Microsoft Corporation has announced plans to buy Nuance Communications, a tech firm that is perhaps best known for the large part it played in developing Apple’s Siri voice assistant.
The deal is valued at close to $20 billion and is the second-largest acquisition made by Microsoft after it purchased the social networking platform LinkedIn in 2016. In a statement, Microsoft said that the acquisition was aimed at bolstering its software and artificial intelligence expertise. The fact that they also said that this was specifically aimed at healthcare companies is the big clue behind the company’s thinking.
During the pandemic, “telehealth” and remote doctor appointments have boomed. This is a field that is likely to see further expansion in the years to come. Nuance’s artificial intelligence technologies have played a large part in delivering these services.
In his statement, Microsoft chief executive, Satya Nadella said that – “Nuance provides the AI layer at the healthcare point of delivery. AI is technology’s most important priority, and healthcare is its most urgent application.”
He went onto say that – “This coming together is about empowering healthcare. It’s now very clear that healthcare organizations that accelerate their digital investments can improve patient outcomes and reduce cost at scale.”
The potential of healthcare as a growth area for tech companies is highlighted by the ongoing pandemic. Microsoft will see this takeover as a way of opening more doors into this lucrative sector. And they aren’t the only tech giant taking notice.
Greg Pessin, a senior research director at Gartner Inc. says that “The pandemic response by the healthcare industry has proven the value of technology to healthcare delivery. All the digital giants are paying attention.”
Why Nuance?
Nuance was founded in Massachusetts in 1992. It currently employs more than 1,600 people worldwide and has operations in 28 countries. It has been at the forefront of speech-recognition technology since its founding.
Whilst it is best known for its work in developing Siri, it is its more recent ventures in healthcare that has attracted Microsoft’s attention. Nuance has played a pivotal part in providing software that has made it possible for doctors to take patient notes through dictation, and automating radiology reports.
In the US, nearly 80% of hospitals are Nuance customers and this is the market that Microsoft aims to exploit with the takeover. It is likely seen as a mechanism for selling more lucrative products and services like cloud computing to the health industry.
Nuance’s presence in the industry means that Microsoft is buying the years of knowledge that Nuance has built up. Much of this knowledge is Nuance’s development of its language processing engine to understand medical terminology.
According to Mr. Pessin, this will enable Microsoft to integrate the ability to deal with medical jargon into its existing product base. Products like Office365 and Teams will then become far more appealing to the medical sector.
As well as Microsoft, other big tech firms including Apple, Amazon, and Google, are also making their own moves to grab a share of the healthcare market.