Microsoft said on Monday that it would Buy nuance communication, A provider of artificial-intelligence and speech-recognition software, for about $ 16 billion as it emphasizes the expansion of its healthcare technology services.
In acquiring Nuance, whose products include the transcription tool Dragon, Microsoft is hoping to increase its offerings for the rapidly growing field of medical computing. Nuance has a wide range of speech and text data related to customers, as well as healthcare, which is often an important part of building new systems.
Microsoft and Nuance have been working together since 2019, but the acquisition indicates that Microsoft has big ambitions for Nuance’s technology. Microsoft is making large investments in industry-specific cloud technology, including healthcare, finance, and retail.
Microsoft said the acquisition doubled the size of the health care market, where it competes, to about $ 500 billion.
The deal is Microsoft’s largest acquisition 2015 acquisition of LinkedIn For $ 26.2 billion.
Microsoft CEO Satya Nadella said in a statement, “Nunes provides the AI layer at the health care point of view and is a leader in real-world application of enterprise AI.”
Microsoft is making large investments in industry-specific cloud technology, including healthcare, finance, and retail.
When Microsoft buys a company, its executives generally believe that they can do it with more technology than the company they’re buying, which is a model that fits the Nuance deal, Brad Said Reback, an analyst at investment bank Stifel. This nuance has proven itself in healthcare with its technical and complex terminology, which means Microsoft can offer other types of businesses.
“Being able to solve that problem makes it much easier to handle the terminology of other industries,” he said.
Nuance’s tools are mostly used in the United States, so selling to a global powerhouse like Microsoft will help the company sell internationally more quickly. “We see an opportunity to change an industry, how we change an industry,” said Mark Benjamin.
Microsoft’s profitable business means it has money to spend. It expires in 2020 with $ 132 billion in cash and is actively looking for big deals to use that money. It announced an agreement in September Spent 7.5 billion dollars At ZeniMax Media, the parent company of the gaming studio, which produces major titles such as Doom and Quake.
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But there is not always any restriction on other possible acquisitions. Last year, A blockbuster bid to buy TikTokViral social network, Turned into a political soap opera And broke apart. this Have also considered buying Discord, A live chat community used extensively by gamers, although the status of those talks is unclear.
Under the terms of the deal, Microsoft will share $ 56 in cash – a total of $ 16 billion – up 23 percent from Nuance’s closing price on Friday. It is believed to have transactions of about $ 19.7 billion in debt.
Nuneus was a pioneer in the field of speech recognition. It led the market in the 1990s and 2000s and provided part of the underlying technology for Siri, the talking digital assistant that made its debut on the Apple iPhone in 2011. Licensing technology to Apple and other companies was an important part of their business.
Lee Deng, who helped lead speech recognition research at Microsoft for nearly two decades, said in an email interview that he had urged his owners to acquire Nuance in 1999, but Microsoft felt the price was too high.
Speech recognition went through a sea change in 2010, when a team of researchers at a Microsoft research lab outside Seattle built a new type of speech recognition system using a method called “.Read or learn to meditate“This method – which was far more effective than earlier technologies – quickly spread across the industry, with companies such as Microsoft, Google and IBM growing rapidly.
It is technology that now allows Siri, Google Assistant and other digital assistants to recognize spoken words with near-human-level accuracy. Companies such as Microsoft and Google also sell technology through cloud computing services to other companies.
Following this change, Nuance resumed its own business, offering speech recognition and other technologies for specialized markets, particularly healthcare.
During a conference call with investors, Nuance’s chief executive, Benjamin, who will remain in the role after the acquisition, said his company’s health care business has grown 37 percent over the past year and has received additional growth. Estimates. Microsoft said the Nuance technology was used by more than 55 percent of physicians and 75 percent of radiologists in 77 percent of hospitals in the United States and the country.
“The deal gives Microsoft access to half a million doctors and some of the largest hospitals around the world,” said Dan Ives, managing director of equity research with Weinbush Securities.