Microsoft acquires Nuance—makers of Dragon speech rec—for $16 billion

A man with his sleeves rolled up speaks into a headset while staring at a laptop.
Enlarge / On this 2011 picture, Dr. Michael A. Lee makes use of Dragon Medical voice-recognition software program to enter his notes after seeing a affected person.

Earlier at the moment, Microsoft introduced its plans to buy Nuance for $56 per share—23 p.c above Nuance’s closing worth final Friday. The deal provides as much as a $16 billion money outlay and a complete valuation for Nuance of about $19.7 billion, together with that firm’s assumed debt.

Who’s Nuance?

In this 2006 photo, Rollie Berg—who has extremely limited use of his hands due to multiple sclerosis—uses Dragon NaturallySpeaking 8 to interact directly with his PC.
Enlarge / On this 2006 picture, Rollie Berg—who has extraordinarily restricted use of his fingers attributable to a number of sclerosis—makes use of Dragon NaturallySpeaking eight to work together immediately together with his PC.

Nuance is a well known participant within the discipline of pure language recognition. The corporate’s know-how is the core of Apple’s Siri private assistant. Nuance additionally sells well-known private speech-recognition software program Dragon NaturallySpeaking, which is invaluable to many individuals with a variety of bodily disabilities.

Dragon NaturallySpeaking, initially launched in 1997, was one of many first commercially steady dictation merchandise—which means software program that didn’t require the consumer to pause briefly between phrases. In 2000, Dragon Techniques was acquired by ScanSoft, which acquired Nuance Communications in 2005 and rebranded itself as Nuance.

Earlier variations of Dragon software program used hidden Markov models to puzzle out the which means of human speech, however this methodology had critical limitations in comparison with trendy AI algorithms. In 2009, Stanford researcher Fei-Fei Li created ImageNet—a large coaching information set that spawned a increase in deep-learning algorithms used for contemporary, core AI tech.

After Microsoft researchers Dong Yu and Frank Seide efficiently applied deep-learning strategies to real-time computerized speech recognition in 2010, Dragon—now Nuance—utilized the identical strategies to its personal speech-recognition software program.

Quick ahead to at the moment, and based on each Microsoft and Nuance, medically focused variations of Dragon are in use by 77 p.c of hospitals, 75 p.c of radiologists, and 55 p.c of physicians in the USA.

Microsoft’s acquisition play

Microsoft and Nuance started a partnership in 2019 to ship ambient clinical intelligence (ACI) applied sciences to well being care suppliers. ACI know-how is meant to cut back doctor burnout and enhance effectivity by offloading administrative duties onto computer systems. (A 2017 study revealed within the Annals of Household Drugs documented physicians usually spending two hours of record-keeping for each single hour of precise affected person care.)

Buying Nuance offers Microsoft direct entry to the corporate’s complete well being care buyer checklist. It additionally offers Microsoft the chance to push Nuance know-how—presently, principally used within the US—to Microsoft’s personal giant worldwide market. Nuance chief govt Mark Benjamin—who will proceed to run Nuance as a Microsoft division after the acquisition—describes it as a possibility to “superscale how we alter an trade.”

The transfer doubles Microsoft’s whole addressable market within the well being care vertical to almost $500 billion. It additionally marries what Microsoft CEO Satya Nadella describes as “the AI layer on the healthcare level of supply” with Microsoft’s personal huge cloud infrastructure, together with Azure, Groups, and Dynamics 365.

The acquisition has been unanimously authorised by the boards of administrators of each Nuance and Microsoft and it’s anticipated to shut by the tip of 2021.