Microsoft acquires cloud and AI software company, Nuance Communications, Inc.

April 12, 2021  –  Microsoft Corp and Nuance Communications, Inc. (Burlington, MA) announced they have entered into a definitive agreement under which Microsoft will acquire Nuance in an all-cash transaction valued at $19.7 billion, inclusive of Nuance’s net debt.

Nuance is a cloud and AI software leader representing decades of accumulated healthcare and enterprise AI experience.

Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting, all leading clinical speech recognition SaaS offerings built on Microsoft Azure. Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, EVP of Cloud & AI at Microsoft.

The transaction is intended to close this calendar year.

According to the company, Nuance solutions are currently used by more than 55% of physicians and 75% of radiologists in the U.S., and used in 77% of U.S. hospitals.

Microsoft says the acquisition fits with its efforts to provide industry-specific cloud offerings to support customers and partners. These efforts include the Microsoft Cloud for Healthcare, introduced in 2020, which aims to address the comprehensive needs of the rapidly transforming and growing healthcare industry.

By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, as well as the benefit of Nuance’s expertise and relationships with EHR systems providers, Microsoft says it will be better able to empower healthcare providers through the power of ambient clinical intelligence and other Microsoft cloud services.

The acquisition will double Microsoft’s total addressable market (TAM) in the healthcare provider space, bringing the company’s TAM in healthcare to nearly $500 billion. Nuance and Microsoft will deepen their existing commitments to the extended partner ecosystem, as well as the highest standards of data privacy, security and compliance.

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