directly in physician-patient relationships and will play a central role in all healthcare delivery.