Microsoft to acquire Nuance for almost $20 billion

"Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI," said Microsoft CEO Satya Nadella.
By Mike Miliard
12:57 PM

(Photo: HIMSS Media)

Microsoft on Monday announced that it will acquire Nuance Communications, a deal aimed largely at advancing cloud and artificial intelligence offerings for its healthcare customers.

Microsoft is buying Nuance for $56 per share – an all-cash transaction totaling $19.7 billion, inclusive of Nuance's net debt. The deal is expected to close later this year.

With the acquisition of Burlington, Massachusetts-based Nuance – which will double Microsoft's total addressable market in the healthcare provider space, to nearly $500 billion – the Redmond, Washington, computing giant will continue to enhance its cloud-based decision support, AI-powered analytics and other cloud-based clinical workflow tools.

Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.

With healthcare-focused products such as Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting – all built on Microsoft Azure cloud – Nuance has pioneered conversational AI and ambient clinical intelligence for providers.

Its technologies are deployed in more than three-quarters of U.S. hospitals and are used by more than half of physicians and 75% of radiologists nationwide.

Nuance also offers enterprise artificial intelligence and customer engagement technologies – voice, virtual assistants and biometric solutions – across other industries.

Microsoft says its technologies – in combination with Azure, Teams and Dynamics 365 – will help advance next-generation tools for healthcare and customers in other fields.

This big-ticket acquisition traces its roots to a partnership between Microsoft and Nuance, first announced back in October 2019, focused on ambient clinical intelligence to help streamline documentation tasks and alleviate clinician burnout.

Since then, Microsoft has broadened and advanced its own healthcare offerings, most notably in the launch in May 2020 of Microsoft Cloud for Healthcare – its first industry-specific cloud product – which aims to help health system clients with patient engagement, care coordination analytics and telehealth.

Healthcare IT News case studies have shown how Nuance voice documentation technologies can help health systems gain cost efficiencies and reduce clinician burnout.

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

"AI is technology's most important priority, and healthcare is its most urgent application," he said. "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 growth of Microsoft Cloud in Healthcare and Nuance."

"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," added Nuance CEO Mark Benjamin.

"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 meaningful and certain value to our shareholders who have driven and supported us on this journey."

Twitter: @MikeMiliardHITN
Email the writer:

Healthcare IT News is a HIMSS publication.

Want to get more stories like this one? Get daily news updates from Healthcare IT News.
Your subscription has been saved.
Something went wrong. Please try again.