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Microsoft Jumps ‘Light Years’ In Health Care AI With Nuance Acquisition: Partners

The planned $19.7 billion acquisition of Nuance is a huge artificial intelligence and voice recognition win for Microsoft, and should create major services opportunities with health care customers in the channel, solution providers told CRN.

Solution providers applauded Microsoft’s planned $19.7 billion acquisition of Nuance Communications as a major expansion of the channel opportunity around artificial intelligence and voice recognition in the health care market.

The deal—set to become Microsoft’s second-largest acquisition ever after LinkedIn, with an expected closing by the end of 2021—is poised to open new doors for Microsoft partners with customers in health care and beyond, solution provider executives told CRN.

[Related: The Microsoft-Nuance Deal: 5 Big Things To Know]

With Nuance, a longtime force in health care technology, Microsoft will gain a “light years” advantage over other providers of voice recognition and AI for health care, said 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 said the acquisition of Burlington, Mass.-based Nuance will effectively double Microsoft’s total addressable market in the health care provider space, 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 curve 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 health-care 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.”

In 2020, Microsoft launched its Microsoft Cloud for Healthcare Division, designed to address the needs of the rapidly changing health care industry. Nuance will augment the Microsoft Cloud for Healthcare business, and Microsoft will also benefit from Nuance’s expertise and relationships with electronic health records system providers, according to the companies.

Microsoft has “invested heavily into its health care cloud offering, and it seems like this will fit perfectly into it,” said Brian Atkiss, director of advanced analytics at Blue Bell, Pa.-based Anexinet.

The potential is massive for Microsoft to use Nuance’s technologies to help doctors and other health care professionals to work more efficiently and effectively, “which will lead to a better experience for patients,” Atkiss said.

And for solution providers that target health care such as Anexinet, No. 212 on the Solution Provider 500, Nuance will be “another tool to help us bring to the table leading technology solutions—which can provide a better patient experience or increase efficiencies through automation,” he said.

Atkiss expects that Microsoft’s Nuance acquisition will ultimately enable greater partner revenue for services, such as integrating of systems, and for consulting work, such as helping health care customers to determine the best strategic uses of the technology and build out a roadmap.

The timing for Microsoft’s move is also ideal, as the COVID-19 pandemic has “driven such a drastic need to do digital transformation” in health care, Atkiss said. “That’s not going to stop even when things get more back to normal. From a health care perspective, having a solution in this specific vertical, and building out a whole suite of products and solutions around that, makes a ton of sense.”

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