Updated: Apr 16, 2021
According to solution providers, Microsoft's proposed $19.7 billion acquisition of Nuance is a massive artificial intelligence and voice recognition win for the company, and it could build significant services opportunities for health care customers in the channel.
Solution providers praised Microsoft's proposed $19.7 billion acquisition of Nuance Communications as a significant expansion of the channel opportunity in the health care industry for artificial intelligence and voice recognition.
The deal, which is expected to close by the end of 2021 and will become Microsoft's second-largest acquisition after LinkedIn, is expected to open new doors for Microsoft partners with customers in health care and beyond, according to solution provider executives.
Microsoft will gain a “light years” advantage over other providers of voice recognition and AI for health care by partnering with Nuance, a longtime force in health care technology, according to Nalit Patel, CEO of All Solutions Inc., a Livingston, N.J.-based solution provider that focuses on health care as one of its top customer verticals.
“This is a great acquisition for Microsoft. Nuance is the standard within health care [for voice technology]. This will give Microsoft a very strong insight into the health care space, where everyone else is still spending the time to assimilate and learn,” Patel said. “It’s a competitive advantage. Anybody else out there will have a challenge [competing with Microsoft]. I don’t think anybody else out there has that kind of advantage today.”
Microsoft CEO Satya Nadella stated that the acquisition of Nuance, located in Burlington, Massachusetts, effectively doubles Microsoft's total addressable market in the health care provider sector to $500 billion.
But there’s a strong possibility that the addressable market gain for Microsoft in health care will be “even more than that,” with Nuance as the “800-pound gorilla” in health care AI and voice recognition, said David Allen, a director in the health care practice at St. Louis-based Perficient, No. 55 on CRN’s Solution Provider 500 for 2020.
“Nuance has gone through all of the learning curves in the health care space, and Microsoft inherits that,” Allen said.
For solution providers seeking to serve existing and new health care customers, “this is a health care-centric offering that becomes part of our story,” he said. “This opens a lot of doors and opens a lot of conversations.”
Nuance offers conversational AI and cloud-based clinical intelligence for healthcare providers and is well-known for its Dragon speech recognition software. The company’s offerings are used by more than 55 percent of U.S. physicians and by 77 percent of the country’s hospitals overall, according to Microsoft.
In a health care setting, “the ability to use your voice to be your interaction between the data, the AI and the cloud is super compelling,” said Ric Opal, principal, and national GTM and strategic partnerships leader at BDO Digital.
With the planned Nuance acquisition, Microsoft is aiming “to be the stickiest vendor and strategic partner that they can be,” Opal said. “It’s yet another platform for innovation for partners that are writing vertical applications that solve business problems.”
Microsoft's Microsoft Cloud for Healthcare Division debuted in 2020, with the goal of meeting the needs of the rapidly changing healthcare industry. According to the companies, Nuance's expertise and relationships with electronic health records system providers would complement Microsoft's Cloud for Healthcare industry, and Microsoft would benefit from Nuance's expertise and relationships with EHR system providers.
According to Brian Atkins, director of advanced analytics at Blue Bell, Pa.-based Anexinet, Microsoft has invested extensively in its health care cloud offering, and it seems that this would fit seamlessly into it.
Microsoft has a huge opportunity to use Nuance's tools to help physicians and other healthcare providers function more efficiently and effectively, “leading to a better patient experience,” according to Atkins.
Nuance will be “another tool to help us bring to the table leading technology solutions—which can provide a better patient experience or improve efficiencies through automation,” according to Anexinet, which is ranked No. 212 on the Solution Provider 500.
Atkins anticipates that Microsoft's acquisition of Nuance would result in increased partner revenue for services such as device integration and consulting work, such as assisting healthcare customers in determining the best strategic applications of technology and developing a roadmap.
Microsoft's change comes at a perfect time, as the COVID-19 pandemic has made such a dramatic need for digital transformation in health care, according to Atkins. Even if things return to normal, it won't be the end of it. It makes a lot of sense from a healthcare standpoint to have a solution in this particular vertical and build out a whole portfolio of products and solutions around it.
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