Microsoft enters the Dragon’s den with Nuance acquisition

Microsoft enters the Dragon’s den with Nuance acquisition

April 14, 2021 0 By admin


Microsoft has made its second-largest acquisition ever with the $19bn purchase of voice recognition specialist Nuance, the company behind Dragon speech recognition.

Microsoft’s acquisition of Nuance builds on the partnership formed by the companies in 2019. Through the deal, Microsoft said it plans to bolster Microsoft Cloud for Healthcare with voice recognition technologies from Nuance and expand the use of voice in the electronic healthcare records (EHR) market.

As Nuance voice recognition software is integrated with Microsoft’s enterprise software, the company also sees an opportunity to increase the market for Azure AI and its other cloud offerings.

According to a recent forecast from Statistica, the global voice recognition market is forecast to grow from $10.7bn in 2019 to $27.16bn by 2025, a compound annual growth rate of 16.8%.

While its Cortana voice assistant is built into Windows, Microsoft sees an opportunity to embed voice in its collaboration tools and enterprise products. In the consumer and professional markets, Nuance is known for its Dragon speech to text dictation system. But healthcare is an area in which the speech recognition company has specialised, due to the scope and accuracy needed to understand medical vocabulary.

Microsoft said the acquisition would double its total addressable market (TAM) in the healthcare provider space, bringing the company’s TAM in healthcare to nearly $500bn. 

Along with expanding voice technologies into EHR, Scott Guthrie, executive vice-president of cloud and artificial intelligence (AI) at Microsoft, said Nuance would be integrated with Microsoft’s AI technologies. Such integrations could enable conversations between patients and clinicians to be converted from audio into machine-readable text, which can then be analysed using AI. “Healthcare providers will be able to spend more time focusing on patients,” he said.

During an investor call covering the acquisition, Guthrie described how Nuance could be used to power ambient clinical intelligence, integrated with Microsoft Teams. As an example, he described how a radiologist’s voice notes of a medical scan could be captured and analysed alongside image analysis of the scan.

Beyond healthcare, Microsoft sees other opportunities in professional services such as where a financial advisor is able to combine information from a conversation with a client with product and market information. For Guthrie, combining Nuance’s interactive voice response (IVR) software with Microsoft cloud could be applied across any industry, to augment Dynamics 365 enterprise software and Teams collaboration with new AI capabilities and voice biometrics to reduce fraud.

Commenting on the acquisition, Lian Jye Su, artificial intelligence and machine learning principal analyst at tech market advisory firm ABI Research, said: “This is a recognition from Microsoft on the value of conversational AI in its future roadmap. Microsoft has attempted to develop its own conversational AI in the past through Cortana. The company also acquired conversational AI startup Semantic Machines in 2018.

“However, all these have yet to allow Microsoft to replicate the success of Amazon, Google and Apple in the consumer space and IBM in the enterprise space, and to compete directly with them. Microsoft is also feeling the threat from the conversational AI capabilities demonstrated by AI players in China, such as Alibaba, Baidu, iFlyTek, Mobvoi, Zhuiyi and Unisound. The acquisition of Nuance Communications will elevate Microsoft’s capabilities and allow Microsoft to develop both consumer and enterprise-focused conversational AI solutions.”



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