Why Microsoft acquired Nuance for 19.7BUSD?
Why Microsoft acquired Nuance for 19.7BUSD?
COVID has transformed how we work, study, buy stuff, build things and provide healthcare services. Microsoft’s strategy is to improve the productivity of the world through software such as Windows, Office 365, enterprise building blocks such as Cloud infrastructure and other enabling blocks to help enterprises become Digital enterprises
$$$ lies in Industry-specific AI
Microsoft moved from windows sales to providing office 365 productivity software in the cloud. Microsoft is now powering enterprise applications through cloud infrastructure. The Cloud infrastructure area is highly competitive with fewer margins compared to providing application software. Nuance helps Microsoft offer high profit building blocks such as voice recognition, speech, and language processing, etc.
Enterprise-first, Cloud-first
Nuance has a similar journey over the last 28 years over series of acquisitions and transformed itself as an enterprise first, cloud-first company. Nuance stuck a partnership with Azure to run their technology embracing the cloud. Nuance doubled down on healthcare by providing transcripts from doctor-patient conversations and figuring out a way to embed this into the hospital workflows without compromising privacy and security. Two-thirds of its customer base is in health care, and the remaining one-third around applications such as automated voice response, virtual assistants, biometrics, etc.
Healthcare is at the early stages of digitization
Fintech, retail, transportation, manufacturing, etc., are ahead in adopting cloud-based services compared to healthcare. Several successful companies such as Plaid, Square, Stripe, Shopify, Tesla are rethinking solutions for a cloud-first digital world. Microsoft is betting on this high growth curve.