Microsoft Closes Nuance Acquisition, Plans to Advance Conversational AI

Bringing enhanced conversational AI to health care, as well as other industries, is a key priority,

Jeffrey Schwartz

March 4, 2022

3 Min Read
Conversational AI in action

Microsoft has completed its acquisition of Nuance Communications, a provider of AI-based speech recognition software. The companies first announced the $19.7 billion agreement last April.

Nuance represents the second highest amount Microsoft has paid to buy a company to date. The software giant’s largest deal was its $26.2 billion acquisition of LinkedIn in 2016. But Microsoft’s planned $68.7 billion Activision purchase is poised to surpass the value of both deals, if approved by regulators.

Microsoft believes Nuance will advance its conversational AI capabilities in several industries, notably financial services, telecommunications and retail. But it will have the most significant impact on health care, where Nuance’s speech recognition technology is popular, Microsoft signaled.

Health care is AI’s “most urgent application,” Microsoft chairman and CEO Satya Nadella said in announcing the deal’s completion.

“Together, we will usher in a future of outcome-based AI where the health care professionals can spend more time with patients and less time on documentation,” he said.

Mark Benjamin will remain CEO of Nuance, and he will report to Scott Guthrie, executive VP of Microsoft’s Cloud + AI group.


Microsoft’s Scott Guthrie

“The combination of Nuance’s deep vertical AI expertise, and the richness of Microsoft’s industry cloud offerings will deliver more affordable, effective and accessible health care for all,” Guthrie said.

Microsoft’s Cloud for Health Care

Nuance will help Microsoft develop more personalized capabilities for both patients and providers. So says Gregory Moore, Microsoft’s corporate VP for health and life sciences. Moore indicated that the company will utilize Nuance to enhance the recently launched Microsoft Cloud for Healthcare, which provides patient engagement, health data analytics and clinician collaboration and productivity.

Moore, an M.D., said it’s a priority to make health care delivery more personal, affordable, effective and accessible. Also critical is making administrators more efficient, according to Moore. Microsoft and Nuance will work together to advance those goals, according to a blog posted by Moore on Friday.

“We are connecting Microsoft’s advanced cloud and AI capabilities – including human-level performance in a range of cognitive services – with Nuance’s industry-leading conversational AI, ambient clinical intelligence and integration into the existing clinical workflows,” Moore explained. “This will support health systems to deliver real-world results and timely insights for practitioners, patients and administrators.”

Enhancing the Contact Center

Microsoft’s acquisition of Nuance will also enhance Microsoft’s efforts to create more intelligent contact centers. Charles Lamanna, corporate VP for Microsoft’s business applications, and Nuance executive VP Robert Weideman explained how in a blog.

As separate companies, both Microsoft and Nuance have made significant investments to enhance the contact center experience. For its part, Microsoft launched a voice channel for Dynamics 365 Customer Service in 2020. Now together, they plan to develop automated AI-based solutions and allow engagement using various voice and digital channels.

“Together we hope to provide the most complete and compelling AI-driven customer engagement and contact-center portfolio, with secure tools that span no-code, low-code and pro-code to accelerate transformation,” Lamanna and Weideman noted. “We have the sales and professional services teams, channel resellers and independent software vendor partnerships that magnify our ability to deliver for our customers around the world.”

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About the Author(s)

Jeffrey Schwartz

Jeffrey Schwartz has covered the IT industry for nearly three decades, most recently as editor-in-chief of Redmond magazine and executive editor of Redmond Channel Partner. Prior to that, he held various editing and writing roles at CommunicationsWeek, InternetWeek and VARBusiness (now CRN) magazines, among other publications.

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