Microsoft Acquires Nuance for $19.7 Billion

Microsoft announced today that it will acquire AI software maker Nuance in an all-cash deal valued at $19.7 billion. That price represents a 23 percent premium to the closing price of Nuance’s shares at the close of business on Friday.

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” Microsoft CEO Satya Nadella said of the acquisition. “AI is technology’s most important priority, and healthcare is its most urgent application. 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 [the] growth of Microsoft Cloud for Healthcare and Nuance.”

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Microsoft and Nuance previously unveiled a strategic partnership in 2019, with the firms pledging to work together to combine Nuance Dragon Medical with Microsoft’s Azure, Azure AI, and ProjectEmpowerMD. Nuance integrated its Ambient eXperience ACI (ambient clinical intelligence) solution with Microsoft Teams in late 2020.

“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,” Nuance CEO Mark Benjamin says. “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, [which] 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.”

Under the terms of the deal, Mr. Benjamin will remain CEO of Nuance, and will now report to Microsoft executive vice president Scott Guthrie. Microsoft expects Nuance’s financials to be reported as part of its Intelligent Cloud business segment, and the software giant expects to close the transaction during this calendar year.

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Conversation 18 comments

  • crunchyfrog

    12 April, 2021 - 9:25 am

    <p>This kinda blows my mind. For nearly two decades I've watch software vendors I worked with get gobbled up by the next guy and then Nuance blow though eating up everybody in this space literally owning it. And now… Microsoft.</p>

  • IanYates82

    Premium Member
    12 April, 2021 - 9:49 am

    <p>Amazing. Would love to see some part of the Dragon find its way in to windows and/or office. Fantastic speech recognition capabilities, even using the versions from several years back. I tried the Microsoft equivalents a few times and they were never as good.</p><p><br></p><p>I suspect most of this is to do with the newer cloud stuff though. </p>

  • Usman

    12 April, 2021 - 10:40 am

    <p>Wonder if it means they'll purchase that company who makes and owns the patents for the display engine in Hololens 2</p>

  • harmjr

    Premium Member
    12 April, 2021 - 11:24 am

    <p>I am surprised Microsoft bought them and did not improve on the Windows Voice that's been in Windows 10 since at least Vista days. That worked exactly like a cheap Dragon. I always thought that it would put them out of business. This is the reverse of MS buying Slack instead of building out Teams in my opinion. </p>

    • digiguy

      Premium Member
      12 April, 2021 - 12:34 pm

      <blockquote><em><a href="#622657">In reply to harmjr:</a></em></blockquote><p>Nuance has become world number one in Text to Speech thanks to the acquisitions of some big players. Windows is way behind. Siri Voices come from Nuance and are much more advanced in every language. Hope this will push TTS forward in Windows tooo</p>

  • JH_Radio

    Premium Member
    12 April, 2021 - 11:57 am

    <p>I'm pretty sure that Nuance&nbsp; made the screen reader Talks for Synbian phones. that was a long time ago though. Wonder if they'll put Dragon into MS products. </p>

  • tripleplayed

    12 April, 2021 - 1:12 pm

    <p>If Microsoft wants to empower people to do more. They should invest in me and my permanent vacation fund. Only about 5 million, drop in the bucket for them. </p>

    • karlinhigh

      Premium Member
      12 April, 2021 - 1:23 pm

      <blockquote><em><a href="#622678">In reply to TriplePlayed:</a></em></blockquote><p>Ah, but scalability…</p>

    • samp

      12 April, 2021 - 3:29 pm

      <blockquote><em><a href="#622678">In reply to TriplePlayed:</a></em></blockquote><p>Not enough profit … </p><p>It needs to make them at least – 1 billion</p>

  • rmac

    12 April, 2021 - 1:39 pm

    <p>I wonder how much OnePlus would set MS back?! Only kidding!</p>

    • Paul Thurrott

      Premium Member
      13 April, 2021 - 9:43 am

      Do not give them any ideas. 🙂

  • donaldhall3

    12 April, 2021 - 2:45 pm

    <p>And on this day in history Nuance will go from a small company with a modest profit to a large acquisition with no profit. </p>

  • samp

    12 April, 2021 - 3:35 pm

    <p>Does this mean they are still looking into Discord or the money that would have gone there has gone towards this?</p>

    • Paul Thurrott

      Premium Member
      13 April, 2021 - 9:40 am

      I don’t think this impacts the Discord talks at all. Microsoft has $130 billion in cash.

      • samp

        18 April, 2021 - 3:24 pm

        <blockquote><em><a href="#622766">In reply to paul-thurrott:</a></em></blockquote><p>I failed to compute that number. That's around a billion times my investing capital.</p>

  • kevinbouwman

    Premium Member
    12 April, 2021 - 5:21 pm

    <p>I saw the title of the article and read "Microsoft Acquires Nuisance for $19.7 Billion". Had to click to see who Paul thought the nuisance was. :P</p>

  • Jim Lewis

    12 April, 2021 - 6:50 pm

    <p>I own Nuance Dragon Naturally Speaking (DNS) Professional Individual for which you can create your own speech macros, if you want. It's a great program and used to work superbly with older Win32 programs, including Microsoft Office. But has Microsoft evolved Office 365, DNS hasn't kept up. Hopefully it's not all about the medical cloud and Microsoft will devote some love to having individual versions of DNS work better with Office and a lot of its associated programs and also with Edge. Maybe MS could even toss it in "for free" with a certain level of Office 365 subscription (the one where you subscribe to Windows, too?! &lt;&lt;&lt;just kidding!&gt;&gt;&gt;).</p><p><br></p><p>At any rate, I started using DNS decades ago because of incipient carpal tunnel syndrome. Since then better ergonomic habits have helped me cope with less reliance on DNS. But lots of times, I fire it up just to avoid a whole slew of mouse clicks alone (I can vouch that it recognizes "mouse click" with 99.9999% accuracy). It used to work "more better" with Quicken, too, as it did for Office, for entering and updating information on credit card and banking downloads, etc. So perhaps as well as the medical arena, Microsoft might do well to give DNS some love and support in the banking arena as well. I've always found entering numbers via DNS faster and more accurate than typing them in and the READ THAT feature (when you get the recitation format right) is fantastic for proofing anything with the aural feedback often helping to catch errors that you might read right through otherwise. Having attempted to use Microsoft's built-in Windows speech recognition software (built in part off a license to use technology from earlier version of DNS from the '90's or earlier 2000's, IIRC – but my memory may be faulty there), Microsoft's speech engine can't hold a candle to DNS, especially when you get down to the vocabulary editing and training, application command and control in general and the macro capabilities built into the Professional Individual version. So great if Microsoft gives DNS an extended lease on life. Especially with its use in AI (smart assistants, anyone?!), a great speech recognition engine is a great acquisition for Microsoft. Improved speech recognition with better Windows and application command and control would be a big boost, too, for Windows as the OS to use for people with accessibility needs.</p>

  • hrlngrv

    Premium Member
    15 April, 2021 - 4:00 am

    <p>For MSFT's shareholders' sakes, I hope this turns out better than the aQuantive acquisition.</p>

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