$19.7 Billion: Microsoft goes all-in on healthcare voice recognition technology with Nuance Communications acquisition
Microsoft (NASDAQ: MSFT) is acquiring voice recognition technology (VRT) leader Nuance Communications (NASDAQ: NUAN) for about $19.7 billion (total outlay by Microsoft encompasses payment and assumption of debt). Founded in 1992 and headquartered in Burlington, Massachusetts, Nuance generated about $1.5 billion in sales during 2020.
Nuance is a globally recognized healthcare and business brand as a software as a service (SaaS) innovator in voice recognition, artificial intelligence (AI) and ambient technology. It has a successful, high-profile presence across the hospital, health system and large medical group market sectors in the United States. Estimates are that 90% of hospitals in the United States utilize Nuance SaaS offerings.
Globally, Nuance supports a variety of industry sectors, reportedly 85% of Fortune 100 companies utilize Nuance programs and services.
Nuance VRT, AI and ambient technology serve multiple purposes in medical and commercial applications
Microsoft chose to acquire Nuance rather than one of its competitors for several reasons. Nuance established itself early as a leader in healthcare as well as business VRT and it excels across its voice, AI and other advanced technologies that result in its high performing solutions.
Nuance has been adept at setting the pace of healthcare VRT innovation that disrupts competitors trying to keep up. Despite more companies entering the market and technology relentlessly advancing, Nuance has consistently been able to roll out new products and services, orchestrate upgrades and continue to offer high-quality levels of support.
Virtual assistants and the automation of functions in the healthcare industry are in high demand
Virtual assistants are in high demand throughout the healthcare industry. They enable clinicians and other healthcare organization personnel to fully engage patients in conversations and conduct examinations during in-person and virtual appointments.
Voice commands facilitate EHR interaction, charting, test and procedure scheduling plus other functions with a minimum of computer keyboard interactions. Data fatigue is a major contributor to nurse and physician burnout and the accuracy of data is always important in healthcare. Nuance products help to reduce data burden plus improve data accuracy and organizational productivity.
This is a list of the point-of-care settings that Nuance applications are frequently deployed in:
- Cardiovascular catheterization labs
- Clinics, practices, medical groups
- Emergency departments
- Government healthcare facilities
- Hospitals and healthcare systems (traditional and university)
- Imaging - MRI centers
- Pediatrics
- Surgery centers
- Urban and rural healthcare facilities
This is a list of Nuance voice response applications and functions that clinicians and healthcare staff can choose from fortified with multiple
computer-assisted physician documentation (CAPD) feature and AI-driven processes:
- Broad billing, reimbursement and coding options
- CAPD emergency department advisor aligned with immediate and urgent patient care assessment and treatment needs
- CAPD inpatient review identifying undocumented or unspecified diagnoses and comorbidities to improve CC/MCC capture
- CAPD outpatient review centering on chronic patient conditions
- CAPD surgical application for medical procedure advisement
- General diagnosis and medical reference information support
- Performance analytics focused on clinical, financial and patient outcomes with real‑time measurement and decision support
- Quality measures supporting value-based medicine and other payer or patient satisfaction applications
- Scheduling and extended patient care support protocols
- Various applications specializing in oncology, imaging, radiology
Nuance provides comprehensive installation, integration and support plus training and consultative services so healthcare organizations can immediately benefit and optimize the use of Nuance applications.
Various other industries are served by Nuance
Some of the same voice-activated responsive functions used in Nuance healthcare programs are used to fulfill the needs of users in other industries. This is a list of key industry categories in addition to healthcare that Nuance operates in:
- Education
- Finance
- Government
- Insurance
- Legal
- Retail
- Telecom
Asance and Microsoft have a long runway of opportunity in multiple business sectors worldwide as a combined entity.
Microsoft escalates its global healthcare clinical and business enterprise
Microsoft is a heavy hitter in the healthcare industry. Their involvement spans healthcare artificial intelligence plus other complex products and services for medical provider organizations, managed care organizations, life sciences, pharmacy and other sectors.
Its Microsoft 365 and Microsoft Office business applications are longstanding staples in the clinical research, medical professional, pharmaceutical, device, diagnostic, imaging and patient care service communities. They are accompanied by healthcare models of Azure, Microsoft Teams and Power Platform.
Based on its HoloLens technology and services Microsoft offers a growing selection of augmented and mixed reality applications for medical professionals, payers and clinical experts that are simulations created to accelerate diagnoses and treatment. A list of HoloLens-based partners and solutions includes:
- apoQLar: Advanced medical applications based on AI, augmented and mixed reality
- HoloForge: Designs new medical training solutions based on mixed reality and holographic computing.
- HoloLab: Augmented, mixed and virtual reality to create new healthcare computing experiences
- Medivis: Advanced visualization for surgery using augmented reality and AI
- Syngergiz: Applications and technology for prosthetic surgeons and clinical collaboration
- Visual3d: Holographic surgical navigation, robotics and telemedicine
In 2020 the company launched its Microsoft Cloud for Healthcare that is fully equipped to support the needs of healthcare entities worldwide. Its capabilities accommodate analytics, management, storage and security for massive volumes of patient data, clinical workflow data, operations, privacy compliance and interoperability. A list of Microsoft Healthcare Ecosystem partners includes:
- Accenture - Avanade
- Cognizant
- HCL Technologies
- KPMG - KPMG Community Care
- Mazik Global - MazikCare
- PwC
Healthcare stakeholders trust Microsoft's ability to reliably manage large volumes of medical, clinician and financial data according to their privacy and security requirements.
Nuance and Microsoft are a formidable global tandem
The combination of Nuance and Microsoft is a force multiplier; each has plenty of talented and experienced staff to develop new products and services for clinical and commercial clients. Their technical resources possess high-performance computing, programming, analytics, management and data storage across numerous applications, AI, VRT and other sensory-based digital technology.
The duo is readily capable of upscaling and integrating existing virtual assistant and telehealth programs as well as enterprise-wide solutions for healthcare provider organizations and their patients. They can also choose to organically and through acquisition expand their patient care platforms. Their expansive collaboration will drive competitive innovation and establish new revenue streams quickly.
Microsoft's strategic acquisition of Nuance Communications comes at the right time
Microsoft generated over $143 billion in sales during 2020. It has been 5 years since it acquired the preeminent business social media platform LinkedIn for $26.2 billion and almost 2 years since it bought software developer enterprise GitHub for $7.5 billion in 2019.
Two of its leading technology rivals Alphabet (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) have made major inroads into the healthcare industry in just the last year even as the pandemic continued to rage. Microsoft and Nuance are now positioned to reset the competitive balance.
Through its Google Health and Verily Life Sciences business units, Alphabet has made significant strides to develop and launch major healthcare initiatives in:
Not to be outdone, Amazon has made numerous, large-scale investments in healthcare based on its e-commerce, cloud computing and Alexa technology platforms:
Now it's Microsoft's and Nuance's turn to demonstrate their leadership in healthcare and digital innovation as one organization. Consumers, patients, medical professionals and healthcare provider organizations can anticipate breakthrough clinical and technical advancements. Investors can look forward to their combined success and high revenue potential moving forward.