Microsoft’s acquisition of Nuance: A signal of intent for the Conversational AI sector and an exciting opportunity for its partners.

This week, Microsoft announced the acquisition of Nuance for $19.7 billion, in what is its second-largest acquisition after LinkedIn. Understandably, the news has resonated in the healthcare sector, with Nuance being the largest independent speech recognition servicing company. About 10,000 healthcare facilities worldwide are using Nuance’s software to capture conversations between patients and doctors and transcribe them in real-time. Furthermore, IBM has been pioneering the use of AI in the healthcare industry with Watson, and Google has expanded its footprint in this industry as well. 

During an investor call covering the acquisition, Microsoft CEO Satya Nadella said: “First and foremost, this coming together is about empowering healthcare. It is about applying the technology, talent, industry expertise and partner mindset of our two companies to this very critical sector. Together with our partners we will put advanced AI solutions into the hands of professionals to drive better decision-making and create a more meaningful human connection. AI is technology’s most important priority and healthcare is its most important application.”

The acquisition has also been a significant indicator of the growing importance of Conversational AI and digital customer service technologies for businesses. With companies accelerating their digital transformation strategies, Microsoft’s acquisition is also a big bet on speech recognition technology. Voice and speech recognition has become an important market player that could have a market worth of $27 billion by 2025, with Conversational AI being the fastest growing technology within the software industry.

In the consumer market, products such as Amazon Alexa, Google Home and Apple’s Siri have enabled people to speak to devices and have their queries relayed back via text-to-speech. The acquisition demonstrates the value of Conversational AI within the enterprise arena. 

Scott Guthrie, executive VP of Microsoft’s AI and cloud business, highlighted the importance of augmenting the Conversational AI capabilities of Microsoft’s Azure Cloud, Dynamics 365 and Teams. 

“We believe we’ll be able to deliver AI-driven digital engagement solutions for any industry scenario,” Guthrie said. “Microsoft solutions can be augmented with new AI-powered capabilities, adding more intelligence to any customer engagement.” 

For companies using either or both, Microsoft and Nuance, this acquisition will provide more depth in the enterprise cloud services. However, the impact of this acquisition goes beyond the healthcare industry. Most industry verticals are warming up to Conversational AI and Microsoft is fully aware of the opportunities that arise from combining the best offerings from partners to optimize their performance. 

The deal has opened new capabilities for both company’s partners who can leverage combined AI expertise to bring Conversational AI solutions in unison with Microsoft’s cloud portfolio in any industry scenario. 

SaaS and collaborative partnerships that deliver best-of-breed solutions are paving a new way for enterprises to deliver proficient customer services. One example being Swisscom Box’s voice-only assistant that was powered by Teneo’s language resources engine to deliver multi-language assistance.  

The emergence of LUIS^Teneo is a further example of how partnerships with Microsoft can optimize cloud-based Conversational AI services to build, test and release conversational bots faster and more efficiently. 

The acquisition of Nuance by Microsoft is ultimately an exciting opportunity for Microsoft’s partners, like Artificial Solutions, who can now help Nuance’s customers to seamlessly leverage their voice competence with MS LUIS’ intent recognition engine and with Teneo’s powerful development environment, linguistic rules and analytic capabilities to deliver an optimal customer experience. 

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