Microsoft adds Nuance to cart in a $19.7-billion push for healthcare

Microsoft has entered into a definitive agreement with Nuance Communications, a pioneer in conversational AI and cloud-based ambient clinical intelligence for healthcare providers, to acquire the latter within this year at $56 per share in an all-cash transaction of $19.7 billion. 

Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting — all leading clinical speech recognition SaaS offerings built on Microsoft Azure. 

These solutions work seamlessly with core healthcare systems, including longstanding relationships with Electronic Health Records (EHRs), to alleviate the burden of clinical documentation and empower providers to deliver better patient experiences. 

Nuance solutions are currently used by more than 55% of physicians and 75% of radiologists in the United States, and used in 77% of US hospitals. 

By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, as well as the benefit of Nuance’s expertise and relationships with EHR systems providers, Microsoft will be better able to empower healthcare providers through ambient clinical intelligence and other Microsoft cloud services. 

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

“AI is technology’s most important priority, and healthcare is its most urgent application,” said Satya Nadella, CEO of Microsoft. “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.”

Beyond healthcare, Nuance provides AI expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies around the world across all industries. 

This expertise will come together with the breadth and depth of Microsoft’s cloud, including Azure, Teams, and Dynamics 365, to deliver next-generation customer engagement and security solutions.

“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,” said Mark Benjamin, CEO of Nuance. 

“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,” said Benjamin.