Microsoft expands Cloud Healthcare business with $16 billion Nuance acquisition

Microsoft has now revealed that it has acquired Nuance Communications in an all-cash deal that values the conversational Artificial Intelligence solutions provider at $19.7 billion.

Nuance Communications is founded by Mark Benjamin. It offers conversational AI and cloud-based software solutions for healthcare providers. Its products are – Dragon Medical One, Dragon Ambient eXperience, and PowerScribe One for radiology reporting – which are clinical speech recognition software offerings built on Microsoft Azure.

Satya Nadella, CEO, Microsoft, said, "Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI. 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 the growth of Microsoft Cloud for Healthcare and Nuance." 

Mark Benjamin, CEO, Nuance, said, "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. 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. The path forward is clearly with Microsoft — who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference. At the same time, this combination offers a critical opportunity to deliver a meaningful and certain value to our shareholders who have driven and supported us on this journey."

With the help of this new acquisition, Microsoft aims to bolster its existing cloud-first strategy in the healthcare space, which includes the Microsoft Cloud for Healthcare.

Post-acquisition, Mark Benjamin will continue to be the CEO of Nuance Communication, reporting to Scott Guthrie, the executive vice president of cloud and AI at Microsoft.

Microsoft Cloud for Healthcare started in 2020, and offers capabilities to manage health data at scale and for healthcare organizations to improve patient experience, drive operational efficiency, coordinate care while helping end-to-end support security, interoperability, and compliance of health data.