hospitals as evidence of the success to-date. Nuance touts metrics like a 77% adoption rate among U.S. Just three years later, the company made a big pivot with the release of Dragon Medical One, its speech-to-text AI engine. In 2013, Nuance was known as the backbone of Siri. "This is a rolodex play," Valoir analyst Rebecca Wettemann told Protocol.īut one just has to look at how fast Nuance was able to succeed in health care, a notoriously difficult industry when it comes to the adoption of new software, to understand the bigger opportunity. Paying (albeit, a major premium) for that user base allows Microsoft to side-step the tedious task of building it out independently.
Nuance already has big-name health care customers like Epic, Cerner, Humana and Cleveland Clinic. To be sure, the health care component is a big deal and gives Microsoft access to a critical sales channel at a time when competing vendors are also pivoting quickly to industry-specific products.
Instead, Nuance could fill a critical void that would help Microsoft compete more fiercely against rivals like AWS. In justifying the amount, Satya Nadella touted Nuance as a "pioneer" in the field of conversational AI for health care and highlighted the impact its tech would have on establishing Microsoft as a leading vendor in the sector.īut the rationale seems to lie beyond trying to own just one industry. The second-largest in Microsoft's history, the price tag amounts to 13 times Nuance's yearly revenue. Microsoft's decision to spend $19.7 billion to purchase Nuance Communications took a number of industry analysts by surprise.
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