Microsoft Acquires Nuance, Elevating Its Healthcare Cloud Strategy




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In a strategic move that elevates its existing partnership with Nuance, Microsoft will acquire the cloud and AI software provider for $56 a share in a transaction that will complete by the end of this calendar year.

Nuance is a provider of conversational AI and cloud-based ambient clinical intelligence for healthcare providers. Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting, all clinical speech recognition SaaS offerings built on Microsoft Azure. Nuance’s solutions aim to work seamlessly with core healthcare systems, including long-standing 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 U.S., and used in 77% of U.S. hospitals. Nuance’s Healthcare Cloud revenue experienced 37% year-over-year growth in Nuance’s fiscal year 2020 (which ended September 2020).

Microsoft’s acquisition of Nuance aligns with its detailed cloud strategy for the next decade, as explained by CEO Satya Nadella during Ignite 2021 last month.

Ignite 2021 showcased Microsoft’s growing commitment to industry verticals. It’s here that we saw a meeting of several products spanning several of Microsoft’s clouds including Azure, Microsoft 365 and Dynamics 365. Leading up to the event, the firm introduced three new industry cloud offerings (Microsoft Cloud for Financial Services, Microsoft Cloud for Nonprofit and Microsoft Cloud for Manufacturing) to its existing solutions for healthcare and retail. The launch is its response to customers pushing Microsoft to integrate and align innovation between its entire portfolio with industry outcomes and data protection standards. Microsoft’s approach combines its infrastructure services, software-as-a-service applications for individual sectors, co-development initiatives with industry customers and a partner ecosystem to address specific business processes and industry challenges. This solution-centric and integrated approach to its cloud offerings will be a big part of how it plans to differentiate against other industry offerings.

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” explained Satya Nadella, CEO, Microsoft at Ignite 2021. “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 will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.

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